History
The Pentaparty formula, the governative alliance between five centrist parties created in 1981, caused unexpected problems to Christian Democracy (DC). The alliance was fixed and universal, extended both to the national government and to the local administrations. Considering that the 1983 election result did not longer depend by the strength of the DC, but by the strength of the entire Pentapartito, centrist electors began to look at the Christian Democratic vote as not necessary to prevent a Communist success. More, voting for one of the four minor parties of the alliance was seen as a form of moderate protest against the government without giving advantages to the PCI.[citation needed]
In this context, the figure of the socialist leader Bettino Craxi emerged. As leader of Italian Socialist Party (PSI), since 1976 Craxi had tried to undermine the Communist Party, which until then had been continuously increasing its votes in elections, and to consolidate the PSI as a modern, strongly pro-European reformist social-democratic party, with deep roots in the democratic left-wing.[5] This strategy called for ending most of the party's historical traditions as a working-class trade union based party and attempting to gain new support among white-collar and public sector employees.[citation needed]
Even if the PSI never became a serious electoral challenger either to the PCI or the DC, its pivotal position in the political arena allowed it to claim the post of Prime Minister for Craxi after the 1983 general election.[6] The electoral support for the Christian Democrats was significantly weakened. The PSI threatened to leave the parliamentary majority unless Craxi was made Prime Minister. The Christian Democrats accepted this compromise to avoid a new election and Craxi became the first Socialist in the history of the Italian Republic to be appointed Prime Minister.[7]
Starting from 1983, Craxi led the third longest-lived government of Italy during the republican era,[8] being a close ally of two key figures of DC, Giulio Andreotti and Arnaldo Forlani, in a loose cross-party alliance often dubbed CAF.[9][10] 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. During Craxi's tenure as Prime Minister, Italy became the fifth largest industrial nation in the world.[11] However, inflation was often in the double digits. Against trade union resistance, Craxi reacted by abolishing wage-price indexation (a mechanism known as scala mobile or "escalator"), under which wages had been increased automatically in line with inflation.[12] Abolishing the escalator system did help reduce inflation, which was also falling in other major countries, but in the long term it inevitably increased industrial action as workers had to bargain for better salaries. In any event, the victory of the "No" campaign in the 1985 referendum called by the Italian Communist Party was a major victory for Craxi.[citation needed]
In domestic policy, a number of reforms were initiated during Craxi's time in office. In 1984, solidarity contracts (work-sharing arrangements to avoid redundancies) were introduced, while restrictions on part-time employment were relaxed.[13] In the field of family welfare, legislation was enacted in 1984 and 1986 that changed the family allowance system "so that people most in need received larger amounts and coverage was progressively reduced to the point of termination once certain income levels were exceeded."[14]
However in April 1987, the Secretary of the Christian Democracy Ciriaco De Mita decided to drop his support for Craxi's government.[15] This caused the immediate fall of the cabinet and the formation of a new government led by the long-time Christian Democratic politician Amintore Fanfani to govern the country until a snap election was called. Even though Fanfani was a close friend and ally of Craxi, he did not participate in the swearing in ceremony, sending the Undersecretary to the Presidency of the Council Giuliano Amato.[16]
Presidential election
On 24 June 1985 the Parliament and the representatives of the 20 Italian regions met to elect the seventh President of Italy. On the same day the christian democrat Francesco Cossiga was elected on the first ballot with 751 votes out of 1011.[citation needed]
