Ext 6116/46(S) 'Secret Weekly Political Intelligence Summaries, nos 356-416, August 1946-November 1947' [‎326r] (665/978)

13
Government had been consulted by the
Bolivian Government, and had advised in
favour of resuming diplomatic relations,
the Spanish Government instructed their
Charge d’Affaires in London to thank His
Majesty’s Government for the part that
tb^' had played. The Charge d’Affaires
mS informed that His Majesty’s Govern
ment had not been consulted by the
Bolivian Government, and in any event
would not have advised a renewal of diplo
matic relations with Franco Spain. The
Charge d’Affaires was further requested to
make it plain to the Spanish Minister of
Foreign Affairs that belief in His
Majesty’s Government’s intervention in
this matter was but another example of the
pathetic inclination of the Madrid author
ities to hdd that His Majesty’s Govern
ment were not really opposed to General
Franco.
The First Assembly of the International
Civil Aviation Organisation met in
Montreal on the 6th May. In accordance
with the directive of the United Nations
General Assembly—which made its
approval of the draft relationship agree
ment (for specialised Agency An office of the East India Company and, later, of the British Raj, headed by an agent. status) con
ditional on action being taken to debar
Franco Spain from membership of
I.C.A.O.—the Assembly at its third
plenary session duly voted for Spain’s
exclusion, and the Spanish delegation
walked out. Thus, so long as General
Franco rules—not only is Spain ostracised
from all inter-Governmental bodies but she
finds herself increasingly excluded from
international technical conferences. The
action of the I.C.A.O, Assembly requires
ratification by two-thirds of the member
States. (See also under tc United
Nations.”)
ITALY
The resignation of Signor De Gasperi on
the 13th May (see Summary No. 392) was
precipitated by the grave economic situa
tion. Signor De Gasperi has been under
increasing criticism from both Left and
Right for the last three months, the Left
accusing him of being too pro-Anierican
and the Right and the Vatican accusing
him of having been too conciliatory to the
Communists. Since Signor De Gasperi s
return from the United States in January
there has been increasing evidence that he
had made up his own mind. In his view
the economic situation could only be saved
by the grant of a loan from the United
States, and the United States would be
unlikely to make such a loan unless the
Communists were jettisoned from the
Government. There are good grounds for
believing that his interpretation of the
intentions of the U.S. Government is the
correct one. The right wing of the
Christian Democrats (encouraged by
recent events in France) has complained of
Signor De Gasperi’s conciliatory attitude
to the Communists and Nenni Socialists.
He has undoubtedly been conciliatory, but
it is difficult to see how he could hope to
bring the economic situation under control
without their active assistance.
De Gasperi has failed to convince the
political world that the economic position
of the country must be the first considera
tion of the Government and that the Tri
partite government should devote its
primary attention to this question. His
tentative suggestions for widening the
Government on a national basis and of
calling in technical experts (who were
likely to be of right-wing sympathies) has
alarmed the left-wing parties, and thus
Signor Morandi’s statement on the attitude
of the Socialist Party (see Summary 392)
was the immediate cause of De Gasperi’s
resignation.
On the 13th May Signor De Gasperi
broadcast the speech on the economic situa
tion which he had intended to make in the
Constituent Assembly. After referring to
the immense deficit on the 1946-7 Budget
and to various plans for increasing the
revenue and decreasing expenditure in
1947-8, Signor De Gasperi came to the two
serious problems confronting any Govern
ment in Italy, that of price stability and of
increased production. He admitted that
his Government had not succeeded in
stabilising prices and the lira, reducing
consumption and imposing the necessary
discipline. The difficulties were political
and psychological and were due to lack of
organisation.
The last part of his speech explained the
dependence of the country’s very existence
on the power to obtain a foreign loan.
Signor Morandi, the Socialist Minister for
Industry and Commerce, had explained to
the Cabinet that most of the country’s
exports went to pay for essential food
stuffs, and that industrial and agricultural
reconstruction was severely hampered by
the shortage of raw materials, for which
they would be unable to pay now that
UNRRA relief was ending. Signor De
Gasperi indicated that it was no use being
afraid of economic planning, this had
already existed in connection with
UNRRA relief. Planning was essential if
foreign investments were to be secured; and
in addition non-essential consumption must
be reduced and prices kept stable. He
appealed for collaboration at a time of