765.5/9–2550

Memorandum of Conversation, by the Director of the Office of Western European Affairs (Byington)

confidential
Participants: Mr. Luciolli, Counselor, Italian Embassy
Mr. Byington, WE

Mr. Luciolli left with me the attached memorandum with regard to the Italian effort to increase the effectiveness of their defense. He also referred to the memorandum of Minister Pacciardi, which had been left with Mr. Matthews by the Italian Ambassador,1 and said that this memorandum had now been approved in principle by the Italian Government. Mr. Luciolli stressed the last paragraph of the attached memorandum. He said there would be a great deal more that Italy could do but the government needed more information as to the nature and extent of United States assistance. He also said that Italy was most anxious to go ahead with HPPP in the common defense effort, but in order to work out the details the government should know which would be the recipient countries of the finished products and would have to consult with them and with us.

As regards the defense program as a whole, he pointed out that because of the present surplus of Italian manpower and unused production facilities in Italy, the Italian program could be of considerably more relative importance to the Italian economy than would be the case of defense production in other countries who are members of the NATO, and he hoped this would be taken into consideration in present planning, particularly with reference to any possible use of the EPU 2 as a method of financing production.

H[omer] M. B[yington,] Jr.
[Page 1498]
[Annex]

The Italian Embassy to the Department of State

Memorandum

The Italian Government has approved the appropriation of fifty billion lire for the present fiscal year for defense expenses and has earmarked an additional one hundred billion lire for the following two years.

The Ministry of Defense is in a position as of now to order the procurements for arms and matériel required which may be ready within the aforesaid period of time. By the same means the number of non-commissioned officers and of specialized personnel will be increased.

The Council of Ministers has also decided to increase as well the number of civil and military police (“carabinieri”) and to improve their technical equipment for national security.

This represents an important and effective effort made by Italy through its restricted resources and without being conditioned to United States financial aid. Should the latter be granted, however, as the Italian Government trusts, the potentiality of the Italian Armed Forces would be increased and expedited.

  1. Alberto Tarchiani.
  2. European Payments Union. For documentation concerning the establishment of this institution in 1950, see pp. 611 ff.