Foreign Relations of the United States, 1958–1960, Western Europe, Volume VII, Part 2

238. Report by the Operations Coordinating Board⁰

July 1, 1959.

OPERATIONS COORDINATING BOARD REPORT ON ITALY (NSC 5411/2)¹

(Policy Approved by the President on April 15, 1954)

(Period Covered: From April 30, 1958 Through July 1, 1959)

1. Adequacy of Policy Towards Italy (NSC 5411/2). Italy’s progress toward the goals defined in the Objective of NSC 5411/2 dated April 15, 1954 has continued satisfactorily since the last OCB Report was transmitted to the NSC on January 15, 1959. Operating agencies find that the guidance and direction contained in NSC 5411/2 have been adequate for the period of this Report. Elements of the policy have been overtaken by events but not to an extent requiring policy revision.

2. Recommendation for Review of Policy. U.S. policy towards Italy has been found to be adequate from an operational point of view, and a review of policy by the NSC is not recommended at this time.

3. Italy’s Foreign Policy and Contribution to the Free World Coalition. The Italian Government, under Fanfani and also Segni, has continued a policy of strong cooperation within the Western Alliance, featuring close-identity with U.S. policy, a continued active participation in European integration and active support of NATO as evidenced by its acceptance of IRBMs.

4. Italy’s International Aspirations. Italy has continued to press for a role in all major international consultations and negotiations affecting Europe and the Mediterranean area. The present government has pursued this ambition with considerable activity. The major factors bearing on this ambition are Italy’s growing feeling of self-confidence and national pride and its increased economic and military strength. We are endeavoring to satisfy Italian ambition to the extent it does not conflict with any of our objectives, in the belief that it contributes to government stability and to the continuation of Italy’s cooperation and support of our policies and aims.

5. Defense Situation.

a. The effectiveness of the Italian armed forces continues to show improvement despite logistic and organizational weaknesses. On balance, Italian armed forces compare favorably with their European allies. The Italian armed forces will have in July an operational missile capability consisting of three Nike and two Honest John Battalions. Italy has also agreed to accept two IRBM squadrons.

b. The Italian Government recently approved an annual 4% increase in the national defense budget for the next five years. They have accepted the NATO MC-70 force goals. In addition, the Italian Government deems it necessary to have national forces of five infantry divisions and some air and navy forces over and above the immediate MC-70 requirements.

c. The Italian Government has submitted a request for restricted information to be used in a program for the development of certain limited military applications of nuclear energy, particularly in connection with the construction of a nuclear powered submarine. The U.S. has expressed its willingness to discuss the problems involved once the Italian Government has provided a more precise indication of its intended program. This program has not yet been presented.

6. Stability of Italian Political System. In the 1958 elections, the Communists and their allies polled about 37% of the vote. Therefore, it has been difficult to achieve our objective of a strong constitutional, democratic government in Italy. Within this context, however, the stability of the Italian political system is adequate to justify confidence for the foreseeable future in Italy’s continued adherence to a democratic form of government, supporting the free world coalition.

7. Communist Power in Italy. The Communist Party remains a major problem. Notwithstanding disturbances behind the Iron Curtain, defections from the Party ranks, generally improved economic conditions in Italy, [less than 1 line of source text not declassified] the Communist Party of Italy (PCI) has retained its main elements of strength, as demonstrated in the national election of May, 1958.

8. Economic Situation. Italian economic expansion continued satisfactorily in 1958 although at a reduced rate. Italy’s external economic position continues to improve with gold and dollar reserves increasing by almost $800 million since the end of 1957 to a total of $2.3 billion in February, 1959. Chronic unemployment and the depressed condition of the South remain Italy’s basic economic problems. Constant attention is devoted to them by the Italian Government, however, and progress is being made in the economic expansion of the South.

0. Source: Department of State, OCB Files: Lot 61 D 385, Italy 1958–60. Secret. In an undated memorandum attached to the source text, Roy Melbourne, Acting Executive Officer of the OCB, noted that the Board had revised and concurred in the report on July 1. Minutes of the July 1 meeting are Ibid.: Lot 62 D 430.

   At least one previous draft of this report was circulated. In telegram 3814, June 11, Zellerbach concurred with the semifinal draft and commented:

   “Regarding Operations Plan we are in general agreement and consider it excellent job. We suggest below a few drafting changes most of which motivated by following considerations which we think significant in present situation:

   • “1) Traditional quadripartite formula, while highly acceptable to us, is not necessarily only acceptable, [less than 1 line of source text not declassified] solution in all circumstances.

     “[3 paragraphs (13–1/2 lines of source text) not declassified]

   • “5) While we completely agree PSI at present stage not acceptable participant in governing process, we should aim at encouraging autonomous and relatively democratic elements which we believe exist that party. [2–1/2 lines of source text not declassified]
   • “6) We are concerned with lack progress in reducing Communist-dominated Left and erosion of lay democratic parties since it would be unhealthy to arrive at position where only possible democratic governmental formula is single party thus leaving no alternative for protest but Communists.” (Department of State, Central Files, 100.4–OCB/6–1159) Copies of the draft report were not found in OCB Files.

1. Foreign Relations, 1952–1954, vol. VI, Part 2, pp. 1677–1681. For the OCB report covering the period April 30 to December 10, 1958, see Document 229.