Mussolini's Economic and Foreign Policy

Similarly to the last selection of notes on Mussolini's rise to power, understanding this set of notes will be vital if you want to answer on Mussolini in your exam. 'Il Duce's' rise use of domestic and foreign policies was a huge part of his time in power. In showing a good understanding of how he approached issues at home and abroad, you will show the examiner that you have done a tonne of added research and will impress them, making that OE mark go through the roof!

---

Economic Policy

• The success of the Italian economy was a significant factor in securing support for Mussolini. Between 1922 and 1925, Minister for Finance Alberto De Stefani revitalised the economy.
• He reformed the tax system and promoted free trade, encouraging foreign investment in Italy by offering tax exemptions to international companies. During this period, the economy grew by 20%, and unemployment fell by 76%, from 500,000 to 120,000.
• In 1925, De Stefani was dismissed as Mussolini sought greater control of the economy and pursued a policy of self-sufficiency to reduce reliance on foreign trade.
• Italy undertook large public works projects to reduce unemployment, funded by borrowing. Protectionist tariffs were imposed on imports to make foreign goods more expensive, discouraging Italians from purchasing them. To cut costs, state workers' wages were reduced.

Battles for Self-Sufficiency

Mussolini introduced a series of "Battles" to promote self-sufficiency:

• The Battle for Lira: Mussolini revalued the Italian currency to make it stronger, but this led to inflation, making exports more expensive and reducing foreign purchases.
• The Battle for Grain: Mussolini aimed to reduce dependence on imported grain by demanding farmers focus more on grain production.
• The Battle for Land: Marshland was reclaimed for farming, and large families were given incentives and tax breaks to boost the population.
• The Battle for Births: Financial incentives and tax breaks were offered to encourage marriage and increase the birth rate. Despite some successes, like the reclamation of marshlands and infrastructure projects, many initiatives failed. State-guaranteed grain prices often made bread too expensive for the poor, and industrial policies hindered growth. Many farmers abandoned less profitable crops, and the focus on self-sufficiency strained resources.

The Corporate State

• In 1926, Mussolini abolished trade unions, replacing them with Fascist syndicates. By 1930, he established the Council of Corporations to advise the government, comprising representatives from various economic sectors. Each corporation's officials were state-appointed responsible for negotiating pay and conditions.
• In practice, the Council had little influence, as all decisions aligned with Fascist policies. This centralised control meant workers lost out, with wages remaining low.

Race Laws

One key difference between Italian Fascism and German Nazism was the initial absence of racial laws in Italy. Mussolini did not target Jewish people or other minorities initially. However, in the late 1930s, he adopted racist policies inspired by Nazi Germany.

On July 14, 1938, Mussolini issued the Manifesto on Race, declaring Italians an Aryan race and restricting Jews' rights:

• Foreign-born Jews were forbidden from living in Italy.
• Jews were expelled from civil service, banking, education, military, and law jobs.
• Jews were banned from attending schools.
• Marriage between Jews and non-Jews was prohibited.
• Jewish properties were confiscated. These laws found little support among Italians and did not reach the extremes of Nazi policies, but they marked a significant shift towards racial discrimination in Italy.

Foreign Policy

Mussolini claimed he would restore Italy's territorial greatness, aiming to recreate a Mediterranean Empire using the phrase Mare Nostrum (Our Sea). He sought to extend Italian influence in North Africa and the Balkans. Early successes included securing Fiume in 1924 and making Albania an Italian protectorate in 1926.

In his early years, Mussolini signed several international treaties to maintain European peace:

• Locarno Treaty (1925): Agreed to European borders as set under the Treaty of Versailles.
• Kellogg-Briand Pact (1928): An agreement to renounce war as national policy.

The Corfu Incident

• In 1923, Mussolini exploited international disputes to further Italian interests. After a border dispute between Greece and Albania, Italian delegates were killed.
  • Mussolini demanded 50 million lire from Greece as compensation and occupied Corfu when Greece refused.
  • The League of Nations resolved the dispute, but the incident showed Mussolini's willingness to use force for diplomatic gains.

Relationship with Nazi Germany

• Initially alarmed by Hitler's rise in 1933, Mussolini feared German claims on Austrian territory. Following Austrian Chancellor Engelbert Dollfuss's assassination in 1934, Mussolini protected Austria from German aggression. In 1935, Italy, France, and Britain formed the Stresa Front to guarantee Austria's independence and resist German rearmament.

Abyssinia

• In 1935, Italian forces invaded Abyssinia (Ethiopia). Emperor Haile Selassie appealed to the League of Nations, citing Italy's aggression against the Covenant of the League.
• Despite sanctions from the League, Italy's invasion proceeded, revealing the League's weaknesses and the reluctance of France and Britain to enforce sanctions against Italy.

Key Concepts and Terms

• Alberto De Stefani: Italian Minister of Finance (1922-1925), reformed Italy's economy, promoting free trade and reducing unemployment.
• Self-sufficiency: Economic policy aimed at reducing dependence on foreign imports by boosting domestic production.
• Protectionist tariffs: Taxes on imported goods to make them more expensive and encourage the purchase of domestic products.
• Manifesto on Race: 1938 declaration by Mussolini implementing anti-Jewish laws in Italy, influenced by Nazi racial policies.
• Mare Nostrum: Latin for "Our Sea," used by Mussolini to describe his ambition for Italian dominance in the Mediterranean.
• Locarno Treaty: 1925 agreement where European countries accepted borders established by the Treaty of Versailles.
• Kellogg-Briand Pact: 1928 international treaty renouncing war as a means of resolving conflicts.
• Corfu Incident: 1923 conflict where Italy occupied the Greek island of Corfu following a border dispute, showing Mussolini's aggressive foreign policy.
• Stresa Front: 1935 alliance between Italy, France, and Britain to prevent German expansion and protect Austrian independence.
• Abyssinia (Ethiopia): An African nation invaded by Italy in 1935, leading to international condemnation and revealing the limitations of the League of Nations.