Bettino Craxi - Political Career

Political Career

Craxi led the 2nd longest-lived government of Italy during the republican era (after the 2nd Silvio Berlusconi cabinet), and had strong influence in Italian politics throughout the 1980s; for some time, he was a close ally of two key figures of Christian Democracy, Giulio Andreotti and Arnaldo Forlani, in a loose cross-party alliance often dubbed CAF (from the first letter of the surname Craxi-Andreotti-Forlani). Craxi had a firm grasp on a party previously troubled by factionalism, and tried to distance it from the communists and to bring it closer to Christian Democrats and other parties; his objective was to create an Italian version of European reformist socialist parties, like the German SPD or the French Socialist Party. The Italian Socialist Party reached its post-war apex when it increased its share of votes in the general election of 1987. However, the Italian Socialist Party never outgrew the much larger Italian Communist Party, whose highly charismatic leader, Enrico Berlinguer, was a fierce adversary of Craxi's policies throughout the years.

The main dynamic of Italian post-war politics was to find a way to keep the Italian Communist Party out of power. This led to the constant formation of political alliances between parties keen on keeping the Communists at bay. Things were further complicated by the fact that many parties had internal currents that would have welcomed the Communists in the government coalition; in particular, within Christian Democracy, the largest party in Italy from 1945 to end of the First Republic ("Prima Repubblica").

A native of Milan, Craxi was precocious and ascended to many levels of public office at very early ages. On 16 July 1976, Bettino Craxi was elected to the vacant Italian Socialist Party chairman position, ending years of factional fighting within the party. Ironically, the "old guard" saw him as short-lived leader, allowing each faction time to regroup. However, he was able to hold on to power and implement his policies. In particular, he sought and managed to distance his party away from the communists bringing it into an alliance with Christian Democracy and other centrist parties, but maintaining a leftist and reformist profile.

During Craxi's tenure as Prime Minister, Italy became the fifth largest industrial nation and gained entry into the G7 Group of most industrialised nations. Inflation was however often in the two-digits, and this was dealt with eliminating a wage-price increase link known as scala mobile ("escalator"); under this system, wages had been increased automatically depending on inflation. Abolishing the system did help reduce inflation, which was falling in other major countries as well, but inevitably increased strikes in the long term, as workers had to bargain for better salaries. In any case, the victory of the "No" front in the referendum called by the Italian Communist Party was also a major victory for Craxi. As a result of his spending policies, the Italian national debt skyrocketed during the Craxi era, passing 100% of the gross national product. The level of the Italian national debt is still well over 100% of the GDP.