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December 6, 1976 - Ford, Kissinger, Italian Prime Minister Andreotti
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1553573
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December 6, 1976 - Ford, Kissinger, Italian Prime Minister Andreotti
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Memoranda of Conversations (Nixon and Ford Administrations)
Ford Administration Memoranda of Conversations
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File scanned from the National Security Adviser's Memoranda of Conversation Collection at the Gerald R. Ford Presidential Library
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
SECRET/NODIS/XGDS
DECLASSIFIED
E.O. 12958, Sec. 3.5
MEMORANDUM OF CONVERSATION
NSC Memo, 11/24/98, State Dept. Guidelines (Sulser)
By KBH , NARA, Date 6/29/99
PARTICIPANTS:
President Ford
Giulio Andreotti, Prime Minister of Italy
Dr. Henry A. Kissinger, Secretary of State
Brent Scowcroft, Assistant to the President for
National Security Affairs
Mario Mondello, Director General, Ministry of
Foreign Affairs
Amb. John A. Volpe, U.S. Ambassador to Italy
Amb. Roberto Gaja, Italian Ambassador
DATE AND TIME: Monday, December 6, 1976
11:13 - 12:39 p.m.
PLACE:
The Oval Office
President: First of all, Mr. Prime Minister, let me report the warm
feeling that the American people have toward you and your people. We
are very pleased to have you here. Please give my regards to
President Leone.
Andreotti: Thank you very much, Mr. President. President Leone
asked me to convey his warm greeting. We would very much welcome
you in Italy. We honor not only the President, but Mrs. Ford also,
and we would like very much to offer you our hospitality.
President: We would like to do some traveling.
Let me congratulate you on the job you have been doing since
last summer. You have had some difficult problems to deal with and
you have done an outstanding job.
Andreotti: Thank you very much for your kind words. At the time we
are facing problems, but the Italian people are willing to do what is
necessary. Since we don't have a parliamentary majority, we must
work even harder to preserve democracy.
CLASSIFIED BY
BRENT SCOWCROFT
EXEMPT FROM DECRASSIFICATION
SECRET/NODIS/XGDS
SCHEDULE 07 ORDER 11652
IMPMPTION
CATEGORY
5 (b) (1,3)
AUTOMATICALLY DECLASSIFIED ON Imp. to det.
SECRET/NODIS/XGDS
2.
It is the most difficult time, because now the other democratic
parties would not cooperate. I even offered to give up premiership
for a coalition. They wouldn't join, and the only other option was to
hand the government to the Socialists and Communists. We are un-
willing to do that, so we formed a minority government. We put
together a program to deal both with foreign policy and the domestic
economic problems. The government now has the votes of the
Christian Democrats and the abstention of all others but two small
parties on the left and on the right.
As I mentioned before, on foreign policy we reaffirmed our
allegiance to NATO and the EC. On the other hand, the Communist
Party for the first time said that both of these institutions constituted
objective reality for Italy. It is the first time ever that they acknowledged
this. I am aware this is only a tactical expedience, but it is good to be
in a position to tell the Italian people we have been right over the years
and the others wrong.
Our objective is to get credentials with the people and present
the image that we can govern with skill and objectivity. I have been on
television refurbishing the image of the party. One think we have worked
hard on is combatting tax evasion and the misuse of government revenues.
We have increased revenues 48% in one year, which is real progress.
We have even submitted a special program to increase revenues by
another 34%, for a total of 75% for two years -- which was unimaginable
in our country. We also got legislation to jail people who are sending
currency out of the country. We have saved $1 billion through this.
We have also eliminated seven holidays and made them work days, five
religious and two secular. This represents a pattern of legislation
which has gotten broad acceptance in Parliament.
President: I am aware of your attempts to strengthen your participa-
tion in NATO. Do the Communists support that in the Parliament, or
how does that work?
Andreotti: What has happened is there are three pieces of legislation.
The Navy part has passed, with the Communists abstaining. The other
two (Army and Air Force) will also pass. The significant aspect is
that we are able to get the votes for these special programs.
I don't want to give the impression all is rosy or that we have an
easy life. Last September when our reserves were vanishing, I about
resigned. But now we have this program in and we hope to get IMF
SECRET/NODIS/XGDS
SECRET/NODIS/XGDS
3.
financing and a bit of help from our friends. It just may be that we can
get the necessary spirit in the people and acquiescence of the Parlia-
ment. But if unemployment goes up and our balance of payments
worsens, no IMF will be able to govern Italy. For every one percent
increase in the price of oil, it costs us 70 million. We don't know
how to cope with that.
I will also tell you about the EC meeting last week.
President: Let me tell you what we have done to convey our feelings
on the oil price. I have written letters to the King of Saudi Arabia, to
the Shah, and to the President of Venezuela. Secretary Kissinger has
communicated with the other OPEC governments. I have called in
selected OPEC Ambassadors. We have said it is not in the interest
of OPEC to have an increase which would put the economic pause into
a decline. It also would affect our ability to help the developing countries.
If there is a downturn, we won't be able to buy the oil in the amounts they
are talking about.
Have you communications with any OPEC nations? I know you
have closer relations with Iraq than we.
Andreotti: Italy, both by diplomatic representations to OPEC and at
the time of the Venezuelan visit, has expressed itself strongly on this.
At the EC meeting we urged a joint action on this, but it wasn't
possible. We pressed Libya (I can talk about their 10% purchase of
Fiat) but I fear that Iran and others will press for an increase and I am
worried. How do you see it?
President: I can't say there will not be one, despite our strong efforts,
but I would hope it would not be an extreme one. It just isn't possible
to forecast right now. What do you think?
Andreotti: Based on my conversations and reports, there is a fear of
a 10% increase. Other leaders -- especial Giscard -- think this much
is unacceptable for their countries. Others I am guessing -- like
Britain may not be unhappy at this because of the North Sea. Also
Holland which has gas. I was hoping the North South Conference could
work out, with the developing countries, a formula.
President: The United States is spending $30 billion a year for oil
imports. A 10% increase would take it to 35 billion. Any such increase
would adversely affect our coming out of the recession and moving to
SECRET/NODIS/XGDS
SECRET/NODIS/XGDS
4.
prosperity. If so, that would affect our ability to help the developing
countries. When is the North-South meeting?
Kissinger: It was planned for the 15th of December but it was post-
poned, both because the EC didn't have a position, we didn't want to tie
Carter's hands, and we didn't want it to serve as an excuse for raising
prices right after it.
Andreotti: What is delicate is their proposal for indexation. OPEC
says industrial imports are up and they need indexation to balance it
out. Maybe we should try some kind of formula of a different kind to
deal with it.
Kissinger: But they haven't proposed country-by-country indexation.
That would be clever, but they haven't asked.
President: What was your reaction to Perez's view?
Andreotti: Perez has a moderate position. For example, he went along
with a delay for some months for a study of how to deal with the
developing countries and other issues. This would give the United
States time to send some kind of signal. But Perez can't come out
against an increase. He thinks it is justified, though he will listen to
reason.
Kissinger: He will listen but it does no good.
Andreotti: We have made efforts with other countries, like Libya, to
promote Italian exports. It was not government, but private. Like
Fiat, which sold 10% to Libya to help its exports. Then if the price of
oil goes up, so would the price of our exports. But some countries,
like Iran, have undertaken development programs exceeding their
capability.
President: But somehow we have got to get the OPEC countries to
recognize the seriousness of the situation both in economic and
monetary terms.
Andreotti: There was unanimity against a price increase at the EC
me eting. What we lacked was the ability to do anything about it.
Some more than others -- like Great Britain -- who were not so
vociferous. Do you have any advice?
SECRET/NODIS/XGDS
SECRET/NODIS/XGDS
5.
President: We should all work on the OPEC countries. The increase
would have an adverse impact on OPEC itself and on the developing
world. We will continue our efforts. Henry, do you have any thoughts?
Kissinger: The best thing we can do is to maintain a common front.
No one should go off alone trying to get a special deal. The other
thing to do is conservation. Otherwise, unless we change the market
conditions, we will face this every six months. Those who reject a
common approach are being very unhelpful.
Andreotti: The talk at the EC was clear, but it just asserted a position
and didn't come out for a delay. It decided each country would approach
it bilaterally, which I am not sure is the best way to do it.
President: How are we coming with our joint energy committee?
That offers hope for your country.
Andreotti: With regard to new sources, nuclear aspects are coming
well. Many of the other sources are experimental only and will require
years of work. We, of course, want to continue to work cooperatively.
President: Nuclear energy has to make a big contribution to our energy
independence. On solar energy, though, it is two or three decades away
from any serious contribution, our people think.
Andreotti: Some other issues we will take up with Secretary Kissinger
and Secretary Simon. I would appeal for you to put in a good word with
Secretary Simon.
President: We do hope the IMF negotiations work out. Would you give
me an appraisal of how close you are?
Andreotti: All of the requirements of the IMF increased taxes, rates
on services (electricity, railroad), have been done. The IMF has also
asked us to reduce labor costs. We are consulting on that now and we
will get some reductions. But we have to step carefully about reducing
benefits for labor. The Fund doesn't necessarily understand that, though
Witteveen has been a government minister.
Volpe: The Prime Minister has put a scala mobile through in better
shape than anyone imagined. He is too modest.
Andreotti: What we did was for wage earners over about $5,000, we
froze wages for 18 months. The Fund wants us to do more. We may
be able to but it will have to be gradual.
SECRET/NODIS/XGDS
P/ andreoth
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DECLASSIFIED
FORD
E.O. 12959, SEC. 3.5
NSC MEMO, 11/24/96, STATE DEPT. GUIDELINES (Sulser)
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