From Father to Son: a Cultural and Political History of Italian Sovereign Debt (1979-1992)

This research project explores the cultural and political origins of the Italian public debt by focusing on the period between the end of the 1970s and the early 1990s. The Italian sovereign debt is a long-standing issue in both the European and the international contexts. Though economic history has widely investigated the “technical” causes of this problem, political historiography is still lacking a thorough analysis of its cultural and political dimension. This is precisely what this project intends to do. By examining the public debate around certain crucial measures and decisions taken in the period of 1979-1992 to deal with the problem of public expenditure and sovereign debt, I analyse the main political cultures embodied by the major Italian political parties and institutional personalities who played a crucial role in defining and/or implementing economic and financial policies. My aim is to investigate the ideas, viewpoints, and beliefs prevalent in these milieus about “stability” in public finance, the governance of the economy, and the role of the State, bearing in mind the close interdependence between national and international dynamics (and constraints). In particular, I am exploring the public debate related to measures that had a direct impact on the increase in public spending levels, measures explicitly adopted to tackle the problem of public finance and debt, as well as the European and international factors that affected the management of the Italian public debt in that period. In the course of my analysis, I draw on a large number of (party or personal) archival documents, parliamentary records, and newspapers and journals.

By examining the debate related to some crucial measures that impacted the public debt, I try to answer some questions that are key to the present study: whether the main Italian political cultures (i.e. catholic, socialist, communist, liberal) embodied by the major Italian political parties addressed the problem of increasing levels of public expenditure (and their impact on public debt); whether they were aware of the long-term effects that these policies would have on the stability of the country, given that high public debt represents a burden for present and future generations; whether there have been political forces more sensitive than others to the “culture of stability”; and, in this respect, whether recent studies are correct in suggesting that the “culture of stability”, with a few notable exceptions, was not widespread in Italy; whether political cultures modified their approach to this issue during the analyzed period. Finally, what were the attitudes and shared understandings that informed public debate, and what was the idea of the economic, social, and political present and future of Italy guiding the political forces in their choices in the economic and financial fields? Paying particular attention to political parties, I will investigate their attitude towards the warnings issued by some national organizations (such as the Bank of Italy, the Corte dei Conti, and technical committees set up by the Ministry of Treasury), as well as international institutions (especially European ones, after joining the European Monetary System-EMS) and what impact these warnings had on the empowerment (or disempowerment) of the Italian policymakers; I will also examine the interaction between politics and national and international economic institutions in the public debate and what impact the “external constraint” had on it. Asking these questions means investigating the conceptions that these actors had of the relationship between politics and economy as well as the widespread approach with respect to role of the State in the economy and the economic governance. It means investigating the degree of awareness that policymakers had about the ongoing international processes triggered by globalization – with all its economic and financial implications.