Disaffected with the monarchy and its identification with the fallen fascist dictatorship, Italian voters in 1946 voted for the establishment of a republic. The major political party that emerged following World War II was the Christian Democratic Party, a right-of-center group whose leader, Alcide De Gasperi (1881-1954), served as premier until 1953. The second-largest party was the Communist Party; however, by the mid-1970s it had abandoned its revolutionary program in favor of a democratic form of "Eurocommunism" (in 1991, the Communists even changed their name to the Democratic Party of the Left).
Although after the war Italy was stripped of all its overseas colonies, it quickly succeeded in rebuilding its economy, in part because of U.S. aid under the Marshall Plan (1948-52). By the 1960s, as a member of the European Community (founded in Rome in 1957), Italy had become one of the world's leading industrialized nations, prominent in the manufacture of automobiles and office equipment.
But the country continued to be plagued by economic inequities between the prosperous industrialized north and the economically depressed south. It suffered an unprecedented flight of capital (frequently aided by Swiss banks only too willing to accept discreet deposits from wealthy Italians) and an increase in bankruptcies, inflation (almost 20% during much of the 1970s), and unemployment.
During the late 1970s and early 1980s, Italy was rocked by the rise of terrorism, instigated both by neofascists and by left-wing intellectuals from the Socialist-controlled universities of the north.
