Created: 3/21/1977

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77- /cos19

Prime Ministerrospects for Survival*

Minister Andreottl ia bound to corae under increasing domestic pressure between now and early summer. The pressure will arise partly from immediate issues, such as the economic decree laws that are now before parliament! and partly from misgivings in many quarters over basic trends in Italian politics. Because many of the old rules no longer seem to apply, prediction is unusually risky; still, we believe that the factors working for Andreottl's continuation in office through the summer will prove stronger than those working for his removal.

The immediate threat to Andreottl comesogjam of contentious legislation, some of which is intended to meet conditions the government accepted last week in0 million credit with tho IMF. To combat inflation, for example, the government hasecree law which limits certain labor costs and insulates the wage escalator from the effects of proposed tax increases. Organized labor is strongly opposed to the decree, which must win parliamentary approval byo remain in effect, and the Communists have warned that it will not pass in its present form. Andreottl is discussing these matters this week with the various political parties and labor, and while political tensions are runningo estimate that hawillompromise acceptable to tho government and

its critics.

the specific issues, Andreotti's mainlies in the misgivings harbored by bothand ConimunistB over the cooperative relationship

"ThisIA assessment, with the DDI, DDO, and NIO/WE concurring.


of substantial. uicHJUiitenc

the cxistenco xii umruuuuixai inniiJ overendency to compromise with Andreottl. Disgruntled CocTonunists fear that the party will weaken its base of support in tho working class and lose its imageorce for change. On the other hand, many Christian Democrats grumble that Andreottl tends to back down in the face of Communist pressure-particularly on economic issues. arty rivals fear that he is drifting toward the "historic compromise" advocated by Communist chief Berlinguer.

The snallor parties supporting Andreottl also worry about his dependence on the Communists. They fear that the longer it persists, the harder it will be for the minor parties toignificant role. These parties have limited leverage, however, and the only one that could stir upSocialistin such internal dis-saray that it seoms to be paralyzed politically. The Socialists are deeply divideduture course of action and probably terrorized by thef another early election, given their poor performance in the last one.

Any destabilizing maneuvers are thus likely to come from within the Christian Democatic or communist parties. Politicians taking aim at Andreottl, however, will have to weigh the followinghich comprise Andreottl's main strengths:

conditions have not yet emergedovernment less dependont on the Communists. The Socialist cooperation that would be necessaryove away from the Communists is not likely to materialize during the next few months i

--Nor are the conditions presentormalrole in the government. Aware of the divisions among Christian Democrats, the Communist leadership would probably prefer to continue anglingore direct voice in policy making rather than pushormal governing roleabinet crisis. Reporting from clandestine sources sugg&sts that tho Communist rank and file is not necessarily pushing the leadership to bring Andreottl down but rather urging it to be more critical of how the goverrcnont tackles specific problems j


government crisis ln present circumstances would probably trigger another run on the lira and another round of capital flight. No one wants to accept responsibility for the ensuing repercussions on tho austerity program or the blame for interrupting work on complementary policies such as industrial

Thus, the most that anyone'could hope to achieve by bringing tho government down in the near terra wouldariation of the Andreottl formula or an early election. Even allowing forbition, most political leaders would probablylight change in the Andreottl formula as hardly worth the effort or the price that would have to be paid, in economic terms alone,overnment crisis.

o some in the Christian Democratic Party who favor an election, in the belief that the Communists' support may have weakened in the last year. Any push for

an election now, however, would have to overcome theof all the other parties. And those who favor an election would have to face the likelihood that mostCornjnunist supporters in tho end would probably stick with theiven the absence of more appealing alternatives on the left. Thus, an election would probably further polarize the voters between the two major parties, making it even more difficult for either toorkable government. Moreover, those who favor an election this summer would have torisis soon. In order to carry out the necessary preparations for an election in June, for example, parliament would have to be dissolved by mid-May at the latest.

some influential politicians are snipingothers are casting about for ways of easingon him and extending his tenure. One ideagained some favorabinet shufflo aimed ata larger number of technocrats, chosen in part forto the left. The Communists andcommented favorably on the idea, andIt anoted that such aoffer more programmatic "guarantees" to theSocialists.would insist rnat ivmirmjnt. cmiwiwln the eventabinet shuffle.

9. hange would likely be accompanied by pressure frcm tho Corsrunists and Socialistsore extensive programmatic agreement between the government and, the political parties that have permitted Andreottl to survive so far. The Communists hope that agreementroader program would permit them to move from their present position of abstention to become partarliamentary majority voting in favor of the government. This would be difficult to achieveovernment crisis, but we believe the Communists would stop short of provoking one in pushing forhange.

On balance, therefore, our assessment is that while there will bo increased skirmishing between the Communists and Christian Democrats in the cominghe prevailing tendency in both parties will be to step back from the brink'and seek some sort of compromise. Thus, wo expect that, barring some unforeseen dramatic new development, Andreottl will probably survive until July when the traditional surrtmar lull would likely serve to tide him over until fall. Beyond that time, any prediction would be hazardous in tho extreme,ew assessment of the situation will be required.

Andreottl's chances for surviving would, of courso, be increased if ho were invited to make an official visit to the US. Ifisit wore announcedt would help him with his current parliamentary difficulties as well as his political challenges. Some Christian Democrats who view Andreottl as too conciliatory toward the Communists might speculate that the visitS endorsement of his approach; others would surmise that the US had invited him to stiffen his resistence to the Communists.

In any event, the principal political effectS visit at this time would be to give pause to Andreottl'a Christian Domocratlc rivals, ali of whom would want to bo sure of US support in tho uncertain period that would follow acrisis. For their part, the Communists would pose no objections toisit, provided it had no overt anti-Comn:unist overtones.

12. ecision not to invite Andreottl, if it became known, would hurt him to some oxtent. Invidious contrasts might be made botweenecision and tho forthcoming


unofficial visit to the US of two Italian Communistas partelegation from the Western European Union. But we doubt that the damage would be critical or lasting, unless there were further US moves pointinghange in US policy toward the Communists.

Original document.

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