280. Memorandum of a Conversation, Department of State, Washington, December 6, 19571
SUBJECT
- Pella Plan
PARTICIPANTS
- Ambassador Attilio Cattani, Director–General, Economic Affairs, Italian Foreign Office
- Count Giuseppe De Rege, Counselor, Italian Embassy
- C. Douglas Dillon, Deputy Under Secretary
- E. T. Long, WE
Ambassador Cattani stated he wished to elaborate on the Pella Plan. He emphasized the lack of any existing body to promote economic development in the Middle East and the need to guide the Middle Eastern countries toward Western concepts. He pointed out that there was no assurance that the Pella Plan would be a success but said it was necessary to try something along these lines, to provide some “hope” for the Middle East. After mentioning the need to have something constructive in this sense come out of the NATO Heads of Government meeting, he stated that Italy felt it had to discuss the Plan with its European friends before the meeting to ascertain if and how much they were willing to sacrifice and then to assess their reactions after the meeting.
Mr. Dillon said it would be difficult for us to use Marshall Plan funds for the Pella Plan, that there was no logic for using them only for the Middle East. He pointed out that when the suggestion of using Marshall Plan reflows for the Development Loan Fund came up in Congress last year, it was decided further study should be made. Although the Executive has not as yet taken a definite position on this issue, it may be expected that Congress and the Executive will discuss it at length during the coming session. He commented that the DLF was more logical an approach for the US, that the DLF could contribute as much or even more to a European [Middle East?] fund than the Marshall Plan payments would permit. Secondly he said we weren’t sure that the yardstick envisioned under the Pella Plan (i.e., additional contributions tied to the size of a country’s Marshall Plan loans) was valid, that there was no particular relationship between the size of the loans and the size of the various countries. Mr. Dillon pointed out that as the Secretary had indicated earlier we were interested in the principle of cooperative efforts of this nature, that we certainly had no objection in principle to the Pella Plan. He also said that he felt Italian talks with the other European countries would have a positive effect on our side and would be constructive for the Italians. We would find it much easier to come up with something concrete when we had an indication as to the extent of European support of the proposal. With respect to the political aspects of the Middle East, he mentioned that we were currently studying within the government ways and means of helping out, one concrete idea being that of getting the oil companies to contribute to Middle East economic development.
In response to a question concerning the probable attitudes of other countries, Cattani said the Germans would be for the Plan in principle but would raise objections on the technical side, the French, though unpredictable of course, would probably go along in some [Page 668] measure, the Swiss would probably contribute, the Swedes might go along but probably would not, the Austrians perhaps would contribute in order to tie themselves more closely to Western Europe. He said the Northern European nations would undoubtedly follow whatever course the British took.
Mr. Dillon said that in view of Middle Eastern feeling against France, French participation shouldn’t be played up and perhaps it would be just as well for the French to go it alone in their own areas. He expressed some doubt that the UK, which has been reducing its foreign financial activities, vide Jordan, would be interested in a Pella Plan fund. Within the NATO and OEEC context, Dillon asked whether Greece and Turkey would be givers or receivers (Cattani replied he hoped Greece and Turkey would be satisfied somewhat through the FTA).
Cattani said the West collectively must have a device with which it can deal individually with the Middle East countries. He emphasized that the Middle East must be taught Western ideas and pointed out a center of Middle East technical assistance, located perhaps in Naples, might be an extremely valuable vehicle where European non–political technicians could instruct Middle East students. Mr. Dillon said this type of thing might be a constructive beginning.
- Source: Department of State, Central Files, 880.0000/12–657. Confidential. Drafted by Long.↩