865.00R/7–1251
Memorandum of Conversation, by George A. Tesoro of the Office of Western European Affairs
Subject: ECA Allotment for July
[Page 631]| Participants: | Mr. Egidio Ortona, Counselor, Italian Embassy |
| Mr. George A. Tesoro—WE |
Mr. Ortona called at his request and said that adverse political repercussions would arise if Italy were to be excluded in the division of the interim funds made available to ECA by the Congress for the month of July (145 million dollars).
He stated that he did not want to discuss the economic aspects of the problem, but wanted to stress the political danger involved in the proposed action, as discussed at a meeting the same day in ECA.
I told Mr. Ortona that I was not aware of how ECA proposed to divide the 145 million dollar fund, but that obviously, under the one package formula which had been enforced for the last several months, the interim allotment of funds was to be made primarily in the light of each country’s contribution to mutual security. Incidentally, I reiterated to Mr. Ortona the United States Government’s dissatisfaction at the Italian submission to NATO which seems to stretch the 250 billion lire extraordinary appropriation over an 18-month instead of 12-month period. Mr. Ortona replied that obviously the Italian Government was the only judge of the political, as well as of the economic limitations obtaining in Italy, and that after the recent elections and the recently developed Parliamentary situation, the Italian Government certainly was not in a position to request of Parliament a further defense appropriation in the fall of this year. I indicated to Mr. Ortona that, whatever the merits of the case, the tentative figure of 275 million dollars indicated in the Congressional Presentation was predicated on a certain Italian defense effort and that consequently, if this defense effort and that consequently, if this defence effort decreased, ceteris paribus the United States aid should be reduced pro rata.