Battle for the Lira
Encyclopedia
The Battle for the Lira was an economic policy undertaken by the Fascists in Italy
during the 1920s
as an attempt to raise the claims of Italy becoming a great power.
took over as Prime Minister
of Italy
in 1922 the economy was in a bad state following World War I
. Between 1922 and 1925, the financial and economic situation generally improved dramatically and this helped to increase the power of Italy, who strived to be one of the world's leading countries.
Italy wanted to restore some of its purchasing power. But in order for this to happen it was vital that they had a strong currency
, the Lira
. Mussolini took the view that a weak lira would look bad for the country when presenting Italy as a super power across Europe
and the United States
.
Back in October 1922, 90 lira to £ had been the rate but it had declined sharply, even reaching 150 lira to £ in 1926.
, referring to the value they wanted to achieve.
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
during the 1920s
1920s
File:1920s decade montage.png|From left, clockwise: Third Tipperary Brigade Flying Column No. 2 under Sean Hogan during the Irish Civil War; Prohibition agents destroying barrels of alcohol in accordance to the 18th amendment, which made alcoholic beverages illegal throughout the entire decade; In...
as an attempt to raise the claims of Italy becoming a great power.
Background
When Benito MussoliniBenito Mussolini
Benito Amilcare Andrea Mussolini was an Italian politician who led the National Fascist Party and is credited with being one of the key figures in the creation of Fascism....
took over as Prime Minister
Prime minister of Italy
The Prime Minister of Italy is the head of government of the Italian Republic...
of Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
in 1922 the economy was in a bad state following World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
. Between 1922 and 1925, the financial and economic situation generally improved dramatically and this helped to increase the power of Italy, who strived to be one of the world's leading countries.
Italy wanted to restore some of its purchasing power. But in order for this to happen it was vital that they had a strong currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
, the Lira
Lira
Lira is the name of the monetary unit of a number of countries, as well as the former currency of Italy, Malta, San Marino and the Vatican City and Israel. The term originates from the value of a Troy pound of high purity silver. The libra was the basis of the monetary system of the Roman Empire...
. Mussolini took the view that a weak lira would look bad for the country when presenting Italy as a super power across Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
Aims
The policy had a number of aims. These comprised:- to fix the lira at a rate of 90 to the English pound (£)
- to reduce inflation
- to confirm the image of Fascism bringing stability
- to show the world that Italy could be a great force, with a strong currency
Back in October 1922, 90 lira to £ had been the rate but it had declined sharply, even reaching 150 lira to £ in 1926.
Actions
The policy was confirmed at the Pesaro Speech on 18 August 1926 and was given the name Quota 90Quota 90
The Quota 90 was a controversial revaluation of the lira undertaken by Mussolini, announced on August 18, 1926 at a speech in Pesaro, pegging the exchange rate to 92.46 lira against the Pound sterling by December 1927, which had been the prevailing market rate when Mussolini took power in...
, referring to the value they wanted to achieve.
Results
The revaluation hit Italy's export trade, but, by making imports cheaper, benefited heavy industires, such as steel and chemicals, which relied on imported raw materials. These industries later provided the basis for an expanded rearment industry and so supported the 'active' foreign policy, which became the chief characteristic of the fascist state. Tariffs on undesirable imports such as consumer goods and foodstuffs kept their high price and restricted demand, protecting Mussolini's Battle for grain policy.See also
- Battle for LandBattle for LandThe Battle For Land, started in 1928 in Italy by Benito Mussolini, aimed to clear marshland and make it suitable for farming, as well as reclaiming land and reducing health risks.-Aims:...
- Battle for GrainBattle for GrainThe Battle for Grain was an economic policy undertaken by the Fascists in Italy during the 1920s as a move toward autarky.-Background:When Benito Mussolini took over as Prime Minister of Italy in 1922 the economy was in a bad state following World War I...
- Battle for BirthsBattle for BirthsThe Battle for Births was one of four economic battles that took place in Fascist Italy , the others being the Battle for Grain , the Battle for the Lira , and the Battle for Land...
- Economy of Fascist Italy