Memorandum, State Department Summary of Telegrams

8 OFFICE OF THE SECRETARY OF STATE State Dept. 6, 1982 E.O. WASHINGTON By. DEB NLT, Date 7-26-85 May 15) 952 SECRET SECURITY INFORATION SUMMARY OF TELEGRAMS TRIESTE Deputy Foreign Minister Vlahovic handed Ambassador Allen an aide-memoire yesterday expressing the views of the Yugoslav Government on the recently concluded talks on Trieste and the subsequent memorandum which announced that the Italians would be given a considerable hand in the administration of Zone A of Trieste. In handing Allen the aide-memoire (which has now been published) Vlahovic added a number of oral comments, speaking from prepared notes. He said that a detailed examination of the London memorandum revealed that the agreement was a more serious concession to Italy than at first appeared. It provided in effect for the transfer of Zone A administration to Italy even though the Allied Military Government retained the formal power. A real union would be created between Zone A and Italy and there- - fore the gap between Zones A and B would be deepened. He added that the new agreement favors Italians over local Triestines of either Italian or Yugoslav origin, opens the door to even further concessions, and gives Italy a monopoly of over the Zone A economy even though Yugoslav economic interests there were specifically recognized by the Italian peace treaty. Vlahovic said that Yugoslavia would announce in a few days corresponding measures to be introduced into Zone B, but that they would not go beyond the London agreement on Zone A and would in no way affect the legal status of Zone B. He said the new measures would in- - clude: 1) the appointment of three political advisors: a federal advisor to the military governor of Zone B, a Slovene advisor for Capodistria, and a Croat advisor for Buie; 2) establishment of a branch of the National Bank of Yugoslavia in Zone B; and 3) a reduction of the circulation barriers between Zone B and Yugoslavia. Ambassador Allen comments that it was evident Vlahovic had instructions to make his representations firm and serious, and there is no doubt that the Yugoslavs are much disturbed by the London accord. Allen feels, however, that the Yugoslavs are not primarily con- cerned over the fate of Zone A but by the interpretation which de Gasperi and other Italian leaders, notably Mayor Bartoli of Trieste, are placing on the agreement as a spring-board - for further moves. He says that if we could give the Yugoslavs the assurance that we would not countenance SECRET SECURITY INF ORMA TION-