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

131. Outline Plan Prepared by the Operations Coordinating Board¹

Washington, May 15, 1957.

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 September 26, 1956.⁵

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 or serious threat of Communist subversion, having a constitutional, democratic government and a healthy self-sustaining economy, and able and willing to make important political, economic and military contributions in support of the free world coalition.

2. Because Italy is emerging from a status of financial and administrative dependence on the U.S. to one of relative independence, U.S. influence on Italy must increasingly be [1 line of source text not declassified] concentrated on essential issues.

3. Since grant economic aid to Italy is no longer necessary or expected, the U.S. should concentrate on facilitating a more normal, sound and self-sustaining economic relationship with Italy, in which the emphasis is on increasing cooperation not involving U.S. outlays, improving the Italian atmosphere for private foreign investment, and encouraging Italian use of established international lending institutions.

4. In order to ensure continued Italian support for U.S. international policies, the U.S. should consult with Italy on international matters in which the two countries have important national interests.

5. In fulfillment of its military commitments to Italy within the NATO framework, the U.S. should continue to assist Italy to strengthen its defense capability.

[Numbered paragraph 6 (6 lines of source text) not declassified]

7. From the U.S. point of view it is important that the trend toward Nenni Socialist autonomy from the Communists and the Soviet Union should progress substantially further before the Social Democrats enter a reunified party, and that the Social Democratic viewpoint and leadership should have substantially more influence in a reunified party than would appear probable should unification occur in the immediate future. Unification would probably destroy the government by the Center and if carried out prematurely would not only weaken Italian democracy and stability but would also make it difficult to achieve a new governmental formula satisfactory to U.S. objectives.

[Numbered paragraph 8 (8½ lines of source text) not declassified]

9. During the present stage of Socialist unification negotiations it is of great importance for the U.S. to exercise the utmost discretion. We should on one hand do nothing publicly or privately to indicate that we favor the admission of the Nenni Socialists as presently oriented into the ranks of the democratic parties, but on the other hand we should avoid giving the impression that the Nenni Socialists would be unacceptable under absolutely all conditions. We should be careful not to lead European Socialists to think we oppose an increase in democratic Socialist strength.

10. The United States should also continue to support the other Italian democratic parties of the Center (Christian Democrats, Liberals and Republicans) emphasizing the Christian Democratic Party, which is the bulwark of Italy’s democratic regime and its pro-Western orientation.

11. The United States should encourage elements of the moderate Right to remain moderate and responsible.

12. The U.S. should support the free unions in their effort to combat communist control over Italian labor. [3½ lines of source text not declassified]

C. Selected U.S. Arrangements with or Pertaining to Italy

1. U.S. Involvements Which May Imply Military Security Guarantees.

The North Atlantic Treaty.

2. U. S. Commitments for Funds, Goods or Services.

a. PL 480 Program:

(1) Title I. Five agreements have been signed (May 23, 1955, July 5, 1956, October 30, 1956, January 7, 1957 and March 26, 1957) providing for the sale of agricultural surplus commodities for local currency in the aggregate of $127.9 million. Of this about $88.0 million will be loaned to the Italian Government for economic development. Letters have been exchanged with the Italian Government defining the general types of development projects involved as well as the criteria to be applied in extending loans.

(2) 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. $18 million were authorized for the first year and $13.5 million for the second year. The agreement provides that U.S. support will be reduced further in the third year and the Italian support proportionately increased, until in the fourth year the program will be entirely Italian supported.

(3) 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 $1.3 million, and the U.S. will match this.

b. Commitments implied by the general U.S. politico-military undertaking with respect to NATO. The FY 1957 MA program is approximately $70 million, including advanced weapons. Planning figures for FY 1958 are approximately $50 million, exclusive of modern weapons.

c. Military spare parts. The Italian Chief of Staff for Defense, during his Washington visit in April, 1956, was informed by the Department of Defense that within Congressional funding limitations, the U.S. would provide Italy their spare parts requirements for FY 1957 (which the U.S. did to the extent of $9.2 million) on the understanding that Italy would assume progressively this responsibility between FY 1958 and FY 1960.

d. Offshore procurement. As of February 28, 1957, $75 million in OSP contracts with Italy for FY 1957 and previous years remained obligated but unpaid since delivery had not yet been effected.

e. Export-Import Bank loans. 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.

3. Other Arrangements.

a. German assets. The 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.

b. 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. Preliminary talks which will probably lead to negotiations for a power bilateral agreement were recently initiated in Washington.

c. Fulbright Program. The Fulbright Program for Italy under PL 584 for FY 1957 is $1 million.

d. Bilateral technical exchange. As of January 31, 1957 obligated but unexpended Technical Exchange in Italy totaled $689,000. The obligation of a further $151,000 for Technical Exchange in the labor field is now under discussion in Rome.

1. Source: Department of State, OCB Files: Lot 62 D 430, Italy. Top Secret. An attached “Purpose and Use Statement,” not printed, indicates that the agencies involved had agreed to implement the plan subject to later review and modification. In a memorandum attached to the source text, Charles E. Johnson stated that the OCB concurred in the Outline Plan at its meeting on May 8, with the minutes being approved on May 15. The Board agreed, however, that if the Segni government were not replaced by a government similar to it in outlook, the Outline Plan would have to be revised.

   On May 27, copies of the Outline Plan were sent to Ambassador Zellerbach by the Department of State. In the cover letter, signed by Acting Secretary of State Herter, Zellerbach was instructed that responsibility for carrying out the operations described in the plan rested with the Department and with the Embassy and that Zellerbach should personally supervise its application. Assistant Secretary Elbrick had been designated as overseer of the plan, and Zellerbach was instructed to report to him in 6 months regarding the actions taken under the plan and the measure of success achieved. (Department of State, Central Files, 611.65/5–2757)

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 121.