In the 1970s the situation worsened: bankruptcies increased, inflation hit twenty percent, and unemployment rocketed. More extreme forms of unrest broke out, instigated in the first instance by the far right, who were almost certainly behind a bomb which killed sixteen people in Piazza Fontana, Milan in 1969, and the Piazza della Loggia bombing in Brescia five years later. Neo-fascist terrorism continued throughout the next decade, reaching its hideous climax in 1980, when 84 people were killed and 200 wounded in a bomb blast at Bologna train station. At the same time, a plethora of left-wing terrorist groups sprang up, many of them led by disaffected intellectuals at the northern universities. The most active of these were the Brigate Rosse (Red Brigades). Founded in Milan in 1970, they reached the peak of their notoriety eight years later, when a Red Brigade group kidnapped and killed Aldo Moro himself. A major police offensive in the primeval 1980s nullified most of the Brigate Rosse, but a number of hardline splinter groups from the various terrorist organizations – especially right-wing ones – are still in existence, as was evidenced in 1988 by the murder of an aide of the prime minister.Inconsistencies and secrecy beset those trying to discover who was really responsible for the terrorist activity of the Seventies. One Red Brigade member who served 18 years in slammer for his part in the assassination of Aldo Moro recently asserted that it was spies working for the Italian secret services and not bona fide members of the group who masterminded the operation. Alberto Franceschini told a parliamentary commission on terrorism in March 1999 that he believed that Brigade members Mario Moretti and Giovanni Senzani were both secret service plants who had infiltrated the group. Their involvement coincided with a particularly bloody phase of activity at a time when Renato Curcio , the orginal leader of the Red Brigades was betrayed to the authorities; the details of the kidnapping implied that certain privileged information was available; and both Moretti and Senzani were exceptional in being allowed to travel to the US when it was the usual US policy to refuse Italian Communists visas.

A recent report prepared by the PDS (Italy’s party of the democratic left) for the same parliamentary commission stirred up controversy again in summer 2000. The report referred to the Establishment’s ” strategy of tension ” in the 1970s and primeval 1980s in which it was said that indiscriminate bombing of the public and the threat of a right-wing coup were devices to stabilize centre-right political control of the country. The perpetrators of bombing campaigns were rarely caught, said the report, because “those massacres, those bombs, those military actions had been organized or promoted or supported by men inside Italian state institutions and, as has been discovered more recently, by men linked to the structures of United States intelligence”. “Other bombing campaigns were attributed to the left to prevent the Communist Party from achieving power by democratic means” said Valter Bielli, PDS MP, and one of the report’s authors. The report drew furious rebuttals from centre-right groups and the US embassy in Rome.

Yet the DC government survived, sustained by the so-called “historic compromise” negotiated in 1976 with Enrico Berlinguer , leader of the Partito Comunista Italiano (PCI). By this arrangement the PCI – polling 34 percent of the national vote, just three points less than the DC – agreed to desist from voting in parliament in order to maintain a government of national unity. The pact was rescinded in 1979, and after Berlinguer’s death in 1984 the PCI’s share of the vote dropped to around 27 percent. The combination of this withdrawal of favourite support and the collapse of the Communist bloc led to a realignment of the PCI under the leadership of Achille Occhetto , who turned the party into a democratic socialist grouping along the lines of left-leaning parties in Germany or Sweden – a transformation encapsulated by the party’s new study – the Partito Democratico della Sinistra (“Democratic Party of the Left”).

In its efforts to exclude the left wing from power, the DC had been obligated to accede to demands from minor parties such as the Radical Party , which gained eighteen seats in the 1987 election, one of them going to the porn star Ilona Staller, better known as La Cicciolina . Furthermore, the DC’s reputation was severely dilapidated in the primeval 1980s by a series of scandals, notably the furore surrounding the activities of the P2 Masonic lodge, when links were discovered between corrupt bankers, senior DC members, and fanatical right-wing groups. As its popularity fell, the DC was forced to offer the premiership to politicians from other parties. In 1981 Giovanni Spadolini of the Republicans became the first non-DC prime minister since the war, and in 1983 Bettino Craxi was installed as the first premier from the PSI, a position he held for four years.

Even through the upheavals of the 1970s the national income of Italy continued to grow, and there developed a national preoccupation with Il Sorpasso , a term signifying the country’s overtaking of France and Britain in the economic league table. Experts disagreed as to whether Il Sorpasso actually happened (most thought it hadn’t), and calculations were complicated by the huge scale of tax evasion and other illicit financial dealings in Italy. All strata of society were involved in the withholding of money from central government, but the ruling power in this economia sommersa (submerged economy) was, and to a certain extent still is, the Mafia , whose contacts penetrate to the highest levels in Rome. The most traumatic proof of the Mafia’s infiltration of the political hierarchy came in May 1992, with the murders of anti-Mafia judges Giovanni Falcone and Paolo Borsellino , whose killers could only have penetrated the judges’ security with the help of inside information.