Created: 7/15/1977

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INTELLIGENCE AGENCY Directorate of Intelligence.7



Politica in Italy arc never timele, andtare art aany Interpretation of theraachad br Italy's ma-or partiaz, on Co-muni te claim the tgraamant ia an ntstortcin tame o. both aubatanca and politicalPraaidan.oneervativ*t*ah-book."

On oloaa rending, the agraament appears to be farure-all for Italy's problem, but on tho other hand it

ood deal morei

Fanfani. In practical terms, ood etart touard combatting erina andand controlling public ezoendituree. It aleo prooidae tha baaia for innovative meaeures in such fielda aa patronage and regxonal and local $ooarnnent.

and openly into tha policy mak-.xg praeati. At uith previous

Communimtm. this ono uill probably not bo reverted. Indeed, it it likely that theommuniot ro'e will

'* - " aC Vl"*

The .

a?romising beginning'indodged decisions inThe agreement is fullin the first two sections, dealing withand the economy, but tends to trail off intoin the remaining four sections which concernlocal government, schoolsniversities, presspolicy, and nominations to top jobs in the.

Public Ordert Tho" last major round of legislative activity on .the public order question took place following an upsurge of political violence in the springhe chie. issue then was whether to grant the police more latitude in dealing withfavored hy the Christian Democratic-Republican government but opposed by the left, which regarded it as an infringement on civil rights. After prolonged and bitter debate, the government won parliamentary approvalodest increase In pollcwwore permitted to use their weapon* uore freely and to search suspicious persons without the authorisationagistrate. The law also limited the power of the courts to grant "provinlonal liberty" to those arrested in connection with serious crimes.

The new interporty agreement deals moreith the public order situation and envisaocs the addition or significant new police powers to5 law. Including preventive detention of suspicious persons, the authority to raid suspected terrorist hideouts without prior judicialhe expanded use of wire taps in the detection and prevention of serious crime.

In addition, tho agreement goes into considerable detail in recoimnondingi

passage of laws reorganising the police and intelligence services;

--t r

mechanismin tho Interior Ministry to achieve closer coordination among th* security forces;

to improve tho penal system and streamline he judicial process.

The public order section of tho accord thus incorporates many of the measures which Christian Democratic and government spokesmen have called for in recentto combat lawless- ness. virtually the only pointon which-the Communists did not concede substantial ground was the question of policeoth the-Communists and the Socialists insist that any police union must bio the existing labor confederations--in which the left haa preponderant influence while the Christian Denocrats and other partieu'favor an ;independent police union. The document notes "thaterences 'romained. irreconcilable" and ieaves ^resolutionhe matter to parliament.

Admittedly, most of the proposed measurws are intended- -to deal more with tho symptoms than with the causes of Italianihe .measures add up.ore--vigorous attack on the problem than any previous efforts and could enable the Italians to turn the corner oniolence question.

The concessionsy the Communists attest not only

to the importance the party placed on bringing the talks'to

accessful conclusion but also to the Communists' desire to reinforce the public's growing perception of the partyorce for order.

Economic Policy: The economic portion of the accord givesanda'j for continued austerity. It specifically endorses thg objectives citod last April by the IMFizeable stand-by credit: reduction of tha budget deficit, reallocation of resources from consumption toand thenit labor costs.

ha public finance area the agreement urgesi


ceiling on public spending by national and local authorities' and specific procedures for ensuring that expenditure levels do not exceed availables they havo often donoi


of lindtecTta^ng authotity^tcr-Ipcal

of social insurarre costsar.s, auch as the introductioninwnaa .

temporary freeze on public sector hiring at both the national and the local government levels.

A variety of flsral measures are envisioned8 to further dampen domestic consumption,-stimulate investment, and create new jobs. In citing priority Investment targets, the agreement Is most specific on policy toward theSouth. For example, it urges that, arrangements be made by the end of July.for simplifying .the^wpenditure of invest-ient funds

hm agreement fails, however, t-ps withproblem of soaringtresses theincreased,de.

labor mobility,any reference to fundamental reform of* most wages-xoyrTse quarterly In response to the cost of living no chief factor behind.wage-push inflation

Labor remains adamantly opp-sed to changes xn the escalator, and tha Communists are thus reluctant to authorize any tampering with the system, even thoigh party economists recognize tne need for changes. The Cwnmunists realise they are vulnerable to cricicism from the Christian Democrats on this score are now seeking support in the labor movement for other changesthe wage structure aimed at reducing overall labor costs.

. Other Pointsi The rest of the

oresence at the local level;

way with less urgent '

Included are calls for:

of the educational system to relieve

. crowding and modernize the curriculum. The Coiraronists

shy away from specifics in'this'area because of their

strained relations with the student left;

variety of reforms relating to the press anda nettlecoroe issue because of theinfluence that has been taking place inourt ruling last year declaringmonopoly in the broadcast

| , I V s wm*

' ^

procedures forointments in the

publicelicate subject because

Christian Democrat* have traditionallyse of the public enterprises for patronage purposes."

Aw * -

tand* the: best.chance^of, getting on the books quickly are the specificions on* public order and.the economy. Widespread concern with violence gives theationale for settirg aside political differences on the public order question. The economic proposals; meanwhile, can be portrayed as, in part, an unavoidable response to international pressure, thus minimising the political cost of action in that area.

Efforts to give substance to other parts of theare likely to cause sharp controversy.

indications are that the Communists will press hardof the proposals that affect their interests

Regions: The Next

j. *

The issue looming largest in this regard is the regional autonomy question. Even before the program accord was reached, the Coimnunists, backed by the Socialists, were

pushing the Christian Democrats toaw providing for further decentralization of the government's powers. The law is designed to give theegions wide powers over schools and universities, local finances, and health care. arliamentary committee chaired by tho Com* munists has studied and amentled the decentralization program, and has forwarded its proposals to the government for appro/al. Bu Andreotti's cabinet is split on the issue: ministers who stand to lose some of their power and patronage axe resisting

^^nrralization. thewcll-Sc^iauscarhavo stopped;-shortng andreotti en ultimatum, but they have, madethat thev consider the decentralizationritical tost orchristian democratic intentions regarding the recent program agreement.

this tug-of-war has broad politicalcommunists le vit*-ly interested, not just becauseinovernments and have consultative roles

in eight. osers-but because

the christian


the christian democrats may now come under greater

eres.ure fro- the communists ince the communist leadership may^ ch-utian democrats at the center have been pusheda. far as possible before new elections. *ut some christian democratic attitudes have changed as well. at least in

in thelso from the difficulties encountered by


rSmocrlt, no longer ntand so much in awe of communist cleverness and toughness.

A devolution of more authority to the regions

level would be considerable in any case, and would not be


to the left" that brought the Socialists into the national government was preceded by the admfssion of Socialists to numerous local governments led by Christian Democrats.


Even though strains are likely to develop between now and parliament's recess on the program agreement seems to havo assured Andreotti's survival at leastnntil *all, at



Viewed from the Communists' perspective, the agreementengthy period of maneuvering almod at setting the precedent for more formal Communist involvement in national policyng. The Coimunists will now try to ensure:;

major government policies continue to be devisedformal interparty negotiations includingand -

--That enough of tht new agreement is implemented to convey an impression of progress or. Italy's worst problems.

The Communists are doubtless concerned that their image will suffer if Fanfani is right and tho agreement, like so many earlier government programs, turns out toere "wish book." That would run counter to the impression the Communists have sought to convey over the years that their participation in the governing process is essential tongful change in Italy.

. 3ut the dilemna (or the Christian Democrats appears more acute. Failure to translate much of the agreement into law would raise further doubts about the party's ability to deal effectivelyItaly's problems. On the other hand, the accord in its entirety would make it more difficult for the Christian Democrats to convince their traditional electorate that the party is not moving gradually toward a




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