BROKEN PROMISES
At the beginning of the First World War, on 26 April 1915, while Italy was still neutral, "secret diplomacy" led to the signing of an agreement (the Treaty of London) in London between the Italian government and representatives of the Triple Entente, made up of the British Empire, France and Russia.
The pact included Italy's commitment to go to war within a month against Germany, Austria-Hungary, the Ottoman Empire and Bulgaria in exchange for substantial territorial compensation, which was not fully recognised by the Treaty of Versailles at the end of the First World War.
This gave rise to the feeling of "mutilated victory", which in Italy led to discontent and unrest, which was promptly exploited by the nascent Fascist Party.
THE ECONOMY BEFORE WORLD WAE II
In t
he 1920s, Fascism attempted to make Italy economically independent of other countries.
From an agricultural standpoint, they implemented the "Battle of Wheat" plan in 1925 to achieve self-sufficiency in wheat production and reduce the trade deficit, as well as the "Bonifica Integrale" plan between 1928 and 1934 to combat malaria and convert marshes into agricultural land.
From an economic standpoint, from 1922 to 1925, the government implemented a liberal policy that reduced the state's involvement in the country's economy. This policy included measures aimed at maintaining the support of major capitalists for the fascist regime.
While this was favorable to the economic recovery in some ways, a number of alarming factors emerged. These included an increase in domestic demand that caused imports to far exceed exports, thus triggering inflation. To curb this phenomenon, Mussolini announced a deflationary maneuver in 1926, fixing the exchange rate against the British pound, the reference currency at the time, at 90 lira, down from 150 lira in 1925. As a result, exports fell sharply, while monetary stabilization benefited large companies but led to the bankruptcy or absorption of small and medium-sized enterprises by larger companies.
