Foreign Relations of the United States, 1955–1957, Western Europe and Canada, Volume XXVII

121. Outline Plan Prepared by the Operations Coordinating Board¹

Washington, September 26, 1956.

OUTLINE PLAN OF OPERATIONS WITH RESPECT TO ITALY

I. Introduction

A. References:

(1) U.S. Policy Toward Italy (NSC 5411/2), Approved by the President April 15, 1954.²

(2) NIE 24–56, published February 7, 1956, entitled “The Political Outlook in Italy”.³

(3) NSC 5602/1, “U.S. Basic National Security Policy”.⁴

This Plan supersedes the Outline Plan of Operations for Italy dated March 2, 1955.⁵

B. Special Operating Guidance: The following factors are of particular importance in the present juncture of Italian-American relations:

1. The long-term objective of the U.S. is an Italy free from communist domination, having a democratic government and a healthy economy, and willing and able to make important contributions to the free world.

2. Italy is emerging from a status of financial and administrative dependence on the U.S. to one of relative independence, although still needing [less than one line of source text not declassified] much cooperation. [3 lines of source text not declassified]

3. Italy has achieved a considerable degree of governmental stability considering the multi-party system and the existence of a very large Social-Communist opposition. However, governmental stability still depends on the cooperative effort of a number of coalition parties, and governmental crises continue to be a major threat.

4. The growth of Italian productivity and prosperity will probably continue, and will contribute in overcoming the basic problems of underemployment, geographical economic imbalance and underdevelopment of natural resources. There are indications of practical efforts on the part of the Italian Government to develop policies and programs which will contribute to their solution. This situation should be considered in the light of what appears to be a new Soviet international economic policy based on government-to-government cooperation which, if offered and accepted, could open the way for gradual subversive infiltration in Italy or even imposition of a Communist-oriented economic philosophy by popular acceptance.

5. The two themes of autonomy for national Communist parties and discrediting of Stalin launched at the 20th Congress of the Communist Party of the Soviet Union have had strong repercussions in Italy. As evidenced by the May 27 local election results, the tide was already running in favor of Nenni and against the Communists before U.S. publication of the text of Khrushchev’s report. The latter event posed a clear possibility of break-up of the hitherto monolithic left-wing bloc of Communists and Nenni Socialists (PSI) and gave the Center coalition Government a temporary breathing spell though it greatly increased the potential threat to the life of the coalition, which must automatically be realigned if the Social Democrats unify with the PSI. It provided an opportunity for Nenni to gain public favor as well as strength in relation to Togliatti through adopting a line somewhat more independent of both the Italian Communists and Moscow than previously. However, though hinting autonomy, Nenni’s public statements are ambiguous. The published terms of the PSI for cooperation with non-Communist parties are not significantly different from those that the Communists themselves would offer. Nevertheless, with the Italian moderate Left electorate judging him more by their hopes for his genuine political regeneration than by concrete evidences of it and guarantees, he is now in a position to disclaim Communist conrol and seek acceptance into the ranks of the respectable parliamentary parties. Nenni’s twenty year history of collaboration with Communism leaves the sincerity of his desire to break with them questionable in our minds. Even if the desire is sincere, however, there remain further grave reservations as to whether he has the political skill and [less than 1 line of source text not declassified] tenacity necessary to carry through such a break while still retaining his control over the PSI and his popular hold on the electorate. And even should he make the break, it is anticipated that his influence would be in the direction of a neutralism adverse to Italy’s present support of U.S. foreign policies such as maintenance of a strong NATO.

It is true that there is an alternative possible interpretation of Nenni’s position and future prospects, namely, that he has seriously and sincerely decided to break his party away from Communist domination, that he knows this can only be done gradually, that he is capable of carrying the break through and that a complete hands-off policy on our part would have net long-term benefits in the practical destruction of Communist power in Italy. This evaluation has been rejected as a working hypothesis because, should one of the alternative evaluations in the paragraph above prove correct, a Communist-influenced but unified Socialist Party would present too great a likelihood for the [less than 1 line of source text not declassified] disruption of the Italian Government. Our attention [less than 1 line of source text not declassified] is rather concentrated on strengthening the PSDI to enable them to resist a stampede into premature unification on Nenni’s terms.

6. It is believed that the most vital U.S. concern during the present stage of negotiation between Nenni and Saragat for Socialist reunification is to exercise the utmost discretion. Since the emergence of a large Socialist party which is neutralist and not anti-Communist would constitute a serious threat to Italy’s hitherto close collaboration with the West and particularly the United States, our tactical objectives at present are: [less than 1 line of source text not declassified] and (b) the orientation of any new Socialist grouping along the lines of the present Social Democratic Party. However, in view of Nenni’s rising popularity within the Left, the fact that his party is twice as big as the Social Democrats, and the difficulty that Saragat is having in restraining the enthusiasm of the Social Democratic rank-and-file for reunification even on conditions that may not be very exacting of Nenni, it would not seem very likely that Nenni’s position as a Socialist leader will be significantly weakened during the next few months. In view of these circumstances we should on one hand do nothing publicly or privately to indicate that we favor admittance of Nenni into the ranks of moderate and respectable parties, but on the other we should for tactical reasons avoid giving the impression that he is unacceptable under absolutely all conditions. We should be careful not to lead European Socialists to think we oppose an increase in democratic Socialist strength. [9½ lines of source text not declassified] If, as is conceivable, Nenni should, [1 line of source text not declassified] achieve a Socialist reunification on something less than the terms indicated above as acceptable to the U.S., we should re-examine paragraph 15–b of NSC 5411/2. It may be necessary, as a practical matter, to accommodate ourselves to the new situation.

C. Major Commitments:

7. PL 480 Program:

a. Title I. The first agreement signed May 23, 1955, projected sales of $50 million, of which cotton for $36.6 million constitutes the major item. A second agreement under Title I was concluded on July 6, 1956, providing for the sale of $8.2 million worth of fats, oils, and tobacco. Contingent upon the availability of proceeds from these sales there is a commitment to make available up to $35.6 million in local currencies for loans to Italy for economic development. An exchange of letters agreeing on the uses of $30 million of these contingent local currency loans has already been concluded.

b. Title II. An agreement signed June 30, 1955 provides U.S. support in surplus agricultural commodities over three years to expand an Italian program of supplemental child feeding. While $18 million were authorized for the first year and $13.5 million for the second year, the U.S. support would be marked down even further in the third year and the Italian support proportionately increased, until in the fourth year the program would be entirely Italian supported.

c. Title III. Authorizations to voluntary agencies for shipments of Surplus Agricultural Food Commodities to Italy will continue. The Italian Government has agreed to meet freight costs up to 50 percent to a maximum of $1.5 million, and ICA will match this.

8. Those implied by the general U.S. politico-military commitment to NATO.

9. The Italian Chief of Staff for Defense, during his Washington visit in April 1956, was informed that within Congressional funding limitations, the U.S. would provide Italy their spare parts requirements for FY 1957 on the understanding that Italy would assume progressively this responsibility between FY 1958 and FY 1960.

10. German Assets. U.S., U.K. and France have agreed with the Italians, and Inter Allied Reparations Agency countries have consented, that Italy will receive approximately 86 percent of the German assets in Italy.

11. Atomic Energy. Under a bilateral agreement signed in Washington July 28, 1955 (effective for five years) the U.S. agreed to exchange atomic information and to lease the Government of Italy 6 kilograms of uranium (20% enriched in isotope U–235) for use in research reactors.

12. Offshore Procurement. As of June 30, 1956, $158 million in OSP contracts with Italy for FY 1956 and previous years remained obligated but unpaid since delivery had not yet been effected.

13. The annual budget for the Fulbright Program under PL 584 is $1 million.

14. As of July 31, 1956, undisbursed commitments by the Export-Import Bank to Italy amounted to $31.9 million. This represented $19.4 million of a $20 million credit established in April 1955, and all of a $6.4 million credit established in November 1955 and of a $6.2 million credit in July 1956. The latter two credits were given for aircraft and parts and the $20 million credit was given for a number of firms in various industries.

[Here follow Part II, “Actions Agreed Upon,” citing continuing OCB Courses of Action; Part III, “Actions Not Agreed Upon” (none); and Part IV, “Additional Proposals Under Consideration in the Working Group” (none).]

1. Source: Deparment of State,OCB Files: Lot 62 D 430, Italy. Top Secret. In a memorandum attached to the source text, Charles E. Johnson stated that the OCB concurred in the Outline Plan at its meeting on September 26. An attached “Purpose and Use Statement,” not printed, indicates that the agencies involved agreed to implement the plan subject to later review and modification.
2. Foreign Relations, 1952–1954, vol. VI, Part 2, p. 1677.
3. Document 97.
4. Approved by the President on March 16, 1956; see vol. XIX, p. 242.
5. Document 67.