Italy after 1945: reconstruction, miracle and fear

The Republic and the election of 1948

Italy emerged from the Second World War with a destroyed infrastructure, an inflated currency and a political order that had to be rebuilt from the ground. After the referendum of 2 and 3 June 1946 had abolished the monarchy, with 54.3 per cent of the votes for the Republic, the Constitution of the Republic entered into force on 1 January 1948.¹ The first parliamentary election under the new constitution, held on 18 April 1948, was fought as a choice between two blocs. The Christian Democrats of Alcide De Gasperi won 48.5 per cent of the vote, while the Popular Democratic Front of Communists and Socialists received 31.0 per cent.² The campaign was conducted in the shadow of the Communist coup in Prague in February 1948. While the United States supported the centre parties openly and covertly, the Christian Democrats warned voters that "God sees you" in the polling booth even if Stalin did not.³ The outcome secured Italy's place in the Western alliance and in the Marshall Plan. It did not remove the fear that had shaped the campaign. For owners of capital in Milan, Turin and Genoa, the possibility that a Communist government might one day come to power, by election or otherwise, remained a permanent element of their calculations for the next three decades.

That fear had an immediate financial expression. Swiss banks had known Italian clients since the nineteenth century, and Chapter D.I describes how Italian money reached Lugano during the fascist period despite the currency laws of the regime. After 1945 the old channels reopened. Lombard families who had placed part of their assets in Switzerland before or during the war kept them there. The political uncertainty of the years 1945 to 1948 added new deposits. Contemporary observers and later historians agree that the flow of Italian money to Ticino before 1950 was significant, but its size cannot be measured, since it was by definition unrecorded.⁴ What can be measured is the result. At the end of the war the Ticinese banks were small regional institutions. By the late 1950s they were the receiving end of one of the largest private capital movements in post-war Europe.

The economic miracle

The second precondition was growth. Between 1951 and 1963 Italy's gross domestic product grew by an average of 5.8 per cent a year, and between 1964 and 1973 by 5.0 per cent a year. Among the members of the Organisation for European Economic Cooperation only West Germany and, outside Europe, Japan grew faster.⁵ The miracolo economico (economic miracle) transformed an agricultural country into an industrial one. Some nine million Italians moved from the South and from the rural regions to the cities of the "industrial triangle" of Milan, Turin and Genoa between 1955 and 1971.⁶ Private households, firms and professionals accumulated savings on a scale Italy had never known. The Financial Times is said to have awarded the lira its "Oscar" as the most stable currency of 1959, a title that Italian commentators long remembered with pride and that later events made ironic.⁷

Growth created savings, and savings looked for safety and for discretion. The industrial districts of Lombardy, from Varese and Como to Brianza and the Milanese hinterland, lay within an hour's drive of the Swiss border. The Banca d'Italia's own branch in Como observed in its economic reports that local savings did not reach the banks in the expected proportion. In 1953 the branch estimated that only about half of the savings of its district entered bank deposits, while the rest was invested otherwise or "emigrated" to Switzerland.⁸ In the early 1960s the same branch described the outflows as capitali tiepidi, "lukewarm" capital, driven above all by fear of the tax authorities.⁹ Enrico Berbenni, who has studied these reports, describes the city of Como as the hinge between the Lombard region and Ticino and the axis Milan–Como–Chiasso–Lugano as the main channel of the flight.¹⁰

Notes

1. Wikipedia, "1946 Italian institutional referendum", https://en.wikipedia.org/wiki/1946_Italian_institutional_referendum (vote of 2–3 June 1946; Republic 54.27 per cent; "On 1 January 1948, the Republican Constitution came into force"), and Wikipedia, "Constitution of Italy", https://en.wikipedia.org/wiki/Constitution_of_Italy (approved on 22 December 1947, in force on 1 January 1948). Used as a last resort; for the political history see Paul Ginsborg, A History of Contemporary Italy: Society and Politics 1943–1988 (London: Penguin 1990). ↩
2. Wikipedia, "1948 Italian general election", https://en.wikipedia.org/wiki/1948_Italian_general_election (DC 48.5 per cent, Popular Democratic Front 31.0 per cent). Used as a last resort for the electoral figures. ↩
3. Wikipedia, "1948 Italian general election" (as above), on the Prague coup of February 1948, United States funding of the centre parties and the slogan "In the secrecy of the polling booth, God sees you – Stalin doesn't". ↩
4. Berbenni (as above), 328–329, describes the flows of the late 1940s and 1950s mainly from Banca d'Italia reports and notes that the available figures are estimates. ↩
5. Wikipedia, "Italian economic miracle", https://en.wikipedia.org/wiki/Italian_economic_miracle (average GDP growth 5.8 per cent 1951–1963 and 5.0 per cent 1964–1973; second in Europe to West Germany; among OEEC countries only Japan grew faster). Used as a last resort. ↩
6. Wikipedia, "Italian economic miracle" (as above): about nine million internal migrants between 1955 and 1971. ↩
7. The "Oscar della lira" is reported to have been awarded by the Financial Times in 1960 for the year 1959. ↩
8. Berbenni (as above), 333, summarizing the reports of the Como branch of the Banca d'Italia ("Relazione sull'andamento economico"), Archivio Storico della Banca d'Italia. ↩
9. Berbenni (as above), 333–334 (outflows of 1961–1963 described as "capitali 'tiepidi'" motivated by "timori verso il fisco"). ↩
10. Berbenni (as above), 333 (Como as "cerniera tra la regione lombarda e quella ticinese") and 335 ("l'asse Milano-Como-Chiasso-Lugano"). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.