THE IMPACT ON THE EUROPEAN COMMUNITY OF A LARGER PCI ROLE IN THE ITALIAN GOVERN

Created: 1/17/1978

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MEMORANDUM

SUBJECT: The Impact on tho European Communityarger PCI ole In the Italian Goverrovent: European Leaders' Views!

Gest European political leaders and European Community officials do not seem especially alarmed about tlie effects on the ECarger PCI roletaly'sexacple, PCI participation along with the Christian Democratsoalition government,abinet role for the PCIJ

/These leaders have expressed certain concerns arising not so much from apprehension thatovernment would directly challenge EC Institutions and regulations asague unease about dealingarty that, whatever Us evolution, still calls itself Coirmunlst and has never been part of the European political establishment.arger PCI role In Italy's government would be likely to Influence political cooperation In theexample on issues like CSCE--and the prospects for defense cooperation In the Community framework, but few Europeans sees to have thought through these consequencesetail. Their concern arises more particularly from the prospect that the US would view such an Italian government with hostility^

/However. European leaders believe that they can do little toa larger PCI role. Most of then.suspect tMttaly'sthereo alternative that offers any hope ofor economic reform. Most would be likely to respond todevelopment by trying to disarm Italyuropean embrace,by shunning It. This approach woulderious dllormaIf the US in contrast ostracizes an Italian government

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As regard* Its Impact on EC Institutions andarger role for the PCI seems to inspireow leve' of concern among most European leaders. They are aware that tho PCI has firmly supported Italy's membershiphe EC for many years and that the party sees participation in ECthe Europeanenhancing Its own legitimacy^

The PCI agreed with the Christian Democrats,he program accord of last June, to support closer EC Integration In many areas. Including balance of payments adjustments, export credit policy, regional aid policy, the common agricultural policy, energy policy, and relations with the Third World.

Moreover, In Its own new medium-term economic plan, the PCI reiterates these alas and callsesumption of the Ccesxnity's integration process. -In particular, It rules outoften alleged to be one of the most serious dangers European Cartoonist parties pose for thea solution toconomic problems.

PCI proposals for agricultural reform as spelled out In Its plan arelose harmony with the Christian Democratic government'sreform plan of last August and with Ideas now current among -iny EC officials on the reform of Mediterranean agriculturej Community.

On industrial policy, the PCI's medium-term proposals for more extensive economic planning seem to aim at moving Italy closer to the practice of several other EC countries^ notably France). The PCI has opposed more nationalization of Industry.

Moreover, the PCI hasonservative positionupporteconomic stabilization under IMF and EC guidelines. Itunion pressures for more economic stimulus to combat Its position on this 1ssut Is as restrained as that af thaDemocratic government, which, like other governmentshe

has already poured massive subsidies into Industry to htlp

restrain rising unemployment.

Ghus, there is littleCI policy to provoke apprehensionleaders aboutarger role for tha PCI might affect EC

and programs. Europeans believe that, at least for some

time, PCI officials In Italy wouldautious and cooperative ratherisruptive approach to the Community^

leaders observe that the Community as suchUs members are prosperous and suffers when they are tn because this raises obstacles to closer cooperation. arc widespread among Comnunity countries now, and areIn Italy. But many European leaders are skeptical aboutDemocrats' capability to Institute the economic andthat would revivify Italy's economic performance. Theseseem to requiretnlaui PCI cooperation and probably, as

the price for that cooperation In tht longere formal rolehe government than the party has at presentj

Qhus, while European officials would doubtless prefer continued Informal PCI Supporthristian Democratic government, theythat PCI participationoalition government, for example, would do far tore forhencehealth thanrisis throwing the PCI and thus the unions Into In particular, tuny leaders suspectormal govern-mental role for the PCI could enhance its ability to persuade the unions to accept continued wage restraint and other forms of economic discipline. This prospect, to many Europeans, helps offset thethat political uncertainty might leadlight of capitalecline In Investmentsovernment Including the PCIJ

European leaders voice concern that.roaderofficial PCI role in Italy's government would disturb thesocial and political views at the basis of the Community as acntltyj

fjttwever. they also realize that that consensus has already beenmorethe economic crisis of the pastrs. Even conservative leaders find that they must rethink the legitimacy of the mixture of capitalism and social democracy that has characterized postwar Europe. In the perspective of such social and political ferment, many European leaders find PCI policies by andesponsible effort to address Italy's particular situation. In fact,.they seem toertain bulwark against more extreme proposal %j

Qome traditionally conservative Europeanexample Luxembourg's Prime Minister Gastonstressed their un-certaInty about the PCI's commitment to democracy. Other leaders, however.

argue

that democratic processes in Eurooe are so strong that they have effectively harnessed the PCI, forcing it to compete for power by seeking votesemocratic'systenQ

tin fact, conservative politicians' occasional threats to break off support for tha Italian Christian Democrats because of their cooperation with the PCI have apparently been defused by the very slow and tentative development of that cooperation. Moreover, some conservative parties maintain discreet contacts of their own with the PCIJ

fjhe dominant Impression European leaders convey in the sum of their public and private discoursebat, while they have little taste for Italy's prospects as the PCI edges closerormal governmental role, they also have little ability to Influence Italy's political evolution and little advice to offer about what alternativeas toCIwhen some Italian Christian Democrats themselves say the alternative may well be civil warp

typst European officials seem fairly confident that, in relation to either the EC's economic practices or Its democratic traditions, the/will be able to restrain, to manage, andense to "co-opt" the PCI should it attain the statusoalition government partnertaly??

it- Europeans have raised In detail theerm question of how such an event might Influence EC political cooperation on foreign policy Issues or the development of EC defense cooperation. They may hope to avoid serious clashes with an Italian coalition goverrment because the foreign and defense ministries would likely remain Christian Democratic, because the consultation and consensus procedures In EC political cooperationtrong moderating effect on all the parlies, and because many Europeans partly share the PCI's desire to avoid antagonizing the Soviet Unlonj

^However, European leaders acknowledge Italy's crucial role In maintaining the Cariinunlty's security, especially In the Mediterranean. They reawln skeptical of PCI Intentions toward NATO and would seek continued assurances that an Italian government; Including the PCI would not jeopardize the alliance or hamper European defense cooperation. For example, they have sought to test the loyalty of PCIEU by assigning them the task of writing ar. evaluation of Soviet and East European Implementation of the Helsinki acordsj

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jne of the strongest'sources of European leaders' concernarger PCI role in Italy's governmentheir apprehension that the US would reactostile manner to this trend and by extension to the EC itself. This, soce of then fear, could promote the fragmentation of the Community as its members seek toilateral links to the US in place of the emerging US-EC relationship^

elieve that European leaders,peaking to US officials, are tempted to overstate their real concerns about the PCI partly in order co insure that they themselves will be trusted by Washington whatever happensome. In practice, they prefer to avoid hostility or moves that would isolate Italy and to maintain low-profile efforts to keep Italy fully engagedts institutional ties with the West, despite the PCI's presence;/

QxpHdt US opposition to the PCI and othern Communist parties thusilemma for European leaders, because Itwith their own more pragmatic approach. It also threatens both their sense of autonomy In domestic politics and their confidenceS support for political cohesion within the Community/^

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