765.00/6–751: Telegram
The Ambassador in Italy (Dunn) to the Embassy in the United Kingdom 1
607. Although not specifically requested urtel 446 June 4,2 fol polit summary may be useful. Blessed with a firm Parliamentary majority and a courageous, farsighted leader in Pri Min De Gasperi, Italy’s Coalition Govt is one of the most stable in Eur today. While Cab reshuffles occur from time to time, there seems little possibility that, prior to the next elections in 1953, moderate govts will ever find themselves unable win approval of any vital measure. This spring’s municipal and provincial elections show that the moderate, convincedly democratic parties still control a solid 59 percent of the electorate. The Christian Democrats still provide the backbone (over two-thirds) of the democratic alignment, in spite of their losses from their overwhelming vote in 1948. Of the other democratic parties, the conservatives, represented by the Liberal Party, seem to be gaining ground and the moderate leftists (the Republicans and Democratic Socialists) to be remaining stationary or even losing ground somewhat. Extreme right-wing elements are regaining some of their lost ground, but still represent only about 8 percent of the electorate. The Commies and their allies still represent about one-third of the electorate, and this spring’s elections indicate that they have gained slightly, not lost, in popular support since 1948. This shld serve as a reminder of the resiliency of the appeal of revolutionary socialism in Italy based on popular discontent with things as they are, and on longstanding anti-governmental and anti-clerical attitude inherited from the past. This does not, however, negate the lesson of recent years which is that this same Commie-left-wing Socialist following will refuse to lend effective support for campaigns clearly in Soviet rather than in Italian interests.
Italy’s principal problem, in spite of ECA aid which has saved her from going completely on the economic rocks, remains the dilemma posed by mass unemployment on the one hand and national poverty on the other. The unemployed still total over 2 million in a working force of about 18 million, and additional hundreds of thousands are only partially employed. On the other hand, because of Italy’s basic poverty, the financial and other resources available to [Page 620] meet the country’s needs are strictly limited and the threat of inflation is ever present. Economic policy: this becomes the point of departure for discussion of almost all measures—from rearmament to land reform, social security reform and tax reform. One school holds that [at?] all costs more must be done to alleviate unemployment. The other, while agreeing in principle, objects that incautious additional measures wld start a new disastrous inflational spiral which wld cripple the entire economy. While the govt has pushed through several important reforms and taken various steps to relieve or limit unemployment, its productive and credit policies still seem to reflect in the main the attitudes of Minister of the Treasury Pella who puts principal importance on the necessity for preventing inflation.