Abstract

This article reassesses Italy’s relationship with its closest and most powerful allies in the late 1970s, questioning the dominant narrative of an «international mantle» driving Italy’s economic reforms. Contrary to the idea that international circumstances forced Italy’s hand, it suggests that the Italian government led by Giulio Andreotti (1976-1979) used the vincolo esterno to advance domestic policy objectives. Leveraging an array of sources, including American, German, and British archives, documents from the Bank of Italy, and Andreotti’s personal papers, the analysis proposes two key reinterpretations. First, it contends that foreign pressures primarily sought political stabilization, driven by geopolitical considerations, and not the imposition of a neoliberal agenda. Second, the article argues that Italian policymakers significantly shaped the vincolo esterno and shows how Andreotti’s government aptly used international pressure and diplomacy to influence public opinion, facilitate economic reforms, solidify its leadership, and build domestic consensus for unpopular reforms. Therefore, Andreotti’s government was an active player in international negotiations, not the passive recipient of externally imposed economic policies