dec 1, 1926 - Battle for the Lira

Description:

economic policy to strengthen italy's currency

aims:
- fix Lira at 90 to the £ (Quota 90)
- reduce inflation (help the middle class)
- show Musso's amazingness to the Italians and the world

means:
- tight bank controls on money supply
- economy deflated to drive up the Lira's value
- introducing Gold Standard, exchange rate fixed

effect:
- Quota 90 achieved in 1927
- boost to Musso's prestige
- BUT exports harmed, bc Italian goods now more expensive abroad
- smaller firms overtaken by larger ones
- serious deflation
- helped import-dependent industries (e.g. chemical, steel)
- 20% cut in wages (at the same time consumer prices dropped by only 5%)

due to the negative effects Musso backed down in 1936, devalued the Lira,
Overall, economic failure, propaganda success

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