811.516 Export Import Bank/6–1346

The Italian Embassy to the Department of State

No. 6767


At the end of 1945, the Italian Government established a program of essential imports necessary during 1946 to insure a means of life to the Italian people, to restore public services and agriculture, to keep a reasonable minimum of production and employment, and in order to start exportation and the rebuilding of its foreign trade.
On the basis of such a program, an application was submitted to the U.S. Authorities and the Export-Import Bank (February 14, 1946) by the Italian Embassy and Technical Delegation, requesting that a line of credit be opened to Italy in connection with her import requirements for 1946.
It was learned from various sources, although unofficially, that financial assistance might be forthcoming early in 1946 from:
an enlarged program of supplies from UNRRA for the second half of the year.
a sum of about 100–120 million dollars from Suspense Accounts (in payment of supplies and services furnished by Italy to the U. S. Army).
a substantial loan to be granted by the Export-Import Bank.
During the past five months, the matter has been discussed and the situation today appears as follows:
the funds which UNRRA will make available for assistance to Italy for the second half of 1946 will amount to 144 million dollars. The UNRRA mission in Rome had requested 278 million, but the central offices of UNRRA have not found it possible to appropriate such an amount for the Italian program. Materials and food stuffs for an amount of 134 million dollars are left out of the original program of the UNRRA mission as shown in the enclosure here attached.58
The granting of the amount in dollars of the suspense account has not yet been approved by the Appropriations Committee of Congress.
No part of the requested loan from the Export-Import Bank has yet been granted and, in any event, due to the limited funds available to the Bank, the sum will probably be confined to a very moderate figure, in relation to the essential needs.
The flow of essential materials to Italy during the first half of the year, derived mainly from orders placed at the end of 1945 and early in 1946, has been continuous but on a reduced scale. However, if new orders are not placed immediately, it is certain that an unfortunate and damaging gap will result in the furnishing of supplies to Italy. The consequences of this gap and of the interruption of the pipe line are easy to foresee: shortage of food and essential raw materials, closing down of the plants now operating, unemployment and stalemate in exports, and a general worsening of the situation. In short, the economic recovery of Italy which was so difficult to start, will irreparably be set back if this preventable gap is permitted to occur.
In order to meet its import requirements over and above the UNRRA program, the Italian Government can count in the following months only on very limited resources due to the fact that:
the troop pay account and the post liberation accounts are very much depleted and average little more than 40 million dollars.
the future accruements out of export returns and emigrant remittances will be confined to less than 80–90 millions for the second half of the year.
The Italian Government therefore finds itself bound to make an urgent appeal to the U.S. Government in the hope that the various provisions already under consideration for extending additional financial assistance to Italy be implemented as soon as possible.
Moreover a reason of great concern is also caused by the fact that, pending the final decision of the N.A.C. on the loan, the Export-Import Bank is not at present in a position to set aside any amount in relation to the Italian request, and therefore there is no certainty [Page 921] that out of the funds at the disposal of the Bank a share for the Italian loan will still be available, when decisions will be acted upon by the N.A.C.
The minimum of financial assistance required could be secured if:
the granting of the dollar credits out of the suspense account could be assured.
UNRRA could increase its contribution for the second half of the year.
a decision could be reached on the loan by the Export-Import Bank, setting aside, if necessary, the amount agreed upon until the reparations question will be solved.
  1. Not printed.