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SECRET pendence upon the US for economic aid and concessions. It also leans upon the US for protection against Yugoslav and Soviet demands and potential threats. Italy, with active US sponsorship, has applied for membership in the UN in order (1) to rejoin the official family of nations, (2) to secure the advantages accruing from participation in the various international organizations, (3) to assure itself protection against strong ex- ternal pressure or invasion, and (4) to work legally for a revision of "punitive" peace terms. Italy has already resumed diplomatic relations with the various major and many minor powers of the world. It had commercial and trade agreements in 1947 with various countries of Europe including UK, France, Belgium, Luxembourg, Poland, Aus- tria, Czechoslovakia, Yugoslavia, Hungary, the various zones of occupation in Germany, Norway, Netherlands, Spain, Sweden, Denmark, and Greece (See Section II - Foreign Trade). Negotiations for a trade agreement with the USSR have not been successful to date. Emphasis has also been laid on resumption of friendly and commercial re- lations with Latin American countries; agreements with Argentina and Venezuela make special provision for immigration of Italian workers. A special treaty of friend- ship was signed with the Philippine Republic 1 July 1947. It is anticipated that the US and Italy will soon sign a special treaty of commerce, navigation, and friendship.* In the important field of civil aviation Italy's application for membership in the International Civil Aviation Organization on 16 May 1947 awaits now only official approval by the UN General Assembly. Following the end of the war both the US and UK made working agreements with internal Italian air lines. This limited activity was considerably broadened in the summer of 1947 when the US and UK approved Italy's entrance into operations of international civil air lines. Following the effective date of the peace treaty (15 September 1947) Italy as a sovereign nation is in a position to negotiate bilateral air agreements with other countries. In this connection Italy effected a provisional civil air agreement with Rumania during the summer of 1947. But Italy may terminate this arrangement at any moment, in conformity with the US and UK decision to refrain from any bilateral air agreements with the USSR and the satellite countries. The most significant step taken by postwar Italy relates to its economic rehabili- tation. To this end it promptly accepted on 17 June 1947 the US invitation to partici- pate in a European Recovery Program, in the face of Soviet refusal and violent condem- nation of the proposal, and also despite Italian Communist opposition. Italy's prestige has risen with its selection as a member of the five-nation key executive committee at the Paris Conference for European Economic Cooperation during July to September 1947. 2. THE PEACE TREATY. During the treaty negotiations in London and Paris, Italy fought against what it regarded as a punitive peace, contending that the Allies had promised to mitigate the peace in recognition of Italy's contribution to the war against Germany. The final * Signed 2 February 1948. SECRET III-2

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    "ocrText": "SECRET\npendence upon the US for economic aid and concessions. It also leans upon the US\nfor protection against Yugoslav and Soviet demands and potential threats. Italy, with\nactive US sponsorship, has applied for membership in the UN in order (1) to rejoin the\nofficial family of nations, (2) to secure the advantages accruing from participation in the\nvarious international organizations, (3) to assure itself protection against strong ex-\nternal pressure or invasion, and (4) to work legally for a revision of \"punitive\" peace\nterms.\nItaly has already resumed diplomatic relations with the various major and many\nminor powers of the world. It had commercial and trade agreements in 1947 with\nvarious countries of Europe including UK, France, Belgium, Luxembourg, Poland, Aus-\ntria, Czechoslovakia, Yugoslavia, Hungary, the various zones of occupation in Germany,\nNorway, Netherlands, Spain, Sweden, Denmark, and Greece (See Section II - Foreign\nTrade). Negotiations for a trade agreement with the USSR have not been successful\nto date. Emphasis has also been laid on resumption of friendly and commercial re-\nlations with Latin American countries; agreements with Argentina and Venezuela\nmake special provision for immigration of Italian workers. A special treaty of friend-\nship was signed with the Philippine Republic 1 July 1947. It is anticipated that the\nUS and Italy will soon sign a special treaty of commerce, navigation, and friendship.*\nIn the important field of civil aviation Italy's application for membership in the\nInternational Civil Aviation Organization on 16 May 1947 awaits now only official\napproval by the UN General Assembly. Following the end of the war both the US and\nUK made working agreements with internal Italian air lines. This limited activity\nwas considerably broadened in the summer of 1947 when the US and UK approved\nItaly's entrance into operations of international civil air lines. Following the effective\ndate of the peace treaty (15 September 1947) Italy as a sovereign nation is in a position\nto negotiate bilateral air agreements with other countries. In this connection Italy\neffected a provisional civil air agreement with Rumania during the summer of 1947.\nBut Italy may terminate this arrangement at any moment, in conformity with the\nUS and UK decision to refrain from any bilateral air agreements with the USSR and\nthe satellite countries.\nThe most significant step taken by postwar Italy relates to its economic rehabili-\ntation. To this end it promptly accepted on 17 June 1947 the US invitation to partici-\npate in a European Recovery Program, in the face of Soviet refusal and violent condem-\nnation of the proposal, and also despite Italian Communist opposition. Italy's prestige\nhas risen with its selection as a member of the five-nation key executive committee at\nthe Paris Conference for European Economic Cooperation during July to September\n1947.\n2. THE PEACE TREATY.\nDuring the treaty negotiations in London and Paris, Italy fought against what it\nregarded as a punitive peace, contending that the Allies had promised to mitigate the\npeace in recognition of Italy's contribution to the war against Germany. The final\n*\nSigned 2 February 1948.\nSECRET\nIII-2"
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