The April 1996 elections brought the most profound change in Italian politics since 1947. The largest component of the winning center-left coalition, which was known as the Olive Tree, was the Democratic Party of the Left, the former Communists who until that point had been excluded from government. The coalition also included former Christian Democrats and Dini’s newly formed Italian Renewal Party. The Olive Tree gained control of the Senate and a plurality, 284 seats, in the Chamber of Deputies. Romano Prodi, an economics professor, was sworn in as Italy’s 55th postwar prime minister, pledging to cut spending and reduce unemployment.
The corruption scandals continued, engulfing prominent politicians as well as business leaders and others. Former Prime Minister Andreotti was charged with selling favors to the Sicilian Mafia in exchange for votes and political support. In 1996 Berlusconi went on trial on charges of bribing tax police to gain favorable treatment for one of his media companies. In 1997 the yearlong trial was declared null and void when the presiding judge resigned after being accused of bias against the defendant. A new trial began for Berlusconi a month later, though he continued to lead the opposition Forza Italia party.
Berlusconi was accused of falsifying the price of a film company bought by one of his companies in 1989. He was found guilty in December 1997 and given a 16-month suspended sentence. He was also convicted of bribery and corruption by a Milan court in 1998.
The great success story of the 1990s was the austerity program adopted by Prodi’s government. It produced sufficient economies in public expenditure to qualify Italy in November 1996 to reenter the European exchange rate mechanism (ERM), which the lira had been forced to abandon in 1992. After heated debate, Prime Minister Prodi won parliamentary approval the following month for a stringent budget. The budget aimed at reducing the budget deficit to 3 percent by the end of 1997 in accordance with EU requirements for participating in a common European currency. The measures taken by Prodi’s government ultimately paid off, as Italy met the requirements to join the common currency.
In May 1998 Italy officially agreed to adopt the euro, the new currency, and it replaced the lira in January 2001. The requirements for achieving European monetary union provided Italy’s political leaders with a clear agenda of monetary and financial reforms that would otherwise have been difficult to implement. The desire to play a major role in what has become the European Union has also dominated Italy’s foreign policy from the 1960s on. In October 1998 Prodi’s government was brought down when the Democratic Party of the Left withdrew its support. Massimo D’Alema, a former Communist and head of the Democratic Party of the Left, put together a broad center-left coalition and replaced Prodi as prime minister.
D’Alema resigned in December 1999 in the face of widening cracks in his ten-party ruling coalition. But he was back in office two days later, after President Carlo Azeglio Ciampi asked him to form a new government. The new government was short-lived, and D’Alema resigned for good after his center-left coalition was defeated by the center-right opposition in regional elections in April 2000. He was replaced by former prime minister Giuliano Amato, who had served as treasury minister in D’Alema’s cabinet. "Italy" © Emmanuel BUCHOT, Encarta, Wikipedia.
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