Foreign Relations of the United States, 1969–1976, Volume XLI, Western Europe; NATO, 1969–1972

200. National Intelligence Estimate¹

Washington, November 12, 1970.

NIE 24–70

[Omitted here is a table of contents.]

PROSPECTS FOR ITALY

CONCLUSIONS

A. Despite some notable achievements, the center-left experiment in Italy has proved a distinct disappointment to its supporters, not only in its failure to weaken Communist strength and influence, but also in its failure to accomplish many promised reforms.

B. The summer political crisis of 1970 and its resolution have led to a diminution of political squabbling, and the new government has embarked upon a responsible but restrained reform program. Although the chances for an extended run by the present or a successor center-left government are not very bright, the chances are fairly good that some form of center-left government will survive at least until the parliamentary elections of 1973.

C. For the next two or three years at least, no political group—including the Communists—seems eager to provoke the kind of political crisis which would lead to a crisis of regime. One reason for this is fear that recurrent crises, violent civil unrest, or the possibility of imminent Communist participation in the government might lead to an extra-legal solution. The Communists will probably gain influence during the coming decade, but any attempt to form a coalition including the Communists would provoke severe strains within the Christian Democratic, Socialist, and Communist parties and perhaps cause some party splits.

D. Barring the unforeseen, moderate forces should do well enough in 1973 to retain power. But in the race between mounting problems and the capacity to solve them, which will be characteristic of the 1970s, it is impossible to know who will be the victor. In the longer term, a regime with a radical bent, either to the right or to the left, could emerge.

E. Italy’s defense posture and psychological orientation remain firmly based upon the Atlantic alliance and the European Communities. Détente in Europe has its attractions to the Italians, but at the same time Soviet presence in the Mediterranean and Soviet treatment of the Czech affair have not been reassuring. In the longer term, Italy’s continued strong adherence to the Atlantic alliance will depend not only upon the extent of Communist influence but also—and perhaps more importantly—upon developments outside Italy, including the evolving character of the alliance itself.

DISCUSSION

I. INTRODUCTION

1. Postwar Italy has in many ways been a resounding success. Parliamentary democracy has survived for 25 years, a rather considerable achievement in a country so long beset by such deep divisions and difficult problems. The economy, once one of the more backward in Western Europe, has performed extremely well, even brilliantly. And, on the international scene, Italy has won a greater measure of respect and security than ever before in its century of history as a modern state.

2. For all that, Italy today is in a troubled, apprehensive mood. Both the economy and the political system have been found wanting by substantial numbers of its people. Popular discontent with backward institutions, inadequate social services, and inequitable economic arrangements is growing. So too is the willingness of the disaffected to express their discontent in new and more disruptive ways. But, while pressures for change are mounting and responsible leaders recognize that there is a clear need for reform, the road to reform is often blocked by strongly intrenched interests, a self-absorbed and self-serving “political class,” and a swollen and inert government bureaucracy. The principal question for the 1970s thus may be whether or not the frequent crises in the Italian government will intensify, create opportunities for the extremists of both left and right, and weaken society as a whole.

II. THE SETTING

A. Some Basic Problems

3. A center-left coalition made up of Christian Democrats, two varieties of Socialists, and Republicans came into being some eight years ago after a long period of gestation. Proponents of this “opening to the left” believed that it would broaden support within the government for more progressive social and economic policies and enhance the government’s stability by augmenting its majority in Parliament. It was hoped at the same time that the coalition would, by pre-empting some of their social objectives, diminish the appeal of the Communists and, by forcing them into isolated opposition, reduce the power and influence of the Communist Party itself.

4. On most of these counts, the center-left experiment has proved to be a distinct disappointment. Some social issues—e.g., social security reform—have been dealt with competently; many economic questions—e.g., agricultural reform, long-term planning—have been addressed effectively. But little or no progress has been made in solving problems in other major areas of national life and, indeed, some are far more troublesome today than they were in the early 1960s. The state administrative structure is antiquated; the tax system is inefficient and grossly unfair; housing, urban transportation, health services, and the higher educational establishment are clearly inadequate. They have, of course, always been deficient. What is new is that public frustration, resentment, and alienation are widespread and may be growing.

5. In recent years popular unrest has spilled over into violence. Extremist groups of both the left and right, including students, have led or exploited demonstrations resulting in violence in several cities. More important, organized labor has developed a shorter temper and become more militant: wildcat strikes are more common; organized protests have become more frequent and more vehement; and rank-and-file members of the unions have become increasingly impatient with both the government and their own leaders. Some of this labor activism has paid off handsomely—last autumn’s strikes won major wage increases (25 to 40 percent over three years) and reductions in working hours for 5 million workers. Labor activism has subsided, at least for a time, but the appetites and sense of power of the workers have no doubt been enhanced.

6. The irony is that manifestations of popular unrest have become commonplace during a period of unparalleled prosperity. Throughout the 1950s and during most of the 1960s, Italy’s rate of real economic growth averaged more than five percent, and per capita real income rose over 50 percent in the past decade alone. Overall, the economy has been transformed; it is now in many respects advanced, efficient, and competitive, even by the elevated standards of Western Europe. But some problems of long standing persist, such as the severe economic imbalance between north and south, and others have only recently emerged, such as lagging industrial production, serious inflation, and a worsening trade deficit. In any case, the center-left’s primary successes, principally economic, have not contributed notably to its popularity with the electorate. The appeal of the Communists among the disgruntled remains as strong as ever, and the political strength of the Communist Party has not in the least diminished.

B. The Current Political Scene

7. The center-left formula has been subjected to intense pressures ever since the initial coalition government was formed in 1963. Partnership survived the successive strains of economic crisis, a Presidential election, and personal political maneuvering during 1964, 1965, 1966, and doubts concerning its viability gradually receded. But Socialist losses and Communist gains in the 1968 Parliamentary elections severely shook the confidence of the major coalition partners. The Socialist Party soon split apart, there were repeated government crises, public confidence waned, and energies needed to grapple with pressing national problems were devoted to increasingly fruitless and seemingly endless political squabbling.

8. Major local elections were held in June 1970. The electorate voted for municipal and provincial councilors, as in the past, but also cast ballots for 15 newly created regional councils, thus providing a test of political strength on an almost nation-wide basis. The results revealed only small shifts in voting patterns, with the center-left slightly increasing its share (to about 58 percent). On the far left the Communists fared about the same as in 1968 (approximately 27 percent), and the Proletarian Socialists lost substantially. On the far right, the Monarchists lost heavily; the Neo-Fascists increased their strength but not enough to compensate for Monarchist losses. As had been anticipated, the center-left parties gained control of 12 of the 15 new regions, and the far left carried one of the three “Red Belt” regions (Emilia-Romagna) and formed a governing majority with the Socialists in the other two (Tuscany and Umbria).

9. While the election results initially had been considered a mandate for moderation and a vote of confidence in the center-left idea, they proved less reassuring as time went on. Among other things, the long-simmering dispute within the center-left coalition over Socialist cooperation with the Communists came to a boil immediately after the June elections. The Socialists set about enlarging their participation in local governments by joining far left coalitions in areas where center-left majorities were not “politically” feasible—thereby somewhat increasing the number of local governments in which Communists and Proletarian Socialists participated. At the same time, the Christian Democrats and the Socialists set up numerous two-party local administrations which excluded the Social Democrats. These developments alarmed and infuriated the Social Democrats who feared an incipient reversion to Socialist-Communist “unity of action” as well as future Catholic-Socialist collaboration at the national level. The whole troublesome question was papered over after Prime Minister Rumor’s sudden resignation in July and after the formation of the new Colombo government in August. In the process, the Christian Democratic right and the Social Democrats appear to have lost ground.

C. The Major Coalition Parties

10. The Christian Democratic Party has either governed alone or dominated every government coalition in Italy since World War II, but respect for the Catholic Church and the desire simply to retain power seem to be the only identifiable motives shared by most of its members. The reformist-minded left wing (a scant one-third of the party) favors more or less open dialogue with the Communists in the interest of both facilitating enactment of the government’s program and encouraging the Communists toward a more reformist course. On the other hand, the conservative right wing (somewhat less than one-third of the party) firmly opposes such a dialogue as well as many of the reform planks in the center-left program itself. Especially since 1968, factional divisions within the Christian Democratic Party have prevented it from exercising effective leadership and, together with the strains within the coalition as a whole, have contributed to governmental drift. So too have the maneuvers of two prominent Christian Democratic leaders—Senate President Fanfani and Foreign Minister Moro—each of whom is seeking to gain control of the party as a step toward winning the Italian Presidency at the close of 1971.

11. The split of the Socialist Party in July 1969 was primarily the result of a bitter struggle for control of the briefly unified party, but the ideological schism is genuine. The Socialists believe the Communists are an increasingly national party and should be encouraged to share some type of responsibility for instituting needed social reforms. The Socialists also appear to link their appeal to labor and their own survival as a party with their ability to act as a nexus between the Communists and a leftward-drifting Christian Democratic majority. The more conservative Social Democrats generally view the Communists as Moscow-dominated, undemocratic, and unacceptable partners on any level of government.

D. The Communists

12. Still, despite the often equivocal nature of positions taken, no responsible center-left leader now appears to believe that the time is ripe for direct Communist participation in the national government. Christian Democratic left and Socialist spokesmen talk of “dialogue” and acceptance of Communist support on specific, mutually desired programs, but not of outright partnership. Nor do Communist leaders now appear eager to expose the party to the internal and external strains which would accompany the assumption of a share of government responsibility. The Communists have done quite well in opposition—rising from 22.6 percent of the national vote in 1953 to 26.9 percent in 1968—and they have no reason to fear that their fortunes will suffer seriously in the national elections scheduled for 1973.

13. Several factors have enhanced Communist voter appeal over the years. The Roman Catholic Church does not intervene on behalf of the Christian Democratics as directly and as often as it once did (though there are exceptions on some issues, such as divorce). The Church has also eased its stand against members who might wish—principally as a form of protest—to vote Communist. Among voters at large, the Party’s reputation has been improving. It has successfully projected an image of national communism (condemning, for example, the Soviet invasion of Czechoslovakia) and of pragmatic accommodation (as with both business and the Church in Communist-controlled and well-administered Bologna). Moreover, until recently, the Communists have managed to avoid the really serious factionalism which is endemic in the other major parties. The party considers pro-Chinese Communist groups to be temporary and manageable aberrations. The emergence in 1969 of the so-called Manifesto group made up of extreme left-wing elements, who were read out of the party, could cause the Communists some electoral and organizational problems in the future.

14. Internal migration patterns have helped the Communists at the polls. Having left the conservative influence of the parish priest behind, southern migrants to northern cities (more than 1.2 million made the move in the 1960–1968 period alone) have been welcomed by various Communist-sponsored organizations which are often the only organized groups which seem to care about their welfare. Finally, cooperation among the major labor confederations, advocated by the Communist-dominated General Confederation of Italian Labor, has paid off handsomely, a lesson not lost on many Italian workers.

15. Seeking to reduce their own isolation by undermining the center-left coalition, the Communists in June warmly welcomed the opportunity provided by the elections for increased cooperation with the Socialists. They now apparently hope for a period of controlled tension, short of violent disruption, under a series of center-left governments in semi-disarray. Such an atmosphere would most suit their purposes while they ascertain what advantage they might extract in return for their support in the secret parliamentary balloting for the Presidency.² They will probably try to avoid a major political crisis before the 1973 elections.

III. SHORT-TERM PROGNOSIS

16. The political future of Italy will in the main be determined—at least up to the national elections of 1973—by the five thousand or so people in Rome—elected representatives, party officials, and hangers-on—who collectively make up the so-called classe politica. The behavior of this political class has alienated many Italians from their government and has probably encouraged new doubts about parliamentary government in general. Italians have long been accustomed to having their elected representatives indulge, at times, an almost total disregard for the country’s needs in their single-minded pursuit of personal power or advantage. The corrosive effect such behavior has had on political stability was clearly evident during the repeated government crises of the past year when the maneuvers of the Socialists versus the Social Democrats, and vice versa, brought the center-left coalition perilously close to dissolution, while factional struggles within the Christian Democratic Party continued unabated when mutual restraint and accommodation were needed most.

17. Still, prospects for relative stability in the short term are reasonably good. While chances for an extended run by any particular center-left government are not very bright, factors do exist which should help to restrain the tactics of the opposition (including the Communists) and to preserve the center-left formula in one variation or another for the next two years or so. Most of the troublemakers are inclined toward a low profile, at least for a while. For example, the conservatives (the right-wing Christian Democrats and the Social Democrats), who had tried to force early national elections in order to capitalize on what they thought was a shift of sentiment to the right, now know they had misjudged the political mood of the electorate; they now see that they have little choice but to join their left-wing colleagues in maintaining four-party, center-left rule. The Communists too have an interest in avoiding trouble and do not wish to dislodge the center-left in the near term; they wish, instead, to consolidate their position on the local and regional levels and to increase their influence in Rome during the bargaining over the election of a new President.

18. Labor, for its part, recognizes that its strength as a force separate and distinct from the party connections of the major labor confederations has registered on the new government. While the leaders of the major confederations expect to have a growing impact on government policy—through direct consultations with high government officials and increased unity of labor action on specific issues—they also apparently recognize the current need for some restraint in pressing their demands. Their problem is to keep ahead of worker aspirations and wildcat activists if they wish to retain control; this could lead them to press for wage concessions and social reform more rapidly than prudence would dictate.

19. Prime Minister Colombo is, in fact, banking on labor’s recognition of the need for restraint to permit him to concentrate on Italy’s current and potential economic problems. With price pressures and the need to offset rising labor costs in mind, he hopes to encourage savings and productive investment, make up for the losses in production caused by strikes, and, at the same time, show some responsiveness to the strong pressures for social reform. He has relied primarily on practical fiscal measures to accomplish these ends: i.e., raising indirect taxes and using tax incentives to encourage borrowing abroad and to expand the capital market at home.

20. The almost insoluble problem of unequal development in the south of Italy will also continue to occupy government planners. While geographic disparities in average annual income will certainly persist for the foreseeable future, continued improvement in the economy of the South under government-sponsored programs is to be expected. But something will have to give, for labor’s demands for reform cannot be fully met and industrial capacity expanded and the South’s problems ameliorated and inflationary pressures controlled. And what is most likely to give for the time being is early implementation of some of the reforms demanded by labor. Sufficient concessions will probably be made, however—e.g., in the areas of low cost housing and national health service reform—to keep labor relatively quiet for a year or so. Assuming that there are no major labor disruptions during this period, the real economic growth rate should be maintained at a more-than-respectable five to six percent.

21. The prospects then appear fairly good for a reasonable degree of stability in Italy in the near term. Current economic problems may ease or at least not become much worse, and it may be that some progress will also be made in attacking chronic social ills and deficiencies. No political group, including the Communists, seems eager to provoke the kind of political crisis which could evolve into a crisis of regime. Few Italians will love their government or their leaders, but few will also want to take chances on what would follow if the regime collapsed.

22. Since the founding of the Italian Republic, top military and security figures have for the most part avoided direct involvement in politics, and rumors of extralegal solutions to the frequently unsettled governmental situation have had little basis in fact. But recently a few high military leaders—particularly in the army—have begun to express growing concern over the threat to government institutions posed by recurrent crises, violent civil unrest, and the possibility of Communist participation in the government. A coup attempt engineered by a combination of military and other conservative political and business interests is an outside possibility, particularly in the event of widespread violence. Such an attempt would be vigorously opposed by the Socialists and Communists and by most of the Christian Democrats as well. Unless carried out with extraordinary skill and backed strongly by the military as a whole, it would probably fail. But it might, even in failure, hurt public confidence in democratic institutions, discredit or fractionize the Christian Democrats, and bring into power a left-front government including the Communists.

IV. THE LONGER-TERM OUTLOOK

23. Whatever their particular political stripe, the governments of Italy in power during the 1970s will face a variety of high priority domestic demands but will in all probability possess only limited means of satisfying them. The economy is basically strong, but resources are finite and performance will be uneven. The system as a whole—public administration, economic infrastructure, educational institutions, and social services—works but does not work well. And there is some reason to wonder if, as the problems of the society become more complex, there will ever be enough resolution, knowledge, and talent, particularly in Rome, to make it work much better.

24. The increasing demands of a technologically based economy, for example, cannot long be satisfied by Italy’s crowded, poorly equipped, and inadequately staffed universities. Even passage of a number of reforms proposed by the center-left to do away with much of the archaic, elitist-oriented weakness of the higher educational system would not insure rapid and dramatic improvement in the situation. The physical expansion of educational facilities will require decades, and encrusted academic hierarchies will continue to fight changes that would mean a diminution of their privileged status. Moreover, self-centered academicians are not the only inertial forces in Italian society. Resistance to change is a common bureaucratic failing, and it has achieved pandemic proportions among Italian civil servants. And each step in the reform process must be taken against the resistance of intrenched administrative interests as well as against the powerful conservative political and business forces involved in the legislative process.

25. As the decade progresses, labor’s patience with this inertia-laden system is likely to wear thin. There could be renewed widespread strike activity leading to additional concessions, more inflationary pressure, and a probable slowdown in economic growth. In the process, the traditional insulation of the economy from the vicissitudes of Italian politics—one of the major factors contributing to both economic and political stability in Italy over the years—may incur serious damage which, in turn, could only work to the further detriment of Italy’s economic well-being.

26. It has long been held that, despite its many problems, the center-left will continue to govern in Italy simply because there is no real alternative. It now appears, however, that significant elements among the coalition parties are conducting an intensified search for just such an alternative. A clearer indication of the direction which the search will take must await the results of the 1973 parliamentary elections. But a pronounced shift to the right in voter preference which would produce a stable centrist or center-right majority is not likely. Strong voter preference may not really be needed, on the other hand, to produce further leftward movement. President Saragat’s term of office expires in 1971, and his influence may virtually disappear by 1973, even if he attempts to resume leadership of his old party, the Social Democrats. A relatively small increase by the Socialists could then well justify a Christian Democratic-Socialist version of the center-left formula—with or without the very small Republican Party but with the Social Democrats excluded.

27. The Communists will probably gain influence during the coming decade, but any attempt to form a coalition including the Communists would provoke severe strains within the Christian Democratic, Socialist, and Communist parties and perhaps cause some party splits. A significant percentage of the Communist faithful would be seriously opposed to cooperation with bourgeois elements. A potentially more difficult problem would be the Communists’ loss of status as the “party of protest,” a development which might have major consequences at the polls. Certainly these and other considerations—such as the Soviet attitude and the fortunes of the Communist party under President Allende in Chile—will be much discussed by the party leadership before any decision to cooperate is taken. Perhaps the Communists will choose for a time to delay official cooperation but to provide some unofficial support.

28. The new regional administrations will not become fully operational for at least two years. Proponents of the regions have long held that they will sharpen administrative appreciation of local situations and accelerate response to priority local needs. Effective administration of the 12 new regions controlled by the center-left parties could do much to dispel the pall of frustration, resentment, or indifference which now characterizes the general Italian attitude toward the government in Rome. But if center-left parties view the regions more as a source of patronage than as a tool of reform, they will not only increase the alienation which the average Italian already feels for his government, but they will also increase the attraction of the Communists. In the three “Red Belt” regions, the Communists will set out to prove that they are responsible, responsive, and effective—and this time they will be proving it on the highest administrative level they have attained since their ouster from the national government in 1947.

29. It is perhaps too much to say that the center-left idea is living on borrowed time, in part because a truly vigorous center-left approach has as yet to be tried. But current and future center-left governments are not likely to be more effective than those of the past. Barring the unforeseen, moderate forces should do well enough in the national elections in 1973 to maintain power. But in the race between mounting problems and the political capacity to solve them, it is impossible to know who will be the victor. Moderate government has friends as well as enemies in Italy, but we also must recognize that the strains placed upon the regime by the 1970s may be too much for it to bear. Should this prove to be the case, a new regime with a more radical bent—either to the right or the left—could emerge.

V. IMPLICATIONS FOR INTERNATIONAL POLICY

30. Abroad, Italy’s economy is closely tied to that of Western Europe, and Italian policies during the early 1970s will continue to support expansion of the Common Market and strong trade ties with the European Free Trade Association (EFTA) countries and the US. (The EEC, EFTA, and the US accounted for 65 percent of Italy’s total trade in 1969, while the East European Bloc accounted for only about six percent during the same period.) Italy has long been an advocate of British accession to the EEC, and a desire to offset the growing West German influence within the Community has reinforced this support. The Italians will also continue their strong, though secondary, interest in expanding trade with the Soviet Bloc during the 1970s. Here their interests will compete with those of West Germany and other European countries. And, if the decade brings greater Communist influence in Italy, some slackening of Italian support for strengthening the EEC may become evident, particularly if the Soviets continue to pursue their line on détente and increased all-European economic cooperation.

31. Increased Communist influence during the 1970s would be more clearly evident in the non-economic aspect of Italy’s foreign posture. Soviet pressures for a Conference on European Security (CES) awoke sympathetic vibrations among Italians who have hoped for détente even as they have sheltered under the comforting US NATO presence over the years. Italian Communist pressures for détente would thus reinforce rather than contradict an already existing bent in this direction. Italian interest in a CES is likely to increase in any event, even before 1973. Following upon recognition of Communist China, pressures within the government may develop for diplomatic recognition of East Germany and North Vietnam, and there will be a tendency to take action independent of the US example in such matters as the decade progresses.

32. Italian interests in the Middle East are somewhat different from those of the US. For years, for example, the Italians have been on good terms with most Arab states and have displayed a low-key “understanding” of the Arab position, though they have also maintained friendly relations with Israel. The Italians wish to be recognized as a Mediterranean as well as a European power and wish to preserve their commercial foothold in the area—particularly their oil interests. But they exercise very little influence in the Arab states and will almost certainly try in general to remain relatively inconspicuous and out of direct involvement in Middle Eastern quarrels.

33. The Soviet invasion of Czechoslovakia, the Brezhnev doctrine, and the increased Soviet presence in the Mediterranean have had many Italians looking over their shoulders in recent years. Even the Communist Party has found it appropriate to hedge on the issue of a one-sided weakening of NATO, both for domestic political considerations and because Italian NATO membership may serve the party’s pretentions to independence from Moscow for some time to come. Italy’s defense posture and its psychological orientation are still firmly rooted in adherence to the North Atlantic alliance, and it is as disturbed as the other West European allies over the possibility of a US drawdown in Europe in 1971. In the longer term, Italy’s continued strong adherence to the Atlantic alliance will depend not only upon the extent of Communist influence but also—and perhaps more importantly—upon developments outside Italy, including the evolving character of the alliance itself. So long as the alliance and the European Communities have vitality, there will be serious economic and psychological obstacles to a reversal of Italy’s ties with them.

1. Source: Central Intelligence Agency, History Staff Files. Secret/Controlled Dissem. Supersedes NIE 24–69. (Ibid.)
2. It is politically (and constitutionally) possible to elect a President without Communist support. The probability of this occurring, however, is slim since it would require more agreement within and among the democratic parties than is likely in 1971. Instead, Communist support will probably be needed by current presidential aspirants as it was by President Gronchi in 1955 and President Saragat in 1964. [Footnote is in the original.]