132. Memorandum of Conversation1
- Conversation with Ambassador Ortona
- Egidio Ortona, Ambassador of Italy
- John M. Leddy, Assistant Secretary of State for European Affairs
- Wells Stabler, Country Director, Italy-Austria-Switzerland
During the course of a long conversation between Ambassador Ortona and Mr. Leddy this morning, the following topics were covered.
1. Italian Foreign Policy
Ambassador Ortona reviewed at considerable length the Italian political situation and described the ingredients of the Center-Left coalition. Being a coalition, it was inevitably fuzzy around the edges at times and the recent hassle within the coalition about Italian Middle East policy was attributable to the nature of the coalition. The Ambassador pointed out, however, that the formal position of the Italian Government, including all members of the coalition, was that there should be not the slightest deviation from Italy’s friendly approach to American foreign policy positions. He wished to make this clear, particularly in light of the circumstances relating to Ambassador Fenoaltea’s resignation.
Mr. Leddy said that we had proposed to the Soviets that the NPT draft treaty should be tabled with Article 3 on safeguards left blank, and with two alternatives for the amendments Article. The Secretary had discussed the matter with Gromyko in New York.2 Gromyko had not yet agreed to table the draft with Article III blank, but he did not exclude this as a possibility. Much may depend on the outcome of the Hollybush conversations. The Secretary had told Gromyko that some countries were concerned that there should be a limitation on the life of the treaty. Gromyko’s view was noncommittal but that if there were a limitation, it would have to be of long duration. Mr. Leddy said that if the Soviets were adamant about using IAEA safeguards only, this would cause serious difficulties for the treaty.[Page 276]
Ambassador Ortona said that the whole question of safeguards and the Soviet attitude toward EURATOM came at a most unfortunate time when there was a “prise de conscience” within the European communities, particularly EURATOM. Ambassador Ortona said he wondered whether it would be desirable for the new fused Commission to re-examine the safeguards question. Mr. Rey would be taking over in July and it was the Ambassador’s personal thought that the new Commission might wish to re-examine the matter.
3. Soviet Pipeline
The Ambassador said that he was not aware of the present status of negotiations on the natural gas pipeline from the Soviet Union. He said that when he was Secretary General, the Foreign Office had instructed ENI to diversify on oil and gas and not limit its dependence on the Soviet Union. ENI had been told not to make the Soviet Union the only source of gas, and that it should go on talking with the Dutch, Libyans, and Algerians. Unfortunately, the Dutch price was very high and the cost of building the pipeline from the north would be considerable. He did not know what the Libyan situation would be now. Dealing with the Algerians was always very difficult. Ambassador Ortona recalled that while he was in the Foreign Office, he had tried to make that body the coordinator of Italian Government energy policy, but he had to confess that he had failed.
4. Situation in the UAR
Ambassador Ortona handed Mr. Leddy a memorandum covering a report from Ambassador Catalano in Cairo. Ambassador Catalano had drawn attention to the dramatic situation in Egypt following its defeat and reported on the views of certain Egyptians that it would be desirable for Washington to make some gesture toward the UAR which could serve to make the UAR realize that it was not necessary to pay no matter what price to the Soviets for their support. Ambassador Catalano had indicated that certain persons in Cairo, including those close to Nasser, were preoccupied regarding the establishment of contact with the United States. De Gaulle could not be considered as a channel because of French opposition to the United States. Therefore, other channels were required and Italy had apparently been selected.
Mr. Leddy said he did not see much hope for any gesture being made by Washington to the UAR under present circumstances. With regard to Soviet actions vis-á-visthe UAR, the present estimate of the British and ourselves was that the Soviets were resupplying a portion of UAR losses, but would not go so far as to attempt to rebuild the entire Egyptian force. It was the British estimate that it would take the Soviets a full year to resupply everything that had been lost. Mr. Leddy [Page 277] indicated that there were reports and rumors, so far unconfirmed, that the Soviets were trying to get naval bases in the UAR and/or in Syria.
Ambassador Ortona then reported that he had just received another telegram from Cairo which was dated June 23. In this, Ambassador Catalano reported that he had seen the UAR Under Secretary for Foreign Affairs, El Feki, shortly after his (Catalano’s) return from Rome. El Feki had drawn Catalano’s attention to the fact that the UAR would be satisfied if the General Assembly adopted a resolution calling for withdrawal to positions occupied prior to June 5, but without a condemnation of Israel for aggression. El Feki had added that if such a resolution were not passed, the UAR was preparing ways to bring about withdrawal by other means. Ambassador Ortona commented that Nasser’s prestige seemed to be enhanced by the Podgorny visit and by Soviet resupply actions.
5. Civil Aviation
In response to Mr. Leddy’s question, Ambassador Ortona said that the United States and Italy still seemed far apart on two or three issues. While he would make certain comments, he did not wish to negotiate, since he was not technically competent and this should be left to the negotiators. Speaking generally, he said Alitalia was psychologically motivated by two main points. The first was that the original agreement had been conceived when Italy had no civil aviation and thus Italy had been obliged to sign what may be described as an “armistice agreement.” The agreement was obsolete and it could not protect the interests of the big company which Alitalia had become. The second point was that Alitalia had an enormous fear that without the due protection which could be achieved by a new agreement, Alitalia would be submerged by the enormous capacity and strength of the U.S. companies. However, it was very difficult to translate all of this into a new agreement. Ambassador Ortona recalled that although Italy had been given Los Angeles a number of years ago, it had never been able to fly there because other questions, such as capacity and Bermuda principles, had blocked the way. The other major difficulty was to obtain a balanced route concession. Ambassador Ortona said that as Secretary General of the Foreign Office, he had seen Carandini of Alitalia, General Santini, Ambassador Capomazza, and others and pleaded with them to solve the problem before May 31. He had pointed out that failure to reach an agreement might lead to serious problems, including cessation. The Ambassador admitted that his approach had also been somewhat objective since he had desired to eliminate this problem before coming to Washington. The reply which had been given him was that Alitalia was prepared to accept anything, including cessation, rather than an agreement which was not viable. Ambassador Ortona told Mr. Leddy that against the strong opposition of Alitalia, [Page 278] the Italian Government was preparing to present something to us on capacity which he thought might be acceptable.
There ensued a rather inconclusive exchange with respect to the routes. The Ambassador indicated that Italy believed it should serve the same places in the United States that the U.S. carriers departed from. Italy had only been offered four U.S. points. He also mentioned Italian desires for Atlanta, Dallas, and beyond to Mexico, and said that the United States thought it should keep not only what it had in the previous agreement, but also obtain Australia and Africa. He noted that we had informally said we would give up Australia and Africa, but that this had never become a formal position. Mr. Stabler said we could not formalize this position if the Italians continued to reject our offer of Los Angeles and beyond to Tokyo. We therefore continued to maintain our requests. Mr. Stabler said that we believed that any agreement to be acceptable would have to be an economically balanced one. It was out of the question for us to give to the Italians routes which provided Alitalia with a far greater revenue than that earned by the American airlines serving Italy combined. We had placed certain valuations on the routes and had explained these to the Italians. While the Italians had rejected the valuations, they had never come up with any of their own nor explained the basis or the justification for their requests. We had to view the routes as economic questions and the best hope for the achievement of an agreement between the United States and Italy would be for the Italian side to prepare a basis for evaluating the revenue earning capacity of their routes. If we could agree on a formula for evaluating routes and could accept the fact that there had to be economically balanced route concessions, then it might be possible to achieve agreement.
Finally, in response to a query as to the present status of the Italian and American airlines, Mr. Stabler said that the airlines were flying normally with each side having filed applications for renewal of permits. As long as no one endeavored to restrict the other side, there should be no problem. Ambassador Ortona recognized that if the Italians tried to interfere with our services, there would be a sharp reaction on our side. He gave the impression that Italy did not intend to place any restrictions on U.S. airlines.
Ambassador Ortona said he did not know when negotiations might begin again. Mr. Stabler said he understood that there had been some talk of September, but that we were waiting to hear of Italian wishes in this regard.