Facing a "Crisis in the Dark"

Political crises occur so often in Italy that Italians--and indeed the rest of the world--hardly blink an eye when governments fall. After all, that political drama has taken place no fewer than 35 times in the past 31 years, and the life expectancy of an average Italian Cabinet is only ten months. Last week Italy's 36th government fell after only 89 days, but this time there was a major difference. The latest upheaval, which Italians quickly dubbed "the crisis in the dark," was not caused, as it so often has been in the past, by political infighting. This time it was the direct result of an economic disaster that has reduced Italy--the world's seventh largest industrial nation--to the status of Europe's sickest country, and threatens consequences beyond its borders.

Familiar Script. Despite "Here-we-go-again" skepticism on the part of most Italians, opinion leaders quickly recognized the magnitude of the new crisis.

Editorialized Turin's La Stampa: "It is perhaps the most dangerous and dramatic crisis since the war." Added Milan's Corriere Delia Sera: "This crisis is different. We are running the risk of a total collapse of the economic system."

The situation was so grave that the familiar script of revolving-door governments had a surprising variation this time. After the parties that made up the center-left government of Premier Mariano Rumor--Socialists, Social Democrats and Rumor's own Christian Democrats--were unable to agree on economic remedies, the Premier, following tradition, offered his resignation to President Giovanni Leone. But Leone refused to let Rumor give up so easily. The situation was too grave for change, he insisted. Leone thus ordered Rumor, "in the superior interest of the country," to try to form a new government.

In retrospect, it appeared that almost everyone had helped create the economic problems responsible for the collapse. A series of governments dominated by the Christian Democrats encouraged too speedy and too easy a recovery from three years of recession. Labor unions, bolstered by Socialist and Communist support, made excessive wage demands. When these were not fulfilled, they struck until the country was groggy. Affluence-seeking consumers did their best to make the dolce vita permanent. Inevitably, inflation began to spiral toward a current rate of 20% a year. New worker protests took place, including a massive "park-in" by Rome taxi drivers demanding higher fares. With money reserves dwindling as Italy tried to correct a severe balance of payments deficit, last year's oil crisis dealt the economy a devastating blow; the European country most dependent on Arab oil suddenly found petroleum prices quadrupled.

Italy has had to borrow so heavily to support the lira that annual interest runs to $700 million. Last March the International Monetary Fund made another loan of $1.2 billion, but only on the proviso that Italy put its economic house in order by reducing deficits, limiting spending, increasing taxes and holding down credit expansion.

Bankers' Demands. Faced last week with a crisis situation, the government prepared for the excruciating political decisions necessary to meet the bankers' demands. Not only would taxes be increased but, in a nation of wily evaders, a withholding tax would be introduced, thereby increasing the number of known taxpayers from 5 million to an estimated 14 million. Gasoline prices would be raised to $2 per gal. In defiance of Common Market practice, Italy had already imposed severe restrictions on imports.

Rumor's government faltered over a dispute about the timing of a possible relaxation on credit restrictions. The Christian Democrats wanted to hold down credit until tax revenues rose substantially. Their coalition partner, the Socialists, argued that tight credit would strangle small business and spiral unemployment up from its present 3% to possibly 8%.

Underlying the squabble over economics was the major shift in Italy's complex political power balance that resulted from the national referendum on the 3 1/2-year-old divorce law last month (TIME, May 27). Amintore Fanfani, boss of the Christian Democrats and a four-time Premier himself, had turned the referendum into a test of strength. "A vote for divorce is a vote for the Communists," went one Christian Democratic slogan. But when the ballots were counted, Europe's most Catholic country had retained its divorce law by a 3-to-2 vote; and by inference, it had approved the Socialists, and to a lesser extent the Communists, who backed the law.

The divorce referendum vote, as well as another election last weekend in Sardinia in which the left was also favored, was on everyone's mind during last week's discussions of a possible change of government. No new general elections are scheduled for three years, and the Christian Democrats are not likely to seek a special election while they are in retreat. Some Italians insisted last week that perhaps the time had come for the long-discussed "historic compromise" that would allow Communists to join any new coalition. Realistically, however, the Communists still shy away from participation in the government. They fear that this would lead to a political cleavage of the country and damaging protests from the right. The neo-Fascists have been increasingly strident lately. They are generally blamed for a bomb blast at an anti-Fascist rally at Brescia three weeks ago that killed seven people. Said Social Democrat Flavio Orlandi last week: "Our economic crisis is worse than Britain's because in Britain, an authoritarian alternative does not exist. In Italy, an economic crisis on such a scale can become a crisis of the democratic system."

Impossible Job. At week's end Rumor accepted President Leone's mandate and set about trying to salvage a workable government that could pull the country out of its economic morass. Some cynics insisted that his job had actually been made easier: Leone's call was proof that no other Italian politician cared to challenge Rumor for an impossible job. Others suggested that if worse came to worst, Rumor could fall back on the old remedy for recurring summertime crises by forming a balneare (seaside) government that could run the country until the vacation season ended. The truth was, however, that Italy's situation had become too grave for bathing-suit governments. Emergency measures that only a genuine government can apply are waiting to be taken. Italy, as Dante observed almost seven centuries ago in the Purgatorio, is once again "a vessel without a pilot in a loud storm." Unless serious steps are quickly taken, it may well sink before the winds and waves abate.

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