371. Executive Summary of the Study Prepared in Response to National Security Study Memorandum 2421
While not today considered the most likely outcome of Italy’s June 20–21 general elections, Communist accession to a governing role could occur
—in a left front with the Socialists;
—with the Christian Democrats and perhaps the Socialists in the “Historic Compromise”; or
—in a national unity coalition comprising all parties except the far right.
The reaction of non-Communist Italians and political parties to Communist entry into government would be profound, even though it would have resulted from elections and might be limited to token participation. Such reaction would vary with the degree of Communist dominance—greatest in the case of a PCI–PSI alliance, less in a national coalition of many parties, least of all in the case of a nonorganic association with the government on certain programs.
As for the economy, capital markets will be jittery following the elections—the more jittery the greater the gains posted by the Communists. An acceleration in capital flight is almost a certainty. The severity of the outflow will depend upon the speed with which a new government can be formed, and the shape the new government takes and the policies it adopts. The longer the period of uncertainty and the greater the control given the Communists, the larger the drain on capital will be and, hence, the likelier the shift to more radical economic policies will become. An “Historic Compromise” would be far less destabilizing than a left front.[Typeset Page 1131]
In Western Europe, notwithstanding dissatisfaction with Christian Democratic leadership and despite problems with Communist parties in France and West Germany, there is a disposition to avoid isolating Italy economically or politically. This would be strengthened by the probability that even significant PCI participation in the government would not immediately change Italy’s Western European orientation, including its participation in NATO and the EC.
The NATO Alliance can ill afford a transatlantic rift over the Italian situation. The Allies will do everything possible to avoid having to choose between Washington and Rome. The very importance attached to the American engagement in NATO, together with the economic means at the disposal of the US, will sharpen pressures on Europeans to see their policies reconciled with those of their core alliance partner.
Should the PCI take on a governmental role, European responses would be conditioned by its nature. A government also including Christian Democrats and Socialists would be regarded as less threatening than a PCI/PSI coalition. In the first case, the overall weight of the DC and its presence in key ministries would provide both initial safeguards and continuity. The leftist alternative would be certain to give rise to far greater apprehension. Europeans would be skeptical that Socialists could provide any effective counterpoise to the PCI. EC members could be expected to be more circumspect, less forthcoming, and more demanding both in bilateral relations with the Communist-dominated government and in the Community context.
In terms of US interests, there would be a negative effect on the viability and effectiveness of NATO and the EC and on our relations with it, and our overall dialogue and cooperation with Western Europe would become more difficult. To the extent the EC—and our ties to it—were weakened, we would be compelled to put more weight on our bilateral relations with Western European governments and on restricted groupings excluding Italy. The picture of a PCI working effectively in an Italian government would enhance the possibility of a PCF–PS victory in the French parliamentary elections and could increase the domestic respectability of the Spanish Communist Party.
PCI participation would impact on US security first, because of the overwhelming importance of Italian geography for the defense of NATO’s Southern Flank and, secondly, because of the broad consequences for NATO if Italy should ultimately withdraw or freeze its participation, or if the Italian situation should decay into violence.
Although we cannot exclude that the PCI would want to move in some manner against NATO and US facilities in the near term, it seems more likely that the PCI would be very cautious, recognizing that many in Italy and elsewhere will see any moves against defense arrangements as an early litmus test of PCI responsibility. Similarly, the PCI may try [Typeset Page 1132] to change Italy’s status in NATO, perhaps formally withdrawing from the integrated military structure as France and Greece have done. But, weighing likely domestic and Allied reactions, the PCI could well judge it more prudent in the near term to let Italy’s status in the Alliance (as well as its continuing participation in Allied activities) remain unchanged.
The problem the US and our Allies will face would be the fact, not the degree, of Communist entry into the Italian government. Our reaction, however, will be guided by the form in which the problem presents itself—a left front, the “Historic Compromise”, or a grand coalition—and we have therefore considered a spectrum of options:
I) support and co-optation; II) acquiescence; III) conditional neutrality; IV) opposition; and V) intervention. The first would attempt to neutralize the Communist problem and protect our Italian assets by absorbing the Communists into the Western camp. The second seeks to protect our position and Western unity by giving the Communists no cause to challenge them, while withholding our political blessing. The third option, conditional neutrality, avoids the risks of a positive or negative stance by placing the burden on the PCI to prove by its actions what its real intentions and sympathies are. The fourth and fifth choices start from the premise that it is in our interest from the outset to cause the PCI to fail and, hopefully, end the Communist experiment in Italy.
Some erosion of Western cohesion and purpose will almost certainly be the product of Communist success. Whether the erosion would be worse if we tolerated and adapted to the new situation or if we attempted to fight it, is the key question. A great deal hinges on the way in which the Communists got in and the resultant attitudes of other Italians, our allies, and the American public.
Accordingly, if we are faced with a multi-party government which includes the PCI and DC as cabinet ministers and lacks any significant opposition, we favor Option III, conditional neutrality. We recognize that Option III may allow the PCI to maneuver us into Option II by passing every test we can pose. On balance, however, it affords the greatest flexibility, both for ourselves and for the Christian Democrats. It includes a retreat to Option IV or a transition to Option II if either should become in our best interests. Option III affords the maximum chance that the PCI would be unable to cope with the dislocations caused by its arrival in power or would react ideologically to them. In either case, it could be defeated politically, bearing the onus for Italy’s crises. Option III further limits the damage to our strategic position that we might self-inflict by Options IV and V. Most of all, Option III is the most credible response to an ambiguous situation in Italy.
If we are confronted with a left front which leaves broad and determined opposition within Italy to a PCI government, State and CIA [Typeset Page 1133] favor Option IV, recognizing that Option III may be preferable to start, if we cannot line up European support. In the unlikely event that a left front is accepted in Italy as a legitimate outcome of the elections, we favor Option III as an initial response, pending recourse to Option IV, if subsequent events called for it.
DOD believes we should start with Option III whatever government is formed in Italy until and unless the PCI gives sufficient cause to move against them.
Option V should be seriously considered only in the most extreme circumstances, such as actual or anticipated civil war, and even then only if we can obtain sufficient support among our allies and at home.
[Omitted here is the remainder of the study.]
Summary: The study responded to NSSM 242, “U.S. Policy Toward Italy.”
Source: Ford Library, NSC Institutional Files (H-Files), Box 44, NSSM 242—U.S. Policy Toward Italy (2). Secret; Exdis. Sent to Scowcroft under cover of a June 11 memorandum from Hartman. For NSSM 242, see Document 367. In a June 15 memorandum to Scowcroft, Bush wrote: “The Executive Summary attached to NSSM 242 (page iv) [the third to last paragraph] lists CIA, along with State, as favoring Option IV in the event of a Left Front. This arises from a misunderstanding, and does not appear in the body of the text. Whatever the merits of this option in the contingency described, the Agency did not, and does not, take a position on the options set forth. Our role was to participate in the intelligence analysis and estimate aspects of this NSSM.” (Ibid., National Security Adviser, NSC Europe, Canada, and Ocean Affairs Staff Files, Box 13, Italy 1976 (5) WH)↩