DEPARTMENT OF STATE Memorandum of Conversation
DATE: July 30, 1952
SUBJECT: United States-Italian Relations
PARTICIPANTS: Mr. Tarchiani, Ambassador of Italy
The Secretary Mr. Perkins, EUR Mr. Byington, WE
COPIES TO: S/S American Embassy, Rome G EUR (2) WE RA EE
The Italian Ambassador said that he was leaving early next month for Italy and had come in to say goodby and to have a general review of U.S.-Italian relations prior to his departure. He hoped to visit with Prime Minister De Gasperi during Mr. De Gasperi's holiday in the mountains and on that occasion would take up with him the matters discussed here.
Italian Elections
First and foremost were the Italian national elections which would take place next spring in April or May. At that time the whole fate of Italy would be in the balance and what would decide the outcome would be what we had done between now and then. He had discussed with Mr. Matthews the question of a close collaboration between the Embassy and the Department in order that things that could be done to help the situation should not be overlooked until the last moment when they would be ineffective. He was also going to take up the matter in Italy and urge a similar close collaboration between the Foreign Office and the American Embassy there. The Secretary said that he was in full agreement that we should bear in mind the importance of these elections and that we should work together as closely as possible for a successful outcome. Mr. Tarchiani said that the real danger was Communism and that the Nationalists would also make some inroads, but not as great as in the recent elections in the south.
The Secretary inquired with regard to the position of the Vatican. The Ambassador replied that prior to the recent elections in Rome, Gedda (head of the Catholic Action) had become so fearful of a Communist success - 2 -
in Rome that he had urged very strongly a coalition between the Christian Democrats and all the other non-Communist parties, including the Fascists. In doing this, he had the support of the rightist forces in the Vatican. De Gasperi had thwarted this move and the Christian Democrats had gone on to win in the elections against both the Fascists and the Communists. This had served to teach Gedda a good lesson and also the Rightist Party in the Vatican. He did not believe that the issue would be raised again by those elements.
Trieste
The Ambassador then referred to Trieste which he described as the most important single factor affecting the outcome of the elections. He said that it was imperative a settlement be reached with Yugoslavia prior to next April. After five years in office since the Tripartite Declaration of March 20, the Government could not afford to come before the electorate with a record of no achievement with regard to Trieste. He produced two maps showing the Italian line during the Bebler-Guidotti conversations and the Yugoslav line. He pointed out that the Italian line represented a serious attempt at an ethnic solution and that the Yugoslav line could not possibly be regarded as a serious effort to negotiate on such a basis.
The Secretary agreed with Ambassador Tarchiani's view but pointed out that the final solution could not be based on Italian insistence that the line that Mr. Tarchiani showed him. We had given considerable study to this question and had felt that there would have to be substantial concessions from the Italian position, maybe as far as to Pirano.
The Ambassador said that of course the Italian line did not represent a final view and they were anxious to negotiate towards some such solution as that envisaged by the Secretary. They felt it impossible, however, to get anywhere with the Yugoslavs when Marshal Tito kept attacking them publicly every day and the Yugoslav Government took a consistently adamant position towards any concession whatsoever on their part. Furthermore, the Yugoslavs' demands seemed to become greater rather than less, and they kept insisting that the present time was not propitious to negotiate. The Ambassador said that he really considered in dealing with Yugoslavia we must not think of them in terms of New England, but in terms of the Balkans, and that as long as Tito was able to obtain the military and economic assistance which he desired from us, there would be no possibility of persuading him to be reasonable with regard to Trieste.
The Secretary said that the Yugoslavs felt that we had been partial to the Italians and resented the recent arrangements regarding the Zone A administration. The Secretary then related the developments in London
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during his conversation with Mr. Eden concerning Trieste and said that we were now studying the matter further with the British with a view to seeing whether we could not now make a further approach to both parties that they would sit down and start negotiating again, emphasizing that the negotiations should be swift and must not bog down as they had before.
The Ambassador reiterated the importance to Italy of this question and repeated that its solution was essential to the forthcoming elections in Italy.
Greek-Yugoslav Staff Talks
The Ambassador then took up the forthcoming Greek-Yugoslav staff talks. He said that regardless of what the Yugoslavs or Greeks might tell us he was sure that they would discuss Albania. Italy was very concerned about this. Albania is only 55 miles from Italy and commands the outlet to the Adriatic Sea. Greece and Yugoslavia might very well make some plan for action in Albania regardless of the danger involved with the Soviet Union. The other countries of the west might suddenly find themselves faced with a reckless Balkan move in that country. Italy itself considered that any division of Albania between Yugoslavia and Greece would be totally unacceptable and that our policy should always be for an independent Albania.
The Secretary said that we were in full agreement with regard to this. We continued to favor strongly the preservation of Albanian independence and were fully aware of Italy's interest in the matter. We had had no information that the Greeks and Yugoslavs in fact intended to discuss this subject.
Defense Assistance
The Ambassador referred to the recent unfortunate developments in the Italian balance of payments which resulted from reduction of trade between Italy, the United Kingdom and France. The estimates which had gone into making up the Italian figures should be revised and the Italians were in fact in the process of drawing up new figures to present to us. He believed that the reduction of the original $110 million figure of economic assistance for Italy to $77.5 million would represent an unrealistic amount of aid inadequate to sustain the Italian defense effort or to meet the internal economic problems of the Italian Government during the pre- election period. The Secretary said that we were very sympathetic to the Italian position and were studying it very carefully.
The Ambassador also referred to the political necessity that Italy be included in the first list of countries to receive an allotment of defense support assistance for the Fiscal Year 1953, especially since Yugoslavia, France and the United Kingdom will probably be included.
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The Secretary replied that it is not planned to publish a list of such allotments and that pending a final decision on defense support assistance which will follow the NATO Annual Review, allotments will be limited to countries having serious immediate balance of payments difficulties, and countries toward which we have special commitments. In specific cases allotments may also be made to allow orderly and timely procurement of commodities and equipment and we understood that Italy's needs would also be studied by MSA in that connection.
Trade Restrictions
The Italian Ambassador referred to the recent difficulties of Italy in connection with the restrictions placed on cheese and garlic and expressed appreciation for the Department's support in having these restrictions removed. The Secretary affirmed that our opposition to such restrictions remains unchanged.
Immigration
Ambassador Tarchiani expressed the interest of the Italian Government in the Administration's Bill for admission in three years of 300,000 immigrants, one-third of which would be Italians. The Secretary said we shared the Italian opinion on the desirability of this Bill, but that it was a matter that was up to Congress and we should not be optimistic as to its early passage.
Lira Fund
The Ambassador suggested that one-half of the 10% Counterpart Fund which Congress specified must be used for lira expenditures of U.S. Missions in Italy might be used for financing the electoral campaigns. He pointed out that under the legislation this additional 5% would be over and beyond the amount previously drawn by the Missions and could possibly be spared for this purpose. The Secretary discouraged this suggestion saying that according to the information given him this did not appear to be possible. We were studying way in which we can be helpful during the elections and he had very much in mind Prime Minister De Gasperi's remarks to him on this subject at Lisbon.
U.S. Claims
At the conclusion of the conversation, the Secretary requested the Ambassador while in Italy to present to his Government's attention the need for further action by the Italian Government in settling the claims of U.S. citizens for war damages under Article 78 of the Peace Treaty. The Ambassador said that he thought Italian performance was improving and specifically mentioned the recent settlement of Standard Oil claims. In any event, he said that he would take this up with the appropriate officials in Rome.
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