Istituto Per La Ricostruzione Industriale - History

History

In 1930, the Great Depression started to badly affect the Italian financial sector, notably disrupting credit lines and making difficult for companies to obtain loans. The Fascist regime led by Benito Mussolini, worried about a credit crunch with subsequent mass dismissals and a wave of social unrest, started to take over banks' stakes in large industrial companies (such as steel, weapons and chemicals) and at the same time to inject capitals in failing businesses. Although initially conceived as a temporary measure, IRI continued to be operated throughout the duration of Fascist regime and well beyond. In addition, it should be noticed that, even if IRI was not meant to carry out real nationalizations, it came to de facto own and operate a growing number of companies. By 1934 IRI controlled 16.7% of Italian GDP through government-linked companies (GLCs), including Alfa Romeo, Italsider steel company integrated to IRI's Finsider's holding; 75% of pig iron production and 90% of the shipbuilding industry. By the end of 1930s, the activities IRI led to the Italian state to own a bigger share in the national economy than in any other country except the USSR.