ITALY SITUATION REPORT(DELETED)

Created: 7/15/1964

OCR scan of the original document, errors are possible

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NNIIUIOINCE AGENCY

Intelligence Information Cable

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NO LONGED TEE HEADHE DC DELEGATION AND HIS HAVING STEPPED ASIDE FOR DC PARTY SECRETARY MARIANO RUMOR HAS CAUSED CERTAIN STIFFENING OF THE DC POSITION. 2.

TEE START OF THE NEGOTIATIONS THE DOROTEJ. PARLIAMENTARIANS, AFTER CONSULTATION WITH PRESIDENT ANTONIO SEGNI, HAVE CHARGED RUMOR WITH THE RESPONSIBILITY OF KEEPING HORO FROM MAKING "DANGEROUS CONCESSIONS.'

THE SAME PARLIAMENTAR LANS EAVK THREATENED THAT, IF CONCESSIONS ARE MADE ON DC IDEOLOGY, THE PARTY WOULD WITNESS DEFECTIONS ON THE VOTE OF CONFIDENCE THAT WOULD MAKE SCELBA'S THREAT TO BOLT THE MBXS IK THE FALL3 3EEX AS NOTHING,

3. THE NEGOTIATORS SEEM TO HAVE REACHED AGREEMENT ON MEASURSS TC STRENGTHEN THE ECONOMY AND APPARENTLY NO ONE CITES THESE AS REASONS FOR INABILITY TOINAL ACCORD. THE GENERAL CONSENSUS IS THAT SCO&OMI" FLANKING, CITY PLANNING AND THE SCHOOL QUESTION FORM THE BONES OF CONTfKTTC. UNTIL MONDAY, IT APPEARED THAT IHE ITALIAN SOCIALIST PARTY (PSl) WOULD ACCEPT ENOUGH CHANGES TO THESE PROPOSALS TO ENABLE THE DCEET THE DEMANDS OF THEIR PARTY. THE SITUATION BECAME MORE RIGIDHE PSI DIRECTORATE MEETING OFJLY AT WHICH THEE MARTIKO HA IDR.'IN THE DIRECTORATE INCLUDED FRANCESCO D2, GIACOMOINI, AIJX) VENTURINI, REKATO COLOMBO, GIOVAfSI MCGCA, (CELLOATTEO MATTEOTT1,

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BERTOLDI, PIETBO LEZZI, GIU3T0 TOLLOY, LUC1AK0 PAOLICCHI, AND PAOLO VITTORELLI. OPPOSED WERE RICCARDO LOMBARDI, FERNANDO SANTI, GIORGIO VEROKESI, STLVANO VERZELLI, VTNCBNZO BALZAMO AND TULLIA CARETTOHI. TRISTARO CODIGNOLA {LOMBARDIANO) AND SALVATORE LAURICELLA (NENNIAHO) WERE ABSENT. THE FOURTEENTH OF JULY WAS SPENT IN DAY LONG EFFORTS OF THE FOUR PARTIES TO RECONCILE REMAINING DIFFERENCES. ESTIMATES OF THE CHANCES OF SUCCESS OF THEVARIED CONTINUALLY ALL DAY.

1*. THE MOST SIGNIFICANT LATE INFORMATION WAS RECEIVED

HE MORNING OFULY | VT THE THREE LAY PARTIESTOTALLY LINED UP AGAINST THE DC AS IT APPEARS PROM THE PRESS. HEINABILITY OF THE FSI TO COMPLYC DEMAND FOR AN EXPLICITPUT OFF THE REGIONS AND HE FEELS THAT THE DC IS BEING UNREASONABLEREGARD. ON OTHER ISSUES,PCCH SIDES HAVE DIFFER:

POINTS BUTCERTAINLY WERE NOT SUCH AS SHOULD CAUSE A

BREAKDOWN IN THE NEGOTIATIONS. THE REAL

BASICALLY THE LACX OF GOOD WILL ON THE PART OF THE DC AND THE FSI TOAGREEMENT. REFERRING TO THE DC DIRECTORATE MEETING SCHEDULED FOROFULY ANDURTHER FOUR PARTY MEETING SCHEDULED FORWAS HIS CONSIDERED OPINION THATIRACLE

CAN SAVE MCRO'S EFFORT NOW AND | J'KNOT BELIEVE IN MIRACLES.

I OR JULY NOT TOO OPTIMISTIC THAT AN AGREEMENT COULD BE REACHED. RE ALLUDED TO PRESSURE BEING

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GROUPS OPPOSED TO THE ClrrTXH LS^I) ON CERTAIN DC LEADENS TOTHE SOCIALISTS AGAINST THE WALL AND THUS PREVENT THE FORMATIONCENTER LEFT GOVERNMENT. THIS MAY. REFLECT ONLY

OVER WHAT APPEARS TOETERIORATION IN NEGOTIATIONS, BUT SHOULD NOT BE COMPLETELY DISCOUNTED.

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IMPASSEAUSED BY SEVERAL CIRCUhSTANCESDOROTEI DESIRE TO PRESS THE SOCIALIST" TOO HARD AND BY THE FACT THATLEFT WING (FOBZE WOVE) BELIEVE AND RAVE SAID THAI THERE HAVE BEENCOMPROMISES ON THE REFORM PROGRAM. THUS THE ITALIAN SOCIALISTPARTY (PSDI) AND THE ITALIAN REPUBLICAN PARTY (PRI) ANDPSI, SEEING THEMSELVES OUTFLANKED RY TIE DC LEFT WING, COULD NOT ACWHICH THE DC LEFT WING WILL NOT ACCEPT. r A

MODERATE REFORM PROGRAM, SAID THAT IF THE PSI WENT ALONG ON TOO MANY CQV-PROMISES ON TEE RE>TJRM PROGRAM, THE PSi LEADERSHIP WOULD EOT BE ABLE TO &RI^ ALONG ENOUGH OF THEIR BASE TO MAKE THE CENTERORKABLE FORMULA. FOR THIS ?EASO N, I Btt&RETTKD THEOOSITION.

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IS HOT CREATING THE CURRENT DIFFICULTIES BUI" I WiE WILL NOT ENTERDOROTEI REQUESTS ON THE

URBAN BILL HAVE REACHED THE POINT WHERE THEY, THE DOROTEI, WILL SOON ASK

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PEASANTS TO RETURN CURRENTLY ALLOCATED LAND SO THAT SPECULATORS CAN RESOLVE ECONOMIC DIFFICULTIES.

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PRESS CIRCLES THERE ARE REPORTS THAT PRESIDENT SEGNI CALLED IN ALL OF THE DC NEGOTIATORS SEPARATELY ON THE AFTERNOON OFULY TO MAKE SURE THAT NO ADDITIONAL DC CONCESSIONS WERE MADE.

SEGNI'S PRESSURE ON RUMOR AND

ON SENATOR SILVIO CAVA TO HOLD TEE LINE IN TODAY'S DIRECTORATE MEETINGEXPECTED TO BE LONG ANDTHE DCHOTEI

VIEWPOINT THAT IT MUST BE TEE PSI TO YIELD ON VARIOUS "CONFISCATORY" ASPECTS OF THE ECONOMIC PLANNING AND URBANIZATION ISSUES SINCE TEE DC WILL NOTARTY TO BASIC CHANGES IN THE STRUCTURE OF THE ITALIAN SOCIETY AND STATES THAT HE IS HOT OPTIMISTICUCCESSFUL OUTCOME OF TODAY'S MEETINGS.

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BLUNTLY THAT LEADERS OF THE CENTS ISMC FOPOLAHE

FACTION ARE UN INFORMED ON ESSENTIALS, BUT THAT THEY REMAIN AS FIERCE AS

EVER AGAINST THE CENTER LEFT AND ARE WILLING TO SUPPORT THE DOROTEI IF

CANREAK OVER /PROGRAM.TRADE

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THAT HE COULD hot BEE at the VOVZTT HOW THE OT3OTUTT0II8 COULD SET THROUGH THE DAT SUCCESSFULLY, but HE RELIEVED THAT DI THE BID THE FBI, out of fear fob .new ELECTIONS, WOULD have to COMB FURTHER THAU THE DCompromising ok THE PROGRAM.

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REMAINS A3 USUAL behind moro AND THE CENTER LETT. this is ALSO THE VIEWERY INFLUENT.AL member OF the IC PARTY CLOSE TO premier moro AND WHO REFLECTS ttORO'S VIEWS, WHO insists THAT MOW co ITT HUES to HE HACKED by THE VATICAN AND3 re TNG MAINTAINED THROUGH BISHOP PR* TO COSTA. OUR EXPERIENCEOULD LEADO ACCEPT DKLL'ACQUA '3 VIEWS AS EXPRESSED IS AMERICANEGRAMOFULY AS THE LATEST POSITION OF THE VATICAN, SINCI THERE is NO DOUBT THAT THE CHURCH WAfl TOUCHED TO THE (JUICK by THE SCHOOL issue AND IT IS PROBABLY NOT SANGUINE THAT TEE CENTER LEFT CAN RSTRJEYK fc'l DAMAGED POSITION.

IS. THE NEXT IMPORTANT BREAK IN THE NEWS SHOULD BE AT THE CLOSEDC DIRECTION MEETING. THE SITUATION REMAINS SO ITUID THATY THE RASHES? OT-

PERSONS ARE PREPARED TO MAKE CATKfiOPTCAl PREDICTIONSHE OUTCOME. Wl DO HAVE THEOWEVER, THAT THE OOHOTK ARE DEFINITELY SEEKING TO

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FORCE THE ISSUE. EITHER THE PSI WILL COMPROMISE FURTHER OR THERE WILL BE SO CENTER LEFT. IN THE HURLY BURLYLL DC GOVERNMENT, OR OF NEW ELECTIONS THAT WOULD FOLLOW, THEY APPARENTLY BELIEVE THAT THE DC CAN SUCCESSFULLY APPEAL TO THE VOTERSAVE-THE-COUNTRY ISSUE. THE PSI SITUATION IS EXTREMELY DELICATE. THE PARTY APPEARS TO HAVE GONE AS FAR AS ITS PRESENT FACTIONAL LINE-UP WILL SAFELY PERMIT AND STILL BAR NEW DEFECTIONS AND MEET STEPPED UP ATTACKS BY THE ITALIAN COMMUNIST PARTY (PCl) AND THE ITALIAN SOCIALIST PARTY OF PROLETARIAN UNITY (PSIUP). HOWEVER, THEPARTICULARLY THAT OF NEW ELECTIONS, LOOMSEARFUL SPECTRE, FIGHTING FROM THE POSITION OF FAILURE, THE PRESENT PSI LEADERSHIP WOULD BE SEVERLY DAMAGED AND LOSE VOTER APPEAL AS WELL. THE PSI HAS NO CHURCH ON WHICH IT CAN FALL BACK TO BAIL IT OUT. THE TEST OF NERVES BETWEEN THE PSI AND THE DC WILL CONTINUE RIGHT TO THE END AND TT MAY ONLY BE ATST MOMENT OR EVEN AFTER POST-NEGOTIATION ANALYSES HAVE BEEN OJMPLETED THAT OBSERVERS CAN DISCERN WHO YIELDED MOST. ALL THIS, IN OUR OPINION, POINTSOST PRECARIOUS GOVERNMENT EVEN IF THE CENTER LEFT IS FORMEDjA VIEW ALSO EXPRESSED BY VENERIO CATTANI OF THE PSI. WITH THIS IN MIND, THE PARTIES MIGHT DROP ITAD JOB ANDREATHER FOR THE SUMMER l'YONOCOLORE GOVERNMENT TO PUT THROUGH MEASURES FOR THE ECONOMIC CRISIS, WHILE SINOLB PARTIES GIRD THEMSELVESURTHER ROUND IH THE FALL.

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