<P> After the end of World War II, Italy was in rubble and occupied by foreign armies, a condition that worsened the chronic development gap towards the more advanced European economies . However, the new geopolitical logic of the Cold War made possible that the former enemy Italy, a hinge - country between Western Europe and the Mediterranean, and now a new, fragile democracy threatened by the NATO occupation forces, the proximity of the Iron Curtain and the presence of a strong Communist party, was considered by the USA as an important ally for the Free World, and received under the Marshall Plan US $1,204 million from 1947 - 51 . </P> <P> The end of aid through the Plan could have stopped the recovery but it coincided with a crucial point in the Korean War whose demand for metal and manufactured products was a further stimulus of Italian industrial production . In addition, the creation in 1957 of the European Common Market, with Italy as a founding member, provided more investment and eased exports . </P> <P> These favorable developments, combined with the presence of a large labour force, laid the foundation for spectacular economic growth that lasted almost uninterrupted until the "Hot Autumn's" massive strikes and social unrest of 1969--70, which then combined with the later 1973 oil crisis and put an abrupt end to the prolonged boom . It has been calculated that the Italian economy experienced an average rate of growth of GDP of 5.8% per year between 1951--63, and 5% per year between 1964--73 . Italian rates of growth were second only, but very close, to the German rates, in Europe, and among the OEEC countries only Japan had been doing better . </P> <P> The 1970s were a period of economic, political turmoil and social unrest in Italy, known as Years of Lead . Unemployment rose sharply, especially among the young, and by 1977 there were one million unemployed people under age 24 . Inflation continued, aggravated by the increases in the price of oil in 1973 and 1979 . The budget deficit became permanent and intractable, averaging about 10 percent of the gross domestic product (GDP), higher than any other industrial country . The lira fell steadily, from 560 lira to the U.S. dollar in 1973 to 1,400 lira in 1982 . </P>

The part of italy that has a strong economy and major industrial centers