After the disappointing outcome of the elections, Del Turco resigned as secretary and the PSI Directive Committee appointed Valdo Spini as national coordinator on 21 June 1994, giving him the task to organise the Extraordinary Congress of the Party until September of the same year.

[5] However, Spini was convinced that PSI had to change its entire identity, which was associated with corruption after the role of the party in the Tangentopoli scandal,[6] and he convened a meeting on 26 July 1994 to promote the "Labourist Constituent".

On 22 September, Spini resigned as coordinator and formed the Labour Federation on 5 November 1994 in Florence[7] and much of parliamentarians, who were elected among Socialist lists, joined this new political formation and left the PSI, deepening its financial crisis.

The majoritarian side of the Congress, which was supported by former PSI Secretary Ottaviano Del Turco and Enrico Boselli, proposed the liquidation of the Party due to its disastrous financial situation and the creation create a new political formation called "Socialisti Italiani".

[8] At the end, the congress decided to liquidate the PSI, considering the debts accumulated during the rule of former Prime Minister Bettino Craxi and the decline of subscriptions and contributions which led to the foreclosing of various properties belonging to the party.