865.50/5–2845
The Italian Embassy to the Department of State
Memorandum
Italy is not a Lend-Lease nation, in spite of the fact that after the Armistice she has tried with all her means to redeem herself from the errors of Fascist politics, placing all her resources at the disposal of the Allies and asking repeatedly to be allowed a greater military participation in the war.
With the end of hostilities in Europe Italy, as other European nations, must speedily proceed to the task of her rehabilitation and reconstruction. In this respect the most urgent problem which she must solve is to see to what financial and economic sources she can make recourse in the months which lie ahead.
An Italian economic mission, which from November of last year until March 1945, had been in contact with the appropriate agencies of the United States, had stressed the necessity of settling the financial and economic relationships between Italy and the United States with a reciprocal aid agreement, but such a proposal, which would have allowed Italy to become a Lend-Lease nation, was not considered acceptable.
However, whilst the military operations were proceeding on Italian soil, Italy could count on two categories of financial support: her [Page 1259] own credits in foreign currency and the program under the formula of the “prevention from disease and unrest” of the military Allied authorities in Italy.
Of these two categories, Italy’s credits scarcely amounted to more than 100 million dollars (nearly all being the counter-value for troops’ pay in Italy) whilst, for what concerns the other category it seemed that the military program should have amounted according to a preliminary calculation, to an approximate figure of $600,000,000 for the next financial year, to be given out of Lend-Lease appropriation.
At the end of last year, the Allied Commission in collaboration with a Committee set up by the Italian Government, drafted a first-aid program of rehabilitation which, roughly speaking, amounted, only for southern Italy, to an approximate figure of one billion dollars, part of which had to be borne by the military program, while the other part would have been financed with Italian credits. By the joint contribution of the aforesaid two categories of financial support (700–800 millions of dollars), the first-aid needs would have been nearly met.
On the contrary, with the end of the war in Europe, the military authorities have already given official notice to the Italian Technical Mission here that some important items originally attributed to the military program will be no longer procured by them. This seems to indicate that the part of the above program, which had to be originally borne by the military authorities, may be reduced to a much smaller scale.
Should it ever happen, furthermore, that such program be entirely withdrawn, Italy will be left only with her own credits, which will enable her to finance only one tenth of her first-aid program in the southern part of the country. On such credits she will be unable to face not only any rehabilitation program, but even the essential needs of food supplies for civilian consumption.
It is needless to point out the disruptive consequences for the Italian economy of the complete lack of financial support which would derive in the coming months from a withdrawal of the above said military program.
There are, on the other hand, no instruments or institutions at present (like, for instance, the Bank of Reconstruction and Development, still on the way of being established) to which Italy can make immediate recourse for borrowing the necessary currency to face [finance?] the import program.
It is hoped therefore that, pending such long-range arrangements on which, it is hoped, Italy might count for her final financial and economic reconstruction, the necessary means for the procurement [Page 1260] of the first-aid essential imports will not be interrupted in the present intermediate period.