366. Briefing Memorandum From the Director of the Policy Planning Staff (Lord) to Secretary of State Kissinger1

Italy: If the Communists Come In

This memorandum was drafted by a member of my staff who wanted to explore some ideas and generate an exchange among senior officials concerned with Italy in the Department. (All concerned appreciate the sensitivity of the subject and have cooperated in limiting distribution.) The finished product has benefited considerably from the criticisms and suggestions of those who read earlier drafts, but we have made no attempt to reduce it to consensus.

The issue of Communist participation in an Italian government has become more urgent than when we began this exercise, as a result of recent developments which make early elections more likely than we had thought. I would still bet against an historic compromise any time soon; but I would not bet more than I could afford to lose.

I wish I could tell you that we had discovered a “good” way of dealing with the situation if it should arise. Unfortunately, none of the options in this paper is very attractive and all carry substantial risk. The paper does, however, do a tougher-minded job of analyzing what realistic options we would have, and their broader context and consequences, than I have seen elsewhere.

Summary of the Options

The paper sketches what we think would be happening in Italy itself; the response of other West European governments; the impact [Typeset Page 1119] on the fortunes of other Western Communist Parties; and the likely Soviet reaction. It then discusses the options which would be available to us and the costs and risks associated with each.

Our sources of influence on the Italian situation would include the PCI’s desire for signs of US acceptance; our influence over Italy’s access to international financial assistance and the role of American investment in the peninsula; and our ability to modify, if not end, Italy’s membership in the Atlantic Alliance. We could use these assets either to punish the Italians for having taken Communists into the government at all (to demonstrate beyond doubt to Italians and other West Europeans that they must choose between coalition with Communists and cooperation with us) or to bargain with an historic compromise government for behavior (relatively) pleasing to us, or for some mixture of the two.

A. A hard line policy could vary from across-the-board ostracism of Italy (refusing international financial assistance, extreme coolness in bilateral relations, pushing for as much qualification of Italy’s NATO role as we could get without rupturing the Alliance); to an attempt to cause the government’s collapse by denial of economic assistance while preserving and even strengthening ties with the Italian military (including in NATO); to a “good cop/bad cop” division of labor between us and the West Europeans through which we would hope to keep Italy in some Western grouping even while “punishing” it.

The costs of a hard line could include damage to other Western economies and restrictions on the use of our military bases in Italy, if not the loss of the bases altogether. Moreover the policy might boomerang, generating sympathy among moderate Italians for a PCI which could pose as martyr to our imperialistic meddling in Italy’s internal politics. We might only give the PCI a foreign scapegoat if it failed to be the force which finally could make the Italian government “work.”

B. Trying to bargain with an historic compromise government would mean basing our actions in international economic fora on its economic behavior rather than political grounds, and making business as usual in NATO contingent on the security policies the government accepted and its own willingness to go on contributing to Alliance activities. This policy would be easiest to implement, and popular with those West Europeans who dread being pushed to choose between us and one of their European Community partners.

The costs, however, would be at least conditional US acceptance of the PCI—to the considerable benefit of Communist parties elsewhere in Western Europe. Moreover, the areas of behavior to which our specific sources of leverage are most relevant are those in which the PCI would anyway be on its good behavior (economic policy) or at least trying to stay neutral and inoffensive (NATO activities).

[Typeset Page 1120]

C. “Testing” the PCI would involve looking for ways to put hard policy choices to it on international as well as domestic issues—choices which would tend to split the party and (depending on how its leadership came down) either to discredit or genuinely to domesticate it.

We would build on your argument last January to Brandt and Kreisky that even if the PCI were genuinely independent of Moscow, and even if it were sincere in its acceptance of democratic procedures, it still would not be a constructive partner in Western security, political, and economic cooperation. Important West Europeans who would like to help us frustrate the Communist bid for power—Schmidt, Giscard, some Italian moderates—would, if our tests seemed reasonable, join in trying to make the PCI feel compelled to prove you wrong.

No one is certain we could make this policy work. Berlinguer has been masterful in devising forms of words which so far have managed to satisfy both Italian moderates and militants within his own party. By staying out of the Foreign and Defense ministries, PCI leaders would hope to be able to punt on sensitive international issues—e.g., not to be obstructive of Italy’s NATO role, but not to have to do anything very controversial about it, either. But there is an important difference between being independent or even critical of the Soviet Union and being (and being seen to be) an active participant in the Western/capitalist camp. On pages 21–23, we sketch some examples of the sort of “active participation” we could reasonably propose which might be difficult for the Communist leadership in Italy, and awkward for Communists elsewhere in Western Europe to react to.

The costs of such a policy are similar to those of “conditional acceptance”: it would imply a willingness to work with Communists in West European governments, depending only on their immediate good behavior. While the aims of the two strategies would differ, the chief distinction in practice would be how tough a standard we set for “good behavior.” Under the more aggressive “testing” approach we could overplay our hand and seem to be trying to devise conditions impossible for the PCI to meet—thus scaring away those European moderates who would like to help, and incurring some of the penalties of the “hard line” as well as of “conditional acceptance.” Moreover the PCI might manage to meet our conditions, at least to the public satisfaction of even such anti-Communists as Schmidt and Giscard. In putting tests to it, we also would be putting to the test your assertion that Communist participation in government would be incompatible with Western cooperation. The assumption behind this policy would be that it was better to try to force and dramatize certain issues early, rather than letting the Communists choose the ground and set the pace by which they were to establish themselves as part of the governing spectrum.

This memorandum does not address present US policy, but some implications can be drawn from it as to how we should position our [Typeset Page 1121] selves now in order to be able to deal with an historic compromise government if one should be formed. It seems to reinforce the appropriateness of warnings that PCI participation in government would endanger Italy’s ability to contribute to the Western partnership. If there is any validity to the “testing” thesis, we would want Communist leaders to have a keen sense of needing to prove themselves. We should, in sum, play hard to get.

I do think we should watch the way our warnings are worded. European leaders have got the message that Communist participation in any of their governments would make it harder for us to maintain US public support for NATO. But we may have reached the point of diminishing returns—of doing more to arouse a nationalistic backlash than to buck up our friends.

When you talk about Europe you will have to say something about the problem. But I believe it should be in terms of what damage the Communists would do to Western cooperation, rather than anything which could be misconstrued as a threat of the damage we might inflict. If the PCI should one day share power, we would want it, and not ourselves, to be on the defensive about the harm its actions might do the Western partnership.

  1. Summary: Lord summarized and forwarded a paper entitled “Italy: If the Communists Come In.”

    Source: National Archives, RG 59, Records of Secretary of State Henry Kissinger, Entry 5403, Box 19, NODIS Briefing Memos, 1976, Folder 1. Secret. Drafted on April 13 by Jenone Walker of S/P. The attachment, an April 6 paper prepared by Walker, is attached but not published.