Foreign Relations of the United States, 1958–1960, Western Europe, Volume VII, Part 2

230. Memorandum for the Record by the Assistant Secretary of Defense for International Security Affairs (Irwin)⁰

January 5, 1959.

MEMORANDUM FOR RECORD ON VISIT OF SECRETARY McELROY WITH PRIME MINISTER FANFANI—December 11, 1958, 6:00 p.m.¹

PRESENT WERE

• Secretary McElroy
• Ambassador Zellerbach
• Mr. Irwin

After an exchange of greetings and pleasantries, Prime Minister Fanfani said that he thought there may have been some misunderstanding as a result of earlier Italian discussions with General O’Hara that day,² and that he wanted to be sure that the Secretary understood clearly Italy’s position with respect to the deployment of IRBMs in Italy. He said they were happy to have them, but that they did have a financial problem. In order to meet MC-70³ force objectives that the Italian Government had decided to increase its military budget 4% each year for a period of five years, thus making an over-all increase of 20%. He said that this was the maximum Italy could do and that the increase would go toward supporting both the 9–1/2 divisions required by MC-70 as well as the five Italian divisions that were listed in MC-70 as second echelon divisions. He said that from the Italian budget they would be able to earmark some five billion lire to pay the annual operating and maintenance costs of the IRBM squadrons. If the expenses exceeded five billion lire, Italy would not be able to meet them and he hoped that the United States would assure Italy, in such a case, that it would meet such excess expenses. He said he hoped expenses would be less than the five billion and, therefore, there would be no need to call upon the U.S., but the Italians needed this assurance before they made final arrangements for the IRBM deployment.

Mr. McElroy spoke with appreciation of Italy’s increase in their defense budget, and with sympathy toward the fiscal problem that Italy had. However, he pointed out that this type of commitment might have policy problems with respect to other NATO countries and that it might create an undesirable precedence. He also pointed out that such a commitment was open-ended with many variable and unknown factors involved, that while the United States would consider the problem, he felt it unlikely we could do as the Prime Minister suggested and that, of course, we could not make a commitment at the present time. Mr. Fanfani said he understood, that he was not asking for a commitment now but just wanted to explain the problem to the Secretary. He asked if he could speak a moment on “your side”. He then pointed out that such a commitment need not affect the total aid given Italy. For example, the U.S. has provided Italy with a varying amount of military assistance from year to year. If the U.S. had to meet the expense over and above five billion lire for the IRBMs, it would be entirely within U.S. control to decrease other military assistance so that the total assistance would remain at whatever figure desired. He said that his colleagues felt we must have your assurance on the IRBMs, but at the same time he realized that the U.S. has complete flexibility with respect to the over-all program. Mr. Fanfani then asked if the United States would be willing to discuss with Italy how best to meet any expenses exceeding the five billion lire.

Mr. McElroy said that he thought that might be a way to handle it, that while the U.S. could not give a commitment, it might well be able to discuss with Italy the problem of any excesses in a particular year. He said it might be a factor that the U.S. could consider in establishing an over-all military assistance program. However, he thought it important to avoid any system whereby the two Governments were involved in a joint accounting scheme, as that would lead only to accounting disagreements and perhaps disharmony.

Secretary McElroy reviewed the fiscal proposals that the United States had made to Italy as to the handling of the IRBMs, and specifically asked if the Italian Government would pay for the cost of the land required to deploy IRBMs. Mr. Fanfani replied that Italy would assume that obligation.

The conclusion of the meeting was that Secretary McElroy would consider the problem. Both the Secretary and Prime Minister Fanfani agreed that their conversation was explanatory and exploratory and would not be considered final or a commitment.

Comment: Following this meeting with Prime Minister Fanfani, Secretary McElroy called on President Gronchi, reported in a separate memorandum. Although President Gronchi was less specific than Mr. Fanfani, he gave an impression that Italy might not be able to bear any of the annual operating and maintenance costs of the IRBMs.⁴

John N. Irwin II

0. Source: National Archives and Records Administration, RG 330, OASD/ISA Files, Country Files, Italy. No classification marking.
1. McElroy visited Italy on December 11 at the invitation of the Italian Government prior to attending the December 16–18 NATO Ministerial Meeting in Paris.
2. No record of this meeting has been found.
3. The MC-70 program, approved by NATO in May 1958, established a Minimal Essential Force Requirements plan for the period 1958–1963 for all member states. See Part 1, Document 131.
4. The memorandum of McElroy’s December 11 conversation with Gronchi is in National Archives and Records Administration, RG 330, OASD/ISA Files, Country Files, Italy.