Istituto per la Ricostruzione Industriale

In 1930, the Great Depression affected the Italian financial sector, seriously disrupting credit lines and making it difficult for companies to obtain loans. The Fascist regime led by Benito Mussolini, fearing a credit crunch with subsequent mass dismissals and a wave of social unrest, started to take over the banks' stakes in large industrial companies (such as steel, weapons and chemicals).

At the same time, Mussolini tried to inject capital into failing businesses (though these were later restructured). Although initially conceived as a temporary measure, IRI continued to operate throughout the period of the Fascist regime and well beyond. Although IRI was not intended to carry out real nationalizations, it became the de facto owner and operator of a large number of major banks and companies. By January 1934, the IRI had an incidence of nominal ownership of 21.49%, and a few months later acquired the capital of the banks themselves, prompting Mussolini to declare on 26 May 1934 to Italy's Chamber of Deputies that “Three-fourths of the Italian economy, industrial and agricultural, is in the hands of the State.”

Signor Pirelli,, an outstanding businessman and a power in the corporative system, explained: 'Beyond the frontiers there has been a misunderstanding of the meaning of one of Mussolini's phrases to the effect that three-quarters of the Italian economic system, both industrial and agricultural, is under State supervision.

Almost all the medium-sized and little firms and the great majority of slightly larger firms, with the exception of a few categories, are completely outside the sphere of the State's healing activity.' 1S Business policies came to be increasingly shaped by the Government, but security against the risks of business was provided only to the biggest capitalists. By 1936, its weight on the total capital of the Italian joint stock companies was 12.5%.

The IRI heavily succeeded in its goals as it saved failing banks and companies by restructuring and refinancing the companies and banks. By 1939, the IRI and other government agencies “controlled over four-fifths of Italy’s shipping and shipbuilding, three-quarters of its pig iron production and almost half that of steel.”

The political historian Martin Blinkhorn noted that “This level of state intervention greatly surpassed that in Nazi Germany, giving Italy a public sector second only to that of Stalin’s Russia.” In reality, the IRI's activity was actually limited on the one hand to providing assistance mostly financing, and the other it was reduced exclusively to accounting and administrative control, without much interference in drawing up technical and economic plans on a large scale.