Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

865.062/7–2654: Instruction

No. 782
The Secretary of State to the Embassy in Italy¹

confidential
No. A–66

Washington, July 26, 1954.

• Subject: IRI and Confindustria

The emergence of the dispute regarding withdrawal of IRI firms from Confindustria² has brought home to the Department how little information is available regarding the organization, legal position, and actual role in the Italian economy of Confindustria. The Department appreciates the difficulties of penetrating behind the scenes of Confidustria’s operations in the absence of day-by-day business contacts such as those required with government agencies. The Embassy is requested, however, to submit a basic report on Confindustria pooling all the information available to Embassy staff members. From the fragmentary information available to the Department regarding such questions as labor negotiations, control of markets and output, control over prices as labor negotiations, control of markets and output, control over prices, and general archaic and restrictive business philosophy, the conclusion might be reached that Confindustria constitutes an obstacle rather than an aid to Italian adoption of healthy American business practices which we believe necessary if Italy is to progress in solving her basic economic problems. If this is in fact the case we would have no reason to be concerned at a weakening of Confidustria’s influence. The Department fully appreciates on the other hand that a battle over the withdrawal of IRI firms from Confindustria at the present time could have serious undesirable repercussions within the Christian Democrat Party and the Coalition Government and for this reason believes that we should keep aloof from this issue.

The Department recalls as does no doubt the Embassy the importance of the Italian Government’s taking the lead through IRI firms in bringing about enlightened labor standards, labor relations and personnel policies, increasing productivity efforts and encouragement of free unions both directly and through atmosphere in plants created by general plant policies. If IRI firms could be made pace setters in industry, whether or not they retained membership in Confindustria, this lead should encourage a similar approach to labor problems by other firms including those belonging to Confindustria. The Department suggests that if the Embassy has not recently done so it may seek an appropriate occasion to discuss such a program further with the Italian Government without, however, intervening in any way in the issue of the parliamentary resolution reported in the telegrams referred to above.

Dulles

1. Drafted by Howowitz and William E. Knight and cleared with Freund and Jones.
2. Reference is to the controversy in the Chamber of Deputies and within the Christian Democratic Party growing out of the proposal made in the Chamber on July 15 by CISL leader Pastore and supported by 31 Christian Democratic Deputies that the firms belonging to IRI, the complex of industries owned in full or in part by the state, should be separated from Confindustria, the confederation of privately-owned firms. The text of the Pastore motion was quoted in full in telegram 202 from Rome, July 15. (865.00/7–1554)