Italy faces political instability after the surprise collapse of Prime Minister Francesco Cossiga's three-party coalition government. The six-month-old Cabinet, the 39th in Italy's turbulent postwar history, was defeated in Parliament by one vote after a secret ballot on a legislative package designed to heal the country's ailing economy.
A positive reaction to the crisis came from the Communist-dominated Italian Trade Union Federation and the Fiat car company, involved in a major conflict over Fiat's plans to dismiss 14,000 workers because of a sales crisis. Hours after the government fell, Fiat said it would freeze its dismissal plan for three months to avoid escalating the conflict. The trade union federation said it would shelve a four-hour general strike scheduled for Oct. 2.