128. Telegram From the Embassy in Italy to the Department of State/1/
Rome, April 1, 1967, 1300Z.
/1/Source: National Archives and Records Administration, RG 59, Conference Files: Lot 67 D 586, CF 142. Secret; Immediate; Exdis. Passed to the White House.
5101. Vipto 039. Dept pass info London for Vice President.
Subject: Vice President's Trip in Europe: Talk With President Saragat. Ref: Rome 5095/2/ on US-Italian Relations and NPT.
/2/Dated April 1. (Ibid., Central Files 1967-69, POL 7 US HUMPHREY)
1. Saragat opened by welcoming Vice President as representative of Italy's greatest ally. US-Italian relations are not only matter of treaty but of far deeper links of blood, tradition, history. Whatever happens, Saragat said, our friendship will remain firm. Italy works for European unity, but always in frame of partnership with US; President Kennedy's partnership idea is what guides Italian policy. But US-Italian friendship is also not exclusive. It is part of effort to reduce tension throughout world.
2. Saragat then said that against this background he would like to discuss NPT. He would speak as president of parliamentary republic. As such he is not responsible for policies of govt, but is nevertheless in complete agreement with policies of Moro govt.
3. Vice President, thanking him for expressing views of US-Italian relations that are exactly like those of US Govt, said his presence in Rome showed that Atlantic partnership is continuing commitment of President Johnson. He agreed also that Atlantic Alliance is what makes approach to East possible. Finally VP emphasized that President Johnson feels strongly that US involvement in Asia in no way lessens interest in Europe, indeed it increases it. US spent 20 years building Alliance in Europe; wants no weakening of it now. US, in its position of world responsibility of chief of state. [sic]
[4.] Saragat stated that under Article XI of Italian Constitution, Italy may accept limits on its sovereignty in the interests of peace only if it does so on an equal basis with other countries, and that any treaty which would establish such limitations without such equality would involve Saragat's personal responsibility for carrying out of Constitution.
5. Saying he didn't want to get into details of NPT, he said Italy has always wanted such a treaty knowing well the dangers of nuclear conflict and proliferation.
6. Italy could speak frankly because it had a clear conscience. Technically and financially, Italy could have a bomb in four years if it started to build one now or could have had one now if it had started earlier. Italy does not want to have a bomb. This was position not only of GOI but of large part of government opposition. Italy doesn't want to involve itself in a nuclear force and doesn't want to get into the nuclear club. Hence, Italy doesn't need reins on it to keep it in line.
7. Given this situation, Italy wanted a treaty which would not be unfair to countries which do not want their own nuclear arms. Such a treaty should contribute to real relaxation of tension and perhaps to reduction of armaments.
8. Treaty should also be in harmony with other Italian foreign policies. It should not be an obstacle to European unity or put in danger Italian security.
9. Hence Italy must ask what other countries would sign. Italy cannot forget the area in which it lives, and doesn't want to be put into a position of inequality. Italy is a leading industrial power in the Mediterranean basin and cannot accept a position of inferiority to Mediterranean countries of lesser industrial capacity.
10. Also Italy needs peaceful nuclear energy for its technological development. Lacking in natural resources and with a large and growing population, Italy needs the atom to help it deal with economic problems. The treaty must not block Italy's industrial development.
11. In text of proposed treaty Saragat saw points on which Italian position was not fully taken into account. He mentioned the question of control, which also concerns the chief of state because Italy cannot accept juridical discrimination. Nuclear have-nots must have equal rights with nuclear-have countries. Any humiliation or inferiority imposed upon Italy would provoke profound political problems. There were similar problems he thought for Germany, but he would leave that to Germany to discuss.
12. Answering President Saragat, the Vice President said that in US view there were very few topics of greater importance than proposed NPT. The US considered this to be a priority matter and a definite step to arms control and disarmament. It was essential for peace of world to keep nuclear arms from proliferation. Countries could be militant whether they were large or small, and if they had nuclear arms they could be very dangerous. There were already five fingers on the nuclear trigger, some of them nervous. US wants to limit further proliferation if possible. Question is how. US certainly does not want in any way to infringe upon Italian sovereignty.
13. Vice President then explained time table US is proposing for the treaty, pointing out that our draft has been under consideration since January and that a series of steps are now proposed for further discussion which we hope may lead to the tabling of draft treaty in May. Even when draft is tabled it will be subject to review and amendments. But US considers it important not to delay longer. Before talking with Soviets again the US will do its utmost to arrive at agreement with its allies on the draft. US has the fullest consideration for rights of other nations.
14. Then dealing with specific objections that had been raised in various ways, Vice President said there was nothing in the treaty which could stand in the way of a federated Europe or a united Europe having its own nuclear arms. He pointed out the treaty only specifies what cannot be done and does not attempt to specify what can be done.
15. VP said Italians suggest treaty should be associated with disarmament. US thinks it is, but he agreed with Fanfani who had so stated earlier that this can be stated in preamble and was prepared to consider whether it would be well to place further such reference in an appropriate article. Whether this was done in draft or in Geneva after tabling was matter of tactics. There is merit to coming to table with strong treaty.
16. Nothing in treaty would impinge upon peaceful nuclear technology. US however knows Italy's views on control and Euratom, and because of this US will offer revised Article III. This will require much discussion. GOI will soon receive details. US also knows about concern over industrial aspects, especially in Germany. US doesn't want in any way to impair others' civilian nuclear technology. This is part of modern industry, and Italy has right to it. US will do all it can to assure this, and will tell Soviets so. This is why such discussion is so helpful.
17. As for security, VP said of course US wanted no impairment of this. He would add, however, that it would take long time before smaller countries could make bombs. China had done so because it had tested in atmosphere. But UAR and Israel are signatories of Test Ban Treaty and cannot test in air. Also there is very little industrial spin off from military nuclear development. What there is is highly expensive. To have industrial benefits it was necessary to have civilian nuclear program, not military. Finally, VP said Italy's security and that of US are based in NATO. If any country threatened Italy with nuclear arms, as member of NATO Italy has commitment of US to come to its help, and US has nuclear arms enough for the job.
18. Partnership is important: US needs Italy, Italy needs the US. US will keep its commitments. That is why US is involved in SEA today--to keep its commitments.
19. Discussion was interrupted here for luncheon. Saragat asked VP to convey his warmest regards to President Johnson.
Reinhardt
129. Telegram From the Embassy in Germany to the Department of State/1/
Bonn, April 26, 1967, 1525Z.
/1/Source: Johnson Library, National Security File, Country File, Germany, Adenauer Funeral. Secret; Immediate; Nodis. President Johnson and Prime Minister Moro were in Bonn to attend the funeral of Konrad Adenauer.
12810. Pass White House.
1. The following is the draft text of a memcon on the April 26 talk between the President and Prime Minister Moro. It was dictated by interpreter de Seabra immediately before his departure. He had no time to review the draft or to bring the typescript with him.
Begin Text
Memorandum of Conversation Between President Johnson and Italian Prime Minister Moro.
Participants:
The President of the United States
Secretary of State Dean Rusk
Mr. A.J. de Seabra (interpreter)
Italian Prime Minister Moro
Italian Foreign Minister Fanfani
Ambassador Lucilli
(There was one more Italian Mr. de Seabra didn't get.)
Subject: Non-Proliferation Treaty.
Date: April 26, 1967.
Place: Presidential Residence in Bonn.
After an initial exchange of pleasant amenities during which Prime Minister Moro underlined the significance of President Johnson's presence at the Adenauer funeral, the Italian Prime Minister made a series of comments on the Non-Proliferation Treaty and its importance in terms of European and Atlantic Alliance policies.
Prime Minister Moro said that certain aspects of the Treaty were a source of concern to Italy and in the past the Italians had already made solid observations and presented certain amendments which were being considered by the United States. In view of the fact that the ever greater consolidation of the Atlantic solidarity was a most vital objective, the Prime Minister felt concerned about aspects of the Treaty, namely its structure as well as its contents. As far as Italy was concerned it had no nuclear ambitions. It was also expected that Germany would abide by its unilateral decision. But when it comes to shifting from unilateral decisions to a permanent arrangement regarding nuclear weapons, an arrangement which would overlap to a certain extent the guarantees required by the Atlantic Alliance, certain serious political problems might arise.
Italy understood the intentions of the United States and the concern of the United States in avoiding the proliferation of nuclear weapons and all the dangers contained in such proliferation. It is obvious that any observation made by Italy is based on the assumption that nuclear armaments should be subject to controls. But Italy has some misgivings about the permanent solution as proposed in the Treaty, particularly as regards the clause whereby in theory a country could withdraw. It is difficult for Italy to visualize how a country could renounce armaments without experiencing serious internal difficulties than we are prepared to cope with. Italy felt that the Treaty should be formulated in a provisional or temporary manner, leaving the possibility of renouncing nuclear weapons for a time in the future when there would be greater international solidarity. If this provisional or temporary connotation were to be introduced in the Treaty Italy then would not have any particularly strong objections.
The Prime Minister then expressed some misgivings about the eventual position in Europe of Germany and Italy, as those countries might be squeezed between two nuclear powers such as the Soviet Union and France. If that situation were to develop, there might be an evolution in European political attitudes leading to a weakening of the ties with the United States, and strong ties with the United States was one of the underlying elements of Italian foreign policy. Italy was not at this time defending the German position as the Germans could do that very well on their own. But it was important to mention one significant aspect of the political life of Europe, namely the one of whether Germany was to be brought into the Alliance as a full and equal partner. Italy was concerned that any marked changes in the assurances given to Germany with regards to potential Soviet threats might bring about a strong public opinion reaction in Germany. That in turn could have unfavorable repercussions on public opinion within the Atlantic Alliance since the effect of German participation is of vital importance.
Italy was also seriously concerned about the fact that a Non-Proliferation Treaty which had not been fully thought out might delay or even jeopardize European unity. And even though it was not anticipated that the European nations would join in a closely knit federation in the near future, it was an objective of unity that should be attained, such unity being also one of the basic elements of United States foreign policy.
The Prime Minister pointed out that the Italian observations were already well known by the United States. He wanted to add that this nuclear problem was essentially a political one. He felt that the Treaty in its present form might have very serious repercussions on European politics and furthermore it could have a negative effect on the Atlantic Alliance. That was a matter of great concern for Italy since support of the Alliance was a vital element of Italian foreign policy. And it was because Italy attached such great importance to solidarity within the Alliance that he felt it his duty to call to the attention of his US friends the possible consequences of the Treaty. He then made reference to the MLF which had never come into being, saying that abandoning the idea of multilateral force based on equal participation by European countries and agreeing to an arrangement that would discriminate permanently against certain European countries could have serious consequences as far as democracy in Europe was concerned.
President Johnson said that he had appreciated this opportunity for a frank and candid discussion. He was fully aware of Italy's concerns with regard to the NPT and wanted to say at the outset that the United States was not contemplating any agreement that would be displeasing to its allies, including the Italians. The United States indeed valued very highly the friendship of Italy which it considered as a very important ally and therefore the United States did give most serious consideration to the observations presented by Italy. He assured the Prime Minister that the United States was aware of the views presented by other nations and he felt that no real progress could be made on the Treaty without the knowledge and consent of other nations, including Italy. He had already listened to the expressions of concern indicated by India, Germany, Italy and other nations and all of those views, on the part of neutrals as well as on the part of our allies would be taken into consideration in the attempt to arrive at some language that would offer the greatest measure of hope. And of the views presented none were more welcome than those of Italy. He then pointed out that of course the United States was not ready to produce a treaty in the next 24 hours and the Prime Minister could be sure that before the United States made up its mind it would explain its position fully. At the same time he thought that there might be some unnecessary concern on the part of such countries as India, Germany and Italy and he wondered whether a greater understanding could be reached by more complete exchanges of views among technicians. As a matter of fact, the United States has already made some substantial adjustments in the proposed treaty as a result of suggestions made by several countries. It was very important for the United States to have the fullest possible understanding on the part of Italy since Italian opinion and support was of the greatest significance.
Secretary Rusk made two brief comments, first mentioning the many difficulties still existing with the Soviets. He pointed out that there was no treaty between Washington and Moscow as well as no treaty in Geneva. Therefore, European unity was not being affected, and European unity was a point on which the United States would not surrender. Then there was the matter of safeguards and in this connection if there was no full understanding among the Alliance there could be no treaty. He felt that all problems within the Alliance could be solved satisfactorily except one, that dealing with the reservations on the option to develop national nuclear power. If the above-mentioned problem could be set aside everything else could be easily solved. He then made a reference to the fact that if the security arrangements of NATO were to disappear, this might lead certain NATO countries to withdraw from the Treaty. He said in conclusion that the NPT might cause problems within the Alliance, however, the proliferation of nuclear weapons would destroy the Alliance.
Prime Minister Moro said that he was concerned about the danger that might be caused by the Treaty in its present form and the possible proliferation. Therefore, all efforts should be made so as to avoid any such danger.
President Johnson stated once more that he had been very glad to hear the views presented by the Italian Prime Minister. He wanted to say that one had not yet reached the stage where there might be cause for alarm. As a matter of fact the discussions had been on problems that may not present themselves anyway. And once more he reiterated the intention of the United States of not taking any steps that might displease our allies.
End Text.
McGhee
130. Memorandum From Acting Secretary of State Katzenbach to President Johnson/1/
Washington, April 27, 1967.
/1/Source: Johnson Library, National Security File, Country File, Italy, Vol. 5. Confidential.
SUBJECT
Civil Aviation Negotiations with Italy
Recommendations:/2/
/2/There is no indication whether President Johnson approved or disapproved these recommendations.
1. That you approve our offering Italy a route package including, if necessary, a West Coast-Tokyo route, and our insisting on an agreement consistent with US aviation principles.
2. That you approve our informing Italy that the United States is prepared to accept cessation of direct air services between the two countries rather than accede to a disadvantageous agreement.
Discussion:
The Air Transport Services Agreement with Italy/3/ will expire on June 1 as a result of Italian denunciation. Italy's principal dissatisfaction with the present Agreement has been that it gave them no routes beyond the United States, whereas American carriers since World War II have operated to Italy and beyond. This led to a revenue imbalance, undoubtedly of concern to Italy ($51.9 million for the United States and $44.6 million for Italy in 1965). United States offers in 1964 and 1965 consultations to improve Italy's routes failed because Italy wanted at the same time to introduce controls on the freedom and volume of US air services to Italy which we could not accept. Negotiations for a new agreement February 20 to March 8 made no progress. Italy is demanding a vast route package for itself--including routes both beyond New York to Mexico City and beyond Los Angeles to Tokyo--that in its entirety is just out of the question, and, at the same time, is insisting on cutting down possible routes that US carriers might serve under the present Agreement. Moreover, Italy has refused to discuss the operational principles until its route demands are satisfied.
/3/For text of the agreement, signed in Rome June 9, 1947, and entered into force that day, see 61 Stat. 4074.
During the Vice President's recent trip to Italy, Prime Minister Moro indicated Italy's great concern with our air negotiations, declaring that it was time to take a "hard political look" at them./4/ Relevant political, economic and commercial factors have been taken into account in preparing the United States position. In view of the Prime Minister's intervention, it was arranged with Italy to postpone the resumption of negotiations to May 2, so that we could ask you to review and approve this position. Essentially, we propose to offer the Italians a route package that includes the traffic rights they presently have plus a round-the-world route that they want very much. We will again offer them a round-the-world route via Miami to Mexico City and beyond, but if they reject this, we may have to give them instead a route via Los Angeles or San Francisco and across the Pacific to Tokyo. We would want, in exchange, route opportunities for our carriers similar to those we now enjoy, including affirmation of certain beyond rights that we are not now operating. We would also insist on an agreement based on established US aviation policy regarding capacity and other operational principles. Italy may continue to demand both the route beyond the West Coast and the route to Mexico. We are opposed to this because it is not justified on aviation considerations.
/4/These discussions were reported in telegram 5115 from Rome, April 1. (National Archives and Records Administration, RG 59, Conference Files: Lot 67 D 586, CF 142)
To preclude Italian miscalculation that the United States might be pushed into concessions on routes or capacity principles greater than we have contemplated, we believe it necessary to advise Italy that we are prepared, albeit reluctantly, to accept cessation of air services between the two countries rather than get into an agreement or an ad hoc situation inconsistent with US interests. We recognize that termination of air services would represent failure to reach agreement on essentially a commercial endeavor with one of our strongest supporters in all aspects of Free World cooperation, including NATO, Atlantic Community affairs and international monetary reform. Nevertheless, we believe that this approach is realistic, sensible and fair. If we cannot achieve an acceptable agreement, you would be asked to make a final determination on the cancellation of air services and would be presented with all relevant factors for your consideration.
This Department, the Civil Aeronautics Board, the new Secretary of Transportation and the US carriers all recognize that this negotiation is a particularly important one; failure to reach a new agreement would result in some possibly serious political repercussions in our relations with Italy, and could involve some transportation tie-ups. On the other hand, if the Italians--one of our strongest aviation partners--were able by denouncing the agreement to get us to make undue concessions on routes or on our fundamental capacity principles, our submission would be a signal to others to do likewise. (Spain has already told us officially that it may denounce its agreement to get what it wants, depending on what happens in the Italian negotiations.)
The three American carriers operating to Italy have committed themselves in writing to support cessation of services if an acceptable agreement cannot be worked out. It is also widely accepted that Italy deserves to be given good routes. However, Pan Am, Northwest and a few other carriers that hope to get into the West Coast-Orient market in the future (but not TWA), oppose the grant of a West Coast-Tokyo route to Italy. Eastern is violently against granting New York-Mexico City to Italy, but is less opposed to a Miami-Mexico grant. We believe the grant of either the Miami-Mexico route or the transpacific route from California is justified to get a good agreement with Italy. On the other hand, to go beyond what we are proposing to grant Italy would without question generate intense dissatisfaction and opposition from virtually all US airlines. A settlement along the lines I am recommending will cause some dissatisfaction, as mentioned above, but our best judgment is that there will be grudging recognition of its unavoidability, and little or no public criticism by our airlines./5/
/5/In a May 3 memorandum to the President, Francis Bator reported that at Johnson's instructions he had checked with the major U.S. carriers on their views regarding negotiations with the Italian Government. On the basis of these talks he recommended and President Johnson approved "the State instruction, but tell them to hold off as long as possible before they suggest the Trans-Pacific route." (Johnson Library, National Security File, Country File, Italy, Vol. 5)
We have discussed this matter with Senator Monroney and the staffs of Senator Magnuson and the House Commerce Committee. They have indicated support both for a reasonably generous route grant and for any suggestion of cessation of air services that may be necessary.
Nicholas deB. Katzenbach
131. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, May 18, 1967.
/1/Source: Johnson Library, National Security File, Country File, Italy, Filed by LBJL. No classification marking.
The State Department has been holding informal discussions with the Italians about a broad agreement for cooperation in scientific activities. The Italians started the talks because they are interested in strengthening their bilateral relationships with us on these matters and we have responded because of certain attractions we can see in having a broad "umbrella" agreement with them that would serve both scientific and foreign policy purposes.
Last November Professor Vincenzo Caglioti, the President of the National Research Council of Italy, and some of his associates visited Washington and a specific draft agreement was discussed./2/ However, it was agreed that signing should be deferred until specific projects could also be announced.
/2/No record of this meeting has been found.
Several collaborative projects are now ready for initiation and final preparations are being made to conclude the agreement. Present planning is for an agreement to be signed in Washington early in June with the Under Secretary of State and Dr. Hornig signing for the U.S., and Leopoldo Rubinacci, the Italian Minister for Coordination of Science and Technology, signing for Italy. It is also contemplated that certain members of Congress will be participating in the signing ceremony.
This sort of "umbrella" agreement, not restricted to specific fields of science nor to specific agencies or institutions, represents for the U.S. an innovation in the conduct of international science relations. Copies are enclosed of the draft agreement and the guidelines developed for the Executive Agency that will coordinate this program on the U.S. side (it is intended that the National Science Foundation serve as the U.S. Executive Agency). Both the draft agreement and the guidelines have been favorably reviewed by the Federal Council for Science and Technology./3/
/3/For text of the agreement, signed in Washington June 19, 1967, and entered into force the same day, see 18 UST 1268.
Because of your strong interest in maximizing international cooperation in scientific matters, the State Department would like to determine the extent of your interest in associating the White House with the signature of this agreement. In view of the fact that this may be the first of a number of similar agreements to be signed with other countries, and the current demands on your time, I recommend that the ceremony not be held at the White House but that an appropriate Presidential greeting to the signers might be prepared for release at the ceremony at the State Department.
Walt
Approve/4/
Disapprove
See me
/4/This option is checked.
132. Memorandum of Conversation/1/
Washington, June 24, 1967.
/1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL IT-US. Confidential. Drafted by Stabler on June 27.
SUBJECT
Conversation with Ambassador Ortona
PARTICIPANTS
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.
2. NPT
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.
/2/Not further identified.
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-?-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 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, 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.
133. Memorandum for the Record/1/
Washington, August 22, 1967.
/1/Source: Department of State, INR Historical Files, 303 Committee Files. Secret; Eyes Only.
SUBJECT
Minutes of the Meeting of the 303 Committee, 22 August 1967
PRESENT
Mr. Rostow, Ambassador Kohler, Mr. Nitze, and Mr. Helms
Admiral R. L. Taylor was present for all items.
Mr. David Murphy was present for Item 1.
Mr. Rolfe Kingsley was present for Item 2.
Mr. Jacob Esterline was present for Item 3.
Mr. Archibald Roosevelt was present for Item 4.
Mr. Joseph Smith was present for Item 5.
[Here follows discussion of agenda item 1, concerning programs for the Soviet Union.]
2. Italy--Covert Action Program for FY-1968
The wind-down of covert political support to Italian parties ahead of schedule was enthusiastically welcomed by the committee. The paper was approved as submitted./2/
/2/The [text not declassified] paper for the 303 Committee, August 4, stated the following regarding the wind-down of covert political support:
"The point has been approaching rapidly in recent years where the continuation of a large-scale covert action program in Italy would no longer have pertinence. Currently, socialist unification has been achieved and the Christian Democratic Party (DC), [1 line of source text not declassified] despite continuing financial problems, is at least for the time being well united behind its incumbent political secretary. Domestic funds are available if [less than 1 line of source text not declassified] political groups make sufficient efforts to tap them. In addition, the amount of covert assistance the United States is prepared to offer in light of other more pressing commitments no longer equates with the amounts needed to have other than peripheral impact on the Italian political scene." (National Security Council, Special Group/303 Committee Files, Subject Files: Italy)
[Here follows discussion of the remaining agenda items on programs for Latin America and Africa.]
134. Memorandum of Conversation/1/
Washington, September 19, 1967, 11:30 a.m.
/1/Source: Johnson Library, National Security File, Country File, Italy, Saragat Visit. Secret. Drafted by Seidenman and approved in S on September 29. The memorandum is Part V of VII; memoranda of conversation of the other portions of the discussion are ibid. The meeting was held at the White House.
SUBJECT
Fiat Deal
PARTICIPANTS
Italy
His Excellency Giuseppe Saragat, President of Italy
His Excellency Amintore Fanfani, Minister for Foreign Affairs
His Excellency Egidio Ortona, Italian Ambassador to the U.S.
Mr. Sergio Romano, Interpreter
United States
The President
The Secretary
The Honorable G. Frederick Reinhardt, American Ambassador to Italy
Mr. Neil Seidenman, Interpreter
President Saragat said that another matter of concern was the Export-Import Bank loan to Fiat./2/ Although it was not of major importance, it had a definite psychological value. Fiat was a private corporation whose operations were less subject to public scrutiny than were those of Alitalia. Fiat has an annual turnover of approximately $2 billion. It employs some 12,000 workers and was obviously no small company. The transaction in question concerned a loan of $50 million. Fiat does not need the money. Its President could take this amount from his own pocket. $50 million represents only about one-fortieth of Fiat's annual turnover. The Fiat proposal to construct an automobile industry in the Soviet Union was motivated by the desire to encourage a commercially-orientated economy in the Soviet Union. It was also motivated by the desire to promote a higher living standard and possibly a subsequent reduction of military expenditures. Fiat is not going to the USSR to produce missiles. Rather it will produce automobiles and hopefully will contribute to the improvement of the lot of Soviet workers and consumers. This would contribute to the cause of peace and by promoting a consumer-oriented economy would play a part in promoting the evolution of democracy in the Soviet Union. The $50 million loan had not been requested by Fiat from the standpoint of need. Rather the purpose was to show that the Fiat project had no anti-American overtones, and to insure that it could not be exploited for political or ideological reasons. For this reason, the problems which arise from the blocking of the loan are not financial, but are psychological.
/2/During an October 7, 1966, speech in New York, President Johnson announced that the Export-Import Bank was ready to guarantee Italy credit for the purchase of U.S.-made equipment for the Togliattigrad Fiat plant. For text of his statement, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1966, Book II, pp. 1125-1130. In 1967 both the House and Senate adopted amendments to the Export-Import Bank authorization legislation that banned the loan guarantees.
The President said that he was not altogether familiar with this aspect of the subject, but would have the matter carefully reviewed. He said that the Administration agreed that the Fiat project is a constructive and useful step and that we are in accord with the goals which it seeks to achieve. For this reason, we had asked the Ex-Im Bank to approve the loan. In our opinion, the Fiat transaction would have effects in the Soviet Union that would be in the interests of all the parties involved. Unfortunately, some members of Congress had felt that to approve the loan would be giving aid to the Communists. It sometimes takes a considerable amount of time to educate some of the members of Congress.
The President said that for the last four years, the Administration had been successful with Congress both on the domestic front and in international affairs. However, we were now approaching an election year and anything that can be used to embarrass the Administration is fully exploited by the opposition and even by some members of the party in power. The latter may have presidential aspirations or other individual interests which they wish to promote. Thus, many things that the Administration feels are worthwhile run into obstacles and we then must wait until after the elections or "until the Republicans take over." The President assured President Saragat that he would do everything possible to have the matter reconsidered.
President Saragat said that in his contacts with the late Professor Valletta, former President of Fiat, he had been told that it was essential to know exactly where the US stood before entering into a contract with the USSR. President Saragat said that had the US expressed opposition, Fiat would not have signed the agreement. He said that the Italian Communists find themselves in a very uncomfortable situation each time visitors from the USSR arrive in Italy and then make a point of expressing their admiration for Fiat.
President Johnson said that he himself owned a Fiat convertible about which he is very enthusiastic.
135. Memorandum of Conversation/1/
Washington, October 17, 1967, 6:30 p.m.
/1/Source: Johnson Library, National Security File, Country File, Italy, Vol. 5. Confidential. Drafted by Seidenman. The memorandum is Part II of IV. The meeting was held at the White House.
SUBJECT
Internal Italian Political Situation
PARTICIPANTS
Italy
The Honorable Mariano Rumor, Secretary General of the Italian Christian Democratic Party
His Excellency Egidio Ortona, Ambassador of Italy
United States
The President
Mr. Walt W. Rostow, Special Assistant to the President
Mr. Joseph Califano, Special Assistant to the President
Mr. Neil Seidenman, Department of State Interpreter
Mr. Rumor said that as a responsible representative of the Italian Christian Democratic Party, he wished to convey some information which the President, who shoulders such great responsibilities throughout the world, might be pleased to hear. Mr. Rumor said that the Italian political situation today is characterized by stability. He said that the center-left coalition and the inter-party agreements are working well and will continue on a solid footing for a long while to come. Mr. Rumor said that he and his associates had from the beginning felt that the United States would stand behind them in the efforts they had been making in recent years. They were convinced that they were moving on the right path toward the stability of democratic institutions in Italy. Mr. Rumor said that this political stability had benefitted the economy as well, to the extent that Italy had recovered from the 1964 recession.
Mr. Rumor said that the Italian national elections in 1968, which will take place before those to be held in the United States, promised to be of particular significance. Hopefully the elections will further consolidate the existing situation in Italy. It was because of these elections that his discussion with the President was of significant importance. Mr. Rumor said that to put the matter simply, the work being carried out in Italy is undertaken with the knowledge that America, despite its geographic distance, stands behind them.
The President assured Mr. Rumor that no one takes greater interest in these matters than we in the United States.
Mr. Rumor thanked the President and said that he was quite sure that this was true for, in fact, Italy represented a sort of boundary line with the Communist East. For this reason, the success of the Christian Democratic Party contributes to the strength of democracy throughout Europe. In addition, it promotes the development of unity in the European Community which the United States desires and in which the United States places its confidence. Mr. Rumor said, however, that there are some roadblocks to be overcome such as the resistance on the part of the French. With patience and perseverance, however, our efforts will succeed and we will arrive at the day when Great Britain will join Europe and when political unification will be attained.
The President said that no one should have the impression that there is any less interest in the United States concerning the affairs of our friends in Italy and in Europe because of the problems which we must cope with in other parts of the world. He said that our interest in Latin America, Africa, and especially Viet-Nam caused no diminution in our interest in Europe. The President said that we will continue to do our duty in these other areas, but we will also continue consistently to give our attention and understanding to matters of concern to Europe.
136. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, December 1, 1967.
/1/Source: Johnson Library, National Security File, Country File, Italy, Vol. 5. Limited Official Use.
SUBJECT
U.S.-Italian Civil Aviation
When President Saragat visited you he raised the issue of U.S.-Italian civil aviation relations. He said that the former U.S.-Italian Civil Aviation Agreement, which Italy renounced, gave Italy less generous terms than the agreements we had with Germany, France and the UK and suggested its terms were related to the World War II armistice settlement. He said that this issue was of considerable psychological importance to Italy and you assured him that you would have the problem carefully reviewed.
At Tab A is a letter from Secretary Rusk to Foreign Minister Fanfani/2/ transmitting on your behalf our comments on President Saragat's remarks. Secretary Rusk has approved the letter.
/2/Not printed.
The Rusk letter makes the following points:
--the former agreement was not related to the armistice settlement;
--it provided U.S. and Italian carriers approximately equal revenue opportunities. On this criterion, which is fundamental to all our aviation negotiations, it was equal to our agreements with other countries, including Germany, France and the UK;
--the U.S. is prepared to grant Italy new commercial air rights as valuable as those it would obtain from Italy in exchange. We made a valuable new offer in our most recent negotiations because we very much wanted to settle this issue. We continue to be willing to consider other alternatives consistent with the principle of obtaining overall economic balance;
--we want to get an exchange of views going again so that we can settle this issue.
The letter closes the door on any further review by yourself. State believes, and I think it is probably right, that unless we do this we will not be able to get the Italians back to the table to negotiate a fair commercial bargain.
Walt
Approve State letter/3/
Disapprove
See me
/3/This option is checked and a handwritten notation indicates that Fried's office was notified.
137. Record of Meeting/1/
Rome, December 23, 1967.
/1/Source: Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 55. Secret. Prepared on December 27. President Johnson was completing an around-the-world trip that included stops in Australia December 21-22; Thailand, Vietnam, and Pakistan December 22-23; and Italy December 23. He returned to Washington on the morning of December 24.
Meeting of the President with President Saragat, Prime Minister Moro, and Foreign Minister Fanfani, Saturday evening, December 23, 1967, at President Saragat's villa, Castel Porziano
President Saragat had talked privately with President Johnson for about 20 minutes before the meeting started. The following is an account of the more general session. President Saragat opened by expressing his pleasure at the recent wedding in the Johnson family. He said he had met Captain Robb and had thought him a fine soldier. He also took the occasion to wish the President and his family a happy Christmas.
President Johnson expressed his appreciation. Prime Minister Moro then said it was a time to reaffirm the feelings of friendship which were again conveyed on President Saragat's recent trip to the United States. The President's current visit indicates American solidarity with Italy and with Europe in general. Europe needs that sense of solidarity and support from the U.S.; and Europe in turn must reciprocate. That is the central point of Italian policy: collaboration between Europe and the U.S. There were, obviously, difficulties in Europe, which saddened and worried the Prime Minister. There were those trying to prevent European unity and trying to make U.S.-European relations more difficult. But Italy and the U.S. must remain loyal to the concept of a unified Europe which worked in intimate collaboration with the U.S. Italy was determined to see the possibility of U.K. entry into Europe not damaged. But Italy doesn't want to break up what has already been built in Europe. Therefore, he hopes the U.K. will continue to indicate its interest in joining Europe. Italy will maintain a policy of constructive solidarity with both the U.K. and U.S.
President Johnson expressed his satisfaction at the continuity of these enlightened Italian policies, as expressed by President Saragat, Prime Minister Moro, and the whole Italian government. It is a marvel of modern communications that we can exchange views frequently face to face. He almost always found his own views in harmony with those of the Italian government; for example, they were explored in detail in Washington when President Saragat was there. Moreover, the American people are the friends of the Italian people, and want the U.S. Government to work with the Government of Italy. This underlying human feeling has strengthened both governments over the past 20 years. Specifically, the President was pleased with our common support for NATO, which we had reaffirmed at Adenauer's funeral. He was grateful for the collaboration between the U.S. and Italian monetary authorities. He appreciated Carli's recent support in the wake of the British devaluation. He was sure that Italy would not regret having supported the U.S. position. When the U.S. was a surplus country, we undertook the responsibility of helping deficit countries. We now look to the surplus countries to help us carry our burdens until we can get into balance. We shall be taking stringent steps in the near future with respect to our balance of payments, notably with respect to investments abroad. By wisely handling our investments, we can begin to turn a deficit into a surplus, which we intend to do. But we do not want to damage the liquidity position of others. We appreciated in the past, and look in the future to continued collaboration of Italy, Netherlands, and others who have been such good partners.
Finally, Vietnam. The tribute of the Asians to Prime Minister Holt was a tribute to the enlightened policy in Asia of white Australia. The growing solidarity of Free Asia was apparent to all of us in Canberra and Melbourne. It is evident that the North Vietnamese and those who support them cannot win in South Vietnam. The problem is how to apply enough pressure to bring about peace without widening the war. In no case will the U.S. withdraw. Less than one out of five in the U.S. supports our doing less than we are now doing. Two out of three want us to do more. The President's policy is that the war shall not be widened; pressure shall be continued; and we seek negotiations at the earliest possible moment.
All of the countries of the region agree with this policy: from Singapore and Malaysia, through Laos, up to Korea. We have the support of those who live there and who are in the greatest danger.
As for stopping bombing, the San Antonio formula/2/ is as far as we can go. We are prepared to stop bombing for prompt and productive discussions, assuming that the other side will not take advantage. For two months after August 25 we had a 300-square-mile circle around Hanoi and were in direct communication with Hanoi. On September 10, we made the formula--which Hanoi already knew--public, but the response was flatly negative.
/2/For text of the President's September 29 address at San Antonio, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1967, Book II, pp. 876-881.
We shall stop bombing if they stop bombing with hand grenades. But we cannot stop half the war. The Italian government should know that we have intelligence that two North Vietnamese divisions are now moving towards the South. We have stopped bombing five times, and they have responded only by increasing their flow of supplies during the pause.
The President does not believe that Hanoi is prepared to negotiate at this time. But he had noted Pope Paul's response to the Cardinals,/3/ and he wished to do everything possible to get discussions started. Perhaps discussions between the government in Saigon and members of the NLF on an informal basis would be the best route.
/3/Apparent reference to the Pope's December 8 statement welcoming announcement of a Christmas truce in Vietnam.
He wished the Italian government to know that he would take up this matter with Pope Paul and also urge him to see what could be done on behalf of the prisoners and on both sides./4/ We are prepared to have the arrangements for prisoners fully inspected on our side.
/4/A memorandum of their December 23 conversation is in the Johnson Library, National Security File, International Meetings File, Vatican.
The President concluded by saying that we are prepared to leave South Vietnam when the aggression ceases and a constitutional government exists based on one man, one vote. This outcome was essential to the creation of a Free Asia, but equally to the maintenance of a Free Europe. If the U.S. were to pull out of South Vietnam, the Europeans would be the first to feel the consequences in the form of diminished security.
W. W. Rostow/5/
/5/Printed from a copy that bears this typed signature.
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