of State to the Embassy in
4146. Limit distribution. Re urtel 3974.2 Department appreciates your careful and thoughtful analysis and recommended courses of action.
It will probably not be possible determine whether Scelba establishing bargaining position or preparing for rejection Trieste proposals until discussions with Italians develop further in London. While initial Italian reaction admittedly disappointing, certain amount fireworks to be expected. May actually be useful give Italians time work off steam.
With reference your numbered paragraphs. Department fully agrees with points made paras 2 and 3. In latter connection Department believes we must make it plain to Italians that they cannot put us in position of being forced to choose between them and Balkan Pact, or between NATO and EDC and Balkan Pact any more than in Trieste negotiations we will allow ourselves to be put in position of choosing between Italians and Yugoslavs. There are larger interests involving fate of us all to which we must insist [Page 449] that other interests be subordinated by the processes of negotiation and compromise. There can be no choice between Italy and Balkans (urtel 3974 first para.) because both like us are subject to common danger much greater than danger either might present to other if we lived in different kind of world, not under shadow of Soviet totalitarianism. None of us can delude ourselves by talk of “relaxation international tension” and “ten years of peace” into thinking that we can allow ourselves luxury of nursing old grievances. Our safety and only possible hope of enduring relaxation international tensions and maintenance of peace depend on our ability maintain free world unity and bury old grievances.
Re your first numbered paragraph we are of course conscious fact that facilities are as much in our interest as in interest Italians. Suspension negotiations however merely recognizes situation created by Italians and is not at our initiative.
Re temporary suspension negotiations on $20 million defense support aid for FY 54 we are concerned at implications and possible adverse consequences of linking such support with Trieste negotiations. Although proposed period of suspension is short it carries us close to end FY 54. If Italian reaction Trieste proposals negative and we nevertheless do not terminate this aid we would be in position of having had our bluff called. On other hand a decision to cut off aid to Italy is one which involves many considerations and we doubt desirability of taking action now which might prejudice our freedom of judgment in future.