World War I inflated Italy's economy with great debts, unemployment (aggravated by thousands of demobilised soldiers), social discontent featuring strikes, organised crime and anarchist, socialist and communist insurrections. When the elected Italian Liberal Party Government could not control Italy, the Fascist leader Mussolini took matters in hand, combating those issues with the Blackshirts, paramilitary squads of First World War veterans and ex socialists when Prime Ministers such as Giovanni Giolitti allowed the Fascists taking the law in hand. The violence between socialists and the mostly self-organized squadristi militias, especially in the countryside, had increased so dramatically that Mussolini was pressured to call a truce to bring about "reconciliation with the Socialists". Signed in early August 1921, Mussolini and the Italian Socialist Party (PSI) agreed to the Pact of Pacification, which was immediately condemned by most ras leaders in the "squadrismo". The peace pact was officially denounced during the Third Fascist Congress on 7–10 November 1921.