Italy in crisis!

During the First World War, fascism was developed in Europe and is motivated by imperialist conflicts among European powers, the "Great War”. The immediate cause that led to the outbreak of the First World War was the assassination of the Archduke of Austria-Hungary, Franz Ferdinand on June 28, 1914. Austria presented an ultimatum to Serbia and the July 28 war was declared. The military alliance system came into operation then.

Italy felt unrepresented by the Treaty of Versailles, in which not much was given to the Italians, this gave rise to a feeling of nationalism. It also increased in land seizures on 1919, were follow by poor harvests in 1919-1920, and law and order began to break down.

The Italian economy went down as many homeless people were affected greatly. The war attempt consumed huge amounts of industrial goods, but no peacetime economy could bout this. Because of this tragic economical crisis, Italy lacked raw materials, a large domestic market and an established trading system, all leading to post-war economic problems, such as a post war collapse.

The first problem, for which the dictatorship had to face, was the devaluation of the lira. The continuation of production at the end of First World War I had negative effects the lack of raw materials due to strong demand and excessive productivity. The first mark of crisis was the general increase in prices, rising unemployment, declining of wages, and lack of investment in Italy and in loans to state. That’s why Italy was decaying in the economical aspect little by little; it was a complete mess in organizing the economy in the country.

To resolve the problem, as in Germany, Mussolini decided to print more currency for pay the war debts owed ​​to the United States and Britain. Obviously the measure brought about the increase in inflation and the falling value of the lira, which suffered a depression against the dollar and the pound sterling. Mussolini didn’t realize the terrible consequences that would happen when he was making these bad decisions.

The measures to counter the crisis were taken as soon as possible! Put on sale a little kind of bread flour was added alcohol to gasoline, increased working hours from 8 to 9, which was a harder for workers; without increasing wages, instituted a tax on bachelors, all taxes possible were increased, was prohibited the construction of luxury homes, increased fiscal controls, reduced the cost of newspapers, blocked the rents and reduced the price rail tickets and stamps. People was going through a situation of complete chaos in its country, they did not cover all their needs because of these radical changes in Italy.

Noticing the comparisons of the lira to the pound sterling, Mussolini succeeded in adjusting the accounts of the state, but he put the country out of the export market and with such a plan doubled the cost of Italian goods abroad. Later, Italy was going to be improving little by little in their economy, going through this crisis.

Made by: Valeria Pretell.