D. Basosi, G. Bernardini: The Puerto Rico Summit of 1976 and the End of Eurocommunism, pp.

256-267

Pubblicato nel volume:

L. Nuti (ed.), The Crisis of Dtente in Europe. From Helsinki to Gorbachev, 1975-1985, London: Routledge,
2009, pp. 256-267, ISBN 978-0-415-46051-4

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19 The Puerto Rico summit of 1976

and the end of Eurocommunism

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Duccio Basosi and Giovanni Bernardini1

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In recent years, historians have cast new light on the international strategies
pursued by the Italian Communist Party (PCI) under the leadership of Secretary
General Enrico Berlinguer, particularly in the period between 1973 and 1979. In
those years, intense activism on the international scene brought the party leadership to tighten relations with the French and Spanish communist parties, and
eventually to develop the idea of a form of communism respectful of political
liberties at home and supportive of the demands for a New International Economic Order (NIEO) put forth by Third World governments and liberation
movements. This complex movement was soon given the name Eurocommunism, a neologism coined by the press and eventually accepted by the PCI itself,
that highlighted both its distinction from the monolithic Soviet model and the
European flavor of the endeavor, which also encompassed a new relationship
with the continents socialist and social-democratic movements.2
A political shooting star around 197475, Eurocommunism quickly raised
notable interest and concern in Italy, Western Europe and in the rest of the world
especially in United States and in the Soviet Union. By the end of the decade it
was then forgotten just as quickly. Recent analyses have highlighted the appeal
of the PCIs far-reaching diplomatic moves as the main reason for the early
interest in Eurocommunism, but also dismissed Berlinguers goals as unfeasible
and destined to fail. They ascribe this failure to the PCIs ultimate inability to
rescind all its links with the Soviet Union and accept social-democratization.3
While these interpretations do raise a set of important issues, it is our impression
that Eurocommunisms steep parabola simply paralleled the rise and fall of the
PCIs electoral performance. In turn, the partys electoral decline at the end of
the decade appears more due to positions actually taken by its leadership in the
Italian context during the crucial period 197678, rather than to philosophical
disputes about the possibility of finding the desired third way between Soviet
communism and Western European social democracy. This does not imply that
international factors did not play their part. However, they took a path that did
not replay the traditional Cold War scenarios. Based on extensive research in
US, West German and Italian archives, this chapter argues that Eurocommunism, born in connection with the economic crisis of the early 1970s and the
transatlantic disputes that it generated, began to decline as the PCIs leadership

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failed to understand the implications of the closing of the transatlantic rift at the
end of 1975 and the changed model of capitalism produced by the newly found
transatlantic unity.
In the first section we analyze the rise of Eurocommunism in the context of
the transatlantic rift, where we also highlight some underlying weaknesses in the
PCIs international assumptions. However, a discussion on this subject cannot
be separated from an assessment of the partys domestic strategy in the Eurocommunism years, which aimed at achieving full legitimization in the Italian
political system by obtaining government positions by externally supporting
(and not opposing) its longstanding adversary, the Christian Democratic Party
(DC). This subject is covered in the second section. The third section analyzes
what might be called the defining moment, that is when the PCI leadership failed
to grasp fully the outcome of the Puerto Rico G7 Summit in June 1976, just days
after the party had reached its electoral peak in Italian political elections. In
Puerto Rico, the heads of government of the most industrialized Western
nations, including Italian Prime Minister Aldo Moro, did not simply reiterate
their hostility toward the PCI, but also endorsed a major break with the tenets of
the post-World War II Keynesian economic consensus. Failing to understand
this change, the PCI invested all its strength in the attempt to be recognized
domestically and internationally as a responsible force. While this desired
legitimization was never fully attained, in 1977 this endeavor caused the party to
become the co-sponsor of a painful program of economic adjustment undertaken
by the Christian Democratic Italian government and which badly hit the Italian
political lefts own constituency. As fascinating as talking about Eurocommunism might have been, the PCIs electoral gains were not translated into concrete redistributive measures. As we briefly discuss in our conclusion, in the late
1970s and early 1980s, given the general re-configuration of international relations that had accompanied the end of superpower dtente and the shift toward
new economic paradigms, there would be no second chance for the PCI.4

Eurocommunisms strengths and weaknesses in the

international context

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Eurocommunism was never a program defined point-by-point, but was rather a

set of values and general propositions that, fascinating some and scaring others,
achieved credibility both on the basis of the PCIs electoral gains and, by reaching outside brotherly ties with other members of the communist family, the
network of contacts that the party was establishing in Europe. It goes without
saying that these two aspects were mutually reinforcing. Commenting on a
rigidly anti-communist interview given to Time magazine by the DC leader
Amintore Fanfani, Berlinguer replied in an article published 29 May 1975 in the
partys newspaper LUnit that Italy should stop being the wretched client of
the United States, always in search of political and economic support. The
country should instead take into account the new European reality, and
participate in the construction of Western Europe as a political subject

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autonomous from the US and the Soviet Union alike. According to the PCI
Secretary General, the US-driven collapse of the Bretton Woods economic
system in 1971, clashes over monetary policy in the following years, European
rejection of the US-led Year of Europe initiative in 1973, the autonomous
posture during the Middle-East and energy crises at the end of the same year,
and finally, the progress of dtente, soon to be crowned in the Helsinki Final
Act, were all symptoms of a changing transatlantic relationship that the PCI
needed to accompany with the slogan of neither an anti-US, nor an anti-Soviet
Europe.5
In a public speech in Livorno in July 1975, Berlinguer, together with the
Spanish communist leader Santiago Carrillo, strongly emphasized the goal of
building socialism in democracy and political freedom. Two terms of reference
provided the geopolitical context: Western Europe, which was called on to innovate its economic practices at a time of deep capitalist crisis, and the Third
World, whose vibrant reality was presented as the major factor in global
change in recent decades.6
While this analysis was fascinating to many, its credibility derived from the
set of electoral advances that the PCI had been able to achieve in the early 1970s
by choosing to side with the numerous and strong social movements in Italian
society. The partys electoral performance rose from 26.9 per cent in the 1968
parliamentary elections to 33.4 per cent in the 1975 administrative elections.
International and national levels were intertwined from the very beginning. Even
a hard-line anticommunist like, US Ambassador to Italy, John Volpe admitted
that:

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The Communist Party has no difficulty in maintaining a high level of

discipline, probity, and responsibility to the community. Local administrations in the red belt are models of efficiency and honesty compared to the
average elsewhere in Italy. Unwise patronage, corruption, and connections
with undesirable sources of support have been generally avoided by communists. At the same time, over the years the PCIs connection with the
Soviet Union has been downplayed, cast in doubt by bona fide public differences between the PCI and the Soviet party.7

Despite some hopes held by the PCI leadership, this did not imply that the
United States would drop its long-standing opposition to the partys coming to
power in Italy.8 In the US, President Gerald Ford simply resorted to the traditional argument that communists desired the end of NATO and of Atlantic
security in general, and that the West should never allow either Moscow or the
internal [communist] forces to even get close to this.9 Thus, a practical problem
stood in the way of Eurocommunism to the extent that the US government was
able to influence the Italian political system, even in a destabilizing way.
Notwithstanding his confirmed willingness to overcome Europes division into
two blocks, Berlinguer believed that to allay the US governments fears by professing loyalty to NATO would help the PCIs drive toward government

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responsibilities in Italy. This was largely illusory. As US Secretary of State

Henry Kissinger told then-Prime Minister Aldo Moro in August 1975, he simply
didnt care if [Berlinguer signed] on to NATO in blood: an alliance that had
been built to fight communism would lose all reason to exist if communists were
ever allowed to enter the government of one of its members, even within a broad
coalition.11
Berlinguers pledges to NATO did not convince Washington, nor did they
suffice to move the most important single player in European social democracy.
The West German Social Democratic Party (SPD) was then leading the government of the third largest economy in the world, and the only European country
that had overcome the economic crisis of the early 1970s with relative success.
German observers, in fact, reached the same conclusion as their American colleagues: with all its shortcomings, the only viable interlocutor in Italy, at least in
the short run, was the DC (the Italian Socialist Party was at its historical low,
around 10 percent, and lacerated by internal rivalries among its leaders).12 While
a certain degree of interest in the evolution of the PCI could be found in the
SPDs left wing (including the party chairman, former chancellor Willy Brandt),
the current party leadership, led by Chancellor Helmut Schmidt himself,
adamantly disliked the PCI.13 The German Chancellors apprehension about the
rising popularity of the Eurocommunist project can be measured by his reaction
to the conference of the communist parties of Europe, held in East Berlin in June
1976, where even the international conservative press had praised Berlinguers
speech and open criticism of Moscow. As far as Berlinguer was concerned,
Schmidt conceded that the PCIs Secretary General probably really thought
what he was saying, but this was not enough to overcome his mistrust.14
The PCI did develop fruitful exchanges with some European socialist and
social democratic forces, as witnessed by the intense debates that occurred
within the Socialist International.15 But the PCIs main interlocutors were either
out of power (as in the case of the French Socialist Party) or in charge in geopolitical and economic light weights (the Scandinavian social democrats).16 In
brief, while the economic challenges of the early 1970s had largely torn the US
and the Europeans apart, there was little on either side of the Atlantic to justify
Berlinguers hopes for a less stringent exclusion of his party from European
mainstream politics, at least in the short run.

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10

Eurocommunism, the compromesso storico and national

unity
As the PCI promised a renewal of the Italian political system and redistribution
of wealth in Italian society (including some interesting hints of ecological thinking), Eurocommunism raised a great deal of interest, domestically and internationally.17 In 1975, in the context of a free-falling lira and of a precarious
balance of payments, the DC and its minor allies seemed unable to agree on
solutions for skyrocketing inflation coupled with rising unemployment. When
new elections were called in 1976 the PCIs chances seemed to improve.18

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Even according to hostile analyses, the PCIs program left little room for
populism in 1976.19 In fact, the partys platform was not closed to antiinflationary measures, although it seemed strongly intentioned to trade those
concessions for much more structural gains. The PCI made little mystery of the
fact that its program aimed at privileging social over private consumption
and the democratic planning of production over production per se. These were
two features that were supposed to introduce elements of socialism into the
Italian context, and that could be regarded, together with support for antiimperialist struggles in the Third World, as two basic tenets of the Eurocommunist project.20
On 20 June 1976, the PCI reached its all time electoral high, obtaining 34.4
percent in the popular vote, only four points behind the DC. Although not
enough to govern, in the fragmented context of the Italian political system the
PCIs numbers were sufficient to make life difficult for those that chose to
govern without it. The PCI did not do this. Starting July 1976, the PCI began to
abstain in confidence votes on the DC-only government led by Giulio Andreotti,
the DCs leading exponent of its most radical anti-communist tendencies.
As correctly highlighted by several commentators, Eurocommunism cannot
be thought of outside the context of the compromesso storico, which was the
PCIs strategy to establish a close dialogue with the catholic forces in Italian
society.21 It is questionable, however, whether the moves actually made by the
party leadership were the most effective translation of that aspiration.22
Berlinguers intention was to enhance the perception of the party as a responsible force. In more practical terms, in exchange for not voting against the
Andreotti government, the PCI obtained the presidency of the Chamber of
Deputies and the chairmanship of several parliamentary committees. But the
ultimate effect of the partys decision was to deprive it of any real leverage to
change the balance of the Italian political system. Instead, the opposite occurred:
while in opposition in 1974 and 1975, the PCI had achieved virtual veto power
over all important decisions and, as underscored even by US government
observers, were often able to consolidate material gains for the lower classes in
the Italian society.23 Rather than allowing the party a greater say in the governments actions, abstaining in confidence votes tied the party to the same
mechanisms of Italian politics that it sought to change. While internal divisions
began to undermine the partys ability to respond coherently to the challenge,
the original caveats that accompanied their acceptance in principle of antiinflation programs were often overruled in practice by the actual measures
approved from 1976 to 1978 in the name of a relatively unconditional austerity.24 This was indeed praised by part of the Italian political establishment in the
form of a greater, albeit never full, legitimization, but came at very high price in
terms of the partys own electorate.25 In the spring of 1978, after 18 months of
few gains by the PCI, the left-wing armed group, the Red Brigade, kidnapped
and later assassinated Aldo Moro, then chairman of the DC. In reaction, the PCI
decided to step-up its post-1976 approach by unilaterally supporting a new DConly government in the name of national unity, led once again by Andreotti.

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By the time new political elections were held in 1979, the PCI had slid back to
30.4 percent of the popular vote.26

The PCIs shortcomings in a fast-changing environment

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The events of the 1970s indeed demonstrated some continuity with the traditional patterns of post-World War II Italian politics, namely the protracted centrality of the DC and incomplete acceptance of the PCI as an equal member in
the Italian political system. Outside the microcosm of Italian domestic politics,
however, the world was undergoing huge changes. While in the first half of the
1970s Berlinguer had been keen on the analysis of such global trends, especially
those concerning the USEuropean relationship, in the second half of the decade
he and his closest advisors displayed a certain unpreparedness in facing the consequences of changing international equilibriums, which directly affected Italy
as well.
The PCIs decision in 1976 to abstain from opposing the Andreotti government came six months after the first summit of the heads of government of the
most industrialized Western countries, held in Rambouillet in November 1975.
This was just days after the conclusion of the first G7 summit, held in Puerto
Rico, 2728 June 1976. The conclusions reached in those two summits challenged the most basic assumptions of Berlinguers strategy. In fact, whereas
Rambouillet marked European acceptance of the global dollar standard and
floating exchange rates, under renewed US leadership the Puerto Rico summit
definitely brought to a close years of upheaval in transatlantic relations.27 Furthermore, in substance, US hegemony marked a definite push away from the
embedded liberalism of the post-World War II years, toward deregulated forms
of capitalism, accompanied ideologically by the theories of the Chicago School
of Economics.28 The final communiqu at Puerto Rico indicated clearly enough
that the leaders of the western nations chose to go along with, rather than oppose
or deflect, the structural trends in the international economy, such as privatization and deregulation of capital flows. Their stated objective was enlarging the
pie rather than redistributing it, which meant a reversal from the construction of
welfare states to the fight against inflation in domestic policies, and, on the international plane, closure to Third World demands for a NIEO.29 Regardless of
their left or right orientations, the European governments at the summit agreed
with these principles, including conservative French President Giscard dEstaing
and the British Labor Prime Minister Jim Callaghan. And so did Aldo Moro.
Even more importantly, the German social democrat Helmut Schmidt actually
played a leading role in pushing for monetarist and laissez-faire solutions internationally.30
Thus, the PCI chose not to oppose Andreottis government in a context in
which nothing indicated that there would be changes in the economic practices
of Western Europe in the sense desired by the party. Rather the opposite. Furthermore, if the general picture sketched by the Puerto Rico summit was not sufficiently clear, the PCI should have heard a much closer alarm bell go off,

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which, in fact, went totally unheard. In those months the Italian government was
requesting new external financing to support its weak balance of payments. One
of the summits decisions gave a green light to the International Monetary Fund
(IMF) to test, in Italy, a new lending procedure devised for developed countries
in special need [and] preconditioned on special corrective programs to insure a
return of sound economic equilibrium.31
As far as the clauses conditioning the loan were concerned, the PCI was,
from two points of view, a target of the Puerto Rico summit and, later, of the
actual IMF loan. In the wake of the PCIs electoral advances, the first was an
actual ultimatum that accompanied the discussion about the Italian loan: Italy
would not receive any economic aid if communist influence on the government
were strengthened. While the US had already aired this idea both privately and
publicly, in Puerto Rico the actual proposal of linking the communist question
and the financial assistance program came from Helmut Schmidt.32 Two weeks
later, the Chancellor himself revealed that the Italian situation had been discussed during the Puerto Rico summit in a restricted meeting of the US, West
German, British and French delegations and that communist non-accession to
the Italian government was the basic precondition for providing the financial aid.
The PCI could count on the solidarity of many in the European left, but, once
again, the actual decisions were made elsewhere.33
Much more important than the anti-PCI clause, however, was the fact that the
Italian loan was the first in the IMFs history to include heavy structural conditions. To a certain extent, it represented the forerunner of the much more burdensome structural adjustment loans to Third World countries in the 1980s.
The loans goal was not only to provide liquidity to a country in need, but also,
by external constraints, to change the structure of that countrys domestic
economy. Beginning with the Italian case, the word conditionality made its
appearance on the world financial stage, while the post-Bretton Woods role of
the IMF was re-designed according to the emerging conservative consensus. US
Undersecretary of the Treasury for Monetary Affairs Edwin H. Yeo explained to
President Ford that the IMF was the best institutional arrangement for producing
conditional financing. It did not involve Congress, did not impact the US budget
and cloaked the conditionality in a multinational mantle that diluted opposition
within a borrowing country to conditions imposed by the US or other
outsiders.34
Transmission of Washingtons agenda to the IMF through the G7 framed the
mechanisms that would later be called the Washington consensus.35 At the
same time, Chancellor Schmidt indicated the role that the IMF would frequently
come to play in the following years: the IMF should act before other potential
lenders and serve as a term of reference on the reliability of loan recipients. In
fact, the negotiations with the Italians were conducted under the continuous
guidance of technicians from the United States and the FRG.36 The targets of the
proposed structural adjustment were the scala mobile (the wage indexation
system) and public sector expenditures, two assets of great importance to the

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PCIs electorate. The numerous Italian fans of the conservative modernization

of the country had found a credible external constraint to implement unpopular
policies, a game in which Andreotti was actively involved.37 The paradox is that
they were able to attain their desired results with the compliance of the PCI.38

Concluding remarks

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In January 1977, Democrat Jimmy Carter took over the US presidency. The new
president repeatedly declared that he would not interfere in Italian domestic
affairs.39 In this context, some PCI officials cherished hopes that some form of
official recognition might finally come from the US government.40 These would
be frustrated in early 1978, when US uneasiness with communist participation in
the Italian government was restated clearly on the traditional K factor basis.41
In the meantime, the party did little to address the demands for social justice that
had been at the root of its earlier success. In particular, the acquiescent attitude
taken by the party leadership on the IMF clauses definitely collided with their
previous accusation that the DC was the wretched client of the US. Although
the scala mobile was not abolished, the final agreement that the Italian authorities eventually reached with the IMF in April 1977 did take several steps to
reduce its coverage. Furthermore, the agreement included tight ceilings for
public sector expenditures and extremely detailed provisions for bringing down
inflation, beginning with wages.42 Nor did the PCIs influence grow when it
opted to unilaterally support the DC-only government of national unity. If anything, by that time, the political agenda had been completely subverted by the
Moro assassination.
Carters international economic footprint was not as marked, nor as ideologically driven as that of his White House predecessor Gerald Ford and, obviously,
his successor Ronald Reagan. Nevertheless, during his presidency, new and fundamental steps were made toward consolidation of the conservative turn in international economic policymaking. Not only was the drive toward capital flows
deregulation confirmed, beginning with the London G7 summit in 1977, but
economic monetarism also was embraced in October 1979, when the Federal
Reserve drastically increased US interest rates, thus opening an entirely new era
in international economic relations.43 When, in the same year, the PCI finally
realized that few gains had been obtained in the preceding three years (both in
terms of material results and in terms of the long desired legitimization), it
returned to opposition. Eurocommunism was not formally abandoned, but Italy
and the West had changed dramatically since 1973, and the PCI would never
again be able to turn the tide.

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Notes
1 The authors share in all the analyses and conclusions of this chapter and equally contributed to writing it. They wish to thank Dr Thomas Blanton and Dr William Burr of
the National Security Archives for their comments on an unpublished version of the
text.

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2 Among recent works on Eurocommunism, see: F. Lussana, Il confronto con le

socialdemocrazie e la ricerca di un nuovo socialismo nellultimo Berlinguer, Studi
Storici, no. 2, 2004, pp. 46188; S. Pons, Berlinguer e la fine del comunismo, Torino:
Einaudi, 2006; I. Wall, Lamministrazione Carter e leurocomunismo, Ricerche di
Storia Politica, no. 2, 2006, pp. 18196. Broad chapters on Eurocommunism are in:
M. Maggiorani and P. Ferrari (eds), LEuropa da Togliatti a Berlinguer, 19451984,
Bologna: Il Mulino, 2005; F. Barbagallo, Enrico Berlinguer, Roma: Carocci, 2006.
More generally on Italian politics in the 1970s in the international context: M. Del
Pero, Distensione, bipolarismo e violenza: la politica estera americana nel Mediterraneo durante gli anni Settanta, in A. Giovagnoli and S. Pons (eds), LItalia repubblicana nella crisi degli anni Settanta. Tra guerra fredda e distensione, Soveria
Mannelli: Rubettino, 2003, pp. 12344; R. Gualtieri, The Italian Political System and
Dtente, Journal of Modern Italian History, no. 4, 2004, pp. 42849; L. Fasanaro,
Leurocomunismo nelle carte della Sed, Mondo Contemporaneo, no. 3, 2006, pp.
6395.
3 In particular: S. Pons, op. cit., p. x.
4 Comprehensive interpretations of the broad processes of the late 1970s are in: O. A.
Westad, The Global Cold War. Third World Interventions and the Making of Our
Time, Cambridge: Cambridge University Press, 2006; E. Di Nolfo, Dagli imperi militari agli imperi tecnologici, Roma-Bari: Laterza, 2007.
5 E. Berlinguer, LItalia, il PCI e gli Stati Uniti, lUnit, 29 May 1975. As noted by
Pons, the origins of this line of thought dated back to January 1973: S. Pons, op. cit.,
p. 23.
6 E. Berlinguer, Una Spagna libera in unEuropa democratica, speech given in
Livorno, 11 July 1975. Some months later, Berlinguer declared in Moscow that, while
the PCI looked with interest at the experiences of socialist countries, it strove for a
socialist society that would be the highest development of all democratic conquests,
and the guarantee of all individual, collective, religious and cultural liberties, E.
Berlinguer, Lottiamo per la costruzione di una societ socialista nella libert, nella
democrazia, nella pace, speech given in Moscow, 27 February 1976. Both speeches
are collected in E. Berlinguer, La politica internazionale dei comunisti italiani,
Roma: Editori riuniti, 1976, pp. 7286 and 11016.
7 Telegram, US Embassy Rome to Secretary of State, Reflections on the current Italian
political situation, 20 May 1974, secret in Declassified Documents and Reference
System (hereafter DDRS).
8 See: L. Barca, Cronache dallinterno del vertice del PCI, vol. 2, Soveria Mannelli:
Rubettino, 2005, p. 678. Also see the interview with Sergio Segre, I segreti della
politica internazionale, in M. Maggiorani and P. Ferrari (eds), op. cit., pp. 16183.
9 GFL, NSA, Memcons 19731977, Box 6, memcon (Ford, Kissinger, Leone, Moro),
26 September 1974, secret.
10 On the PCI and NATO in the 1970s, see: U. Gentiloni Silveri, Gli anni Settanta nel
giudizio degli Stati Uniti: Un ponte verso lignoto, in A. Giovagnoli and S. Pons
(eds), op. cit., pp. 89122.
11 National Archives and Record Administration, College Park, Maryland, United States
(hereafter NARA), RG 56, HAK Files, Nodis memcons, Box 12, memcon (Ford,
Kissinger, Moro, Rumor), 1 August 1975, secret.
12 Although the keyword was renewal of the DC, there can be few doubts about the
German preference for staunch anti-communists like Mariano Rumor: FriedrichEbert-Stiftung (hereafter FES), Archiv der Sozialen Demokratie (hereafter AdSD),
Helmut Schmidt Archiv (hereafter HAS), Box 6638, Abteilungsleiter VII to Schmidt,
Innenpolitische Situation Italiens and Persnlichleitswertung von Ministerprsident Rumor, 21 August 1974. This line was held consistently in the following years.
See: FES, AdSD, HSA, Box 7171, Massion to Schmidt and memcon (Schmidt, Italian
Ambassador De Mestri), 13 January 1976.

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13 The perceived threat to NATOs southern flank was at the heart of Schmidts worries.
See, for example: FES, AdSD, HSA, Box 7107, Vermerk ber ein Gesprch zwischen Bundesminister Genscher und Mario Soares, 15 September 1975. Also see
Gerald Ford Library (hereafter GFL), National Security Adviser (hereafter NSA),
Memcons, Box 6, Memorandum of Conversation (Ford, Kissinger, German Foreign
Minister Genscher), 26 September 1974, secret.
14 FES, AdSD, HSA, Box 6681, Schmidts meeting with US reporters, 7 July 1976.
15 FES, AdSD, HSA, Box 6683, Heick to Schmidt, Kongress der Sozialistischen Internationale in Genf, 30 November 1976.
16 See: I socialisti europei si spaccano sul problema dei rapporti coi comunisti, La
Repubblica, 20 January 1976, p. 9; on the dissent about Eurocommunism between
Kissinger and the Scandinavian social-democrats, see: NARA, HAK Files, Nodis
memcons, Box 16, memcon (Kissinger, Danish Prime Minister Jorgensen), 20
January 1976.
17 See, for example: Kissinger to the Vice-President, Your meeting with Giovanni
Agnelli, 22 May 1975, confidential in DDRS; Telegram, US Embassy Rome to
Secretary of State, US policy options towards Italian political situation, 30 August
1975, secret in DDRS; GFL, NSA, Presidential Country Files for Europe and Canada
(PCFEC), Box 8, Italy 4, National Security Adviser Scowcroft to Ford, Meeting with
John Volpe, 6 November 1975, secret.
18 Lincognita comunista, Corriere della Sera, 1 May 1976, p. 1. An interesting analysis is in: GFL, NSA, PCFEC, Box 8, Italy 5, Parker to Ford, US response to the
earthquake in Italy: special political considerations, 17 May 1976, secret.
19 CIA, Briefing Book, May 1976, secret in DDRS.
20 P. Ginsborg, A History of Contemporary Italy, London: Penguin, 1990, pp. 33358.
21 On the historic compromise see: P. Ginsborg, Berlinguer tra passato e presente, in
M. Battini (ed.), Dialogo su Berlinguer, Firenze: Giunti, 1994, pp. 5695; E.
Santarelli, Storia critica della Repubblica. LItalia dal 1945 al 1994, Milano: Feltrinelli, 1996, pp. 21150.
22 On the doubts within the PCI about the decision to abstain in confidence votes: L.
Barca, op. cit., p. 649.
23 Clift to Kissinger, Italian Debate on Historic Compromise, 10 September 1974, confidential in DDRS. While pointing out that the PCI wanted at least some official
recognition, US observers recognized that when the party collaborated constructively
with the parliamentary majority its amendments did not significantly reduce the
amount of revenue [. . .] taken in by the program, but they did lighten the tax burden
on low income groups at the expense of corporations and the more affluent.
24 The widespread street protests against the austerity program implemented by
Andreotti with the abstention of the PCI during 1977, contributed to the consolidation
of the radical Movimento Settantasette. See: P. Ginsborg, op. cit., pp. 7186.
25 The personal papers of Ugo La Malfa, deputy prime minister from 1974 to 1976,
quite clearly indicate that the Republican leader thought, at least since 1975, that the
PCI must be brought closer to government responsibility. See, in particular: Archivio
Centrale dello Stato (ACS), Fondo La Malfa, Box 20, memcon (La Malfa, DC secretary Zaccagnini), 6 July 1976, and memcon (La Malfa, Moro), 17 November 1977.
26 E. Santarelli, op. cit., pp. 24450.
27 On the G7 summits: P. Hajnal, The G7/G8 System. Evolution, Role and Documentation, Ashgate: Aldershot, 1999; R. D. Putnam and N. Bayne, Hanging Together:
Cooperation and Conflict in the Seven-Power Summits, rev. ed., London: Sage, 1987.
28 See: D. Harvey, A Brief History of Neoliberalism, Oxford: Oxford University Press,
2005.
29 Puerto Rico Summit, Joint Declaration of the International Conference, 28 June
1976, available G8 Information Centre www.g8.utoronto.ca/summit/1976sanjuan/
communique.html (accessed 15 December 2007). Even more explicitly targeted

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against NIEO: GFL, Hartmann Files, General Subject File, International Economic
Summit, Box 12, press conference (Kissinger, Treasury Secretary Simon, Chairman
of Economic Advisers Greenspan), 3 June 1976.
It is impossible to render the complexity of Schmidts position with a single documentary reference. However, two conversations of the Chancellor with US officials
are particularly enlightening: GFL, NSA, Memcons, Box 12, memcon (Ford,
Kissinger, Schmidt), 29 May 1975, secret; GFL, NSA, Memcons, Box 14, memcon
(Ford, Kissinger, Schmidt, Genscher), 27 July 1975, secret. In a similar fashion, at
Rambouillet, Schmidt declared himself absolutely contrary to any form of international dirigism and suggested that the West educate Third World countries to
think in market-economy terms. See: GFL, NSA, Memcons, Rambouillet, Box 16,
Robert Hormats, Notes on the Economic Summit. Third session, Energy Raw Materials and Development secret, attached to Hormats to Scowcroft, Copy of the Notes,
2 December 1975. The quotation is from p. 24 of Hormats notes.
Greenspan and Scowcroft to Ford, Puerto Rico Summit Overview, 25 June 1976 in
DDRS. Also see, for a clearer definition of the conditions connected to the special
corrective programs for the borrowing countries designed to restructure their
domestic economies: Department of State memorandum, International Financial and
Monetary Issues, 4 June 1976, secret in DDRS.
FES, AdSD, HSA, Box 6681, Schmidts interview with German reporters, 19 July
1976. Also see: memcon (Ford, Kissinger), 18 May 1976, secret in DDRS. The possibility that changes be made to assistance programs in the case of a communist electoral takeover were also made public by the United States in March: V. Zucconi,
Washington: se il PCI andasse al governo, revisione della politica di assistenza, La
Stampa, 20 March 1976, p. 1. Such a possibility was also taken in consideration by
the National Security Council, GFL, NSA, NSSM-NSDM, Box 2, NSSM 242 US
policy toward Italy, 4 May 1976, secret. More generally, A. Varsori, Puerto Rico
(1976): le potenze occidentali e il problema comunista in Italia, Ventunesimo
Secolo, forthcoming 2008.
Large sectors of the European non-communist left reacted with disdain. In those days,
the French daily Le Monde read: Oh! Mr. Schmidts finger! It points at Italy so that
we put it aside. He will succeed in convincing us that we are all Italians, R. De
Montvalon, Le doigt de M. Schmidt, Le Monde, 21 July 1976, p. 1. In Italy, the
scandal of the Chancellors declaration was strongly underlined by both the
conservative and progressive press. Moro replied with a harsh parliamentary speech,
claiming that his government had not been informed previously, had not participated
in any meeting, and had not been informed afterwards. See ACS, Fondo Aldo Moro,
Moro speech draft, July 1976. However, Moros persuasiveness was not helped by
the SPD spokesman, according to whom the Italian prime minister was present at
least when the Italian question had been raised in general terms, La Santa Alleanza
di Portorico, La Repubblica, 20 July 1976, p. 1.
Yeo to Ford, 24 June 1976 in DDRS.
The phrase was coined by the IMF economist John Williamson in the late 1980s. See:
J. Williamson (ed.), Latin American Adjustment: How Much Has Happened, Washington, DC: Institute for International Economics, 1990.
FES, AdSD, HSA, Box 6688, Memorandum for the Chancellor, Besuch des italienischen MP Andreotti in Bonn, 1719 Januar 1977, 20 January 1977; Undersecretary
Solomon to Secretary Blumenthal, Summary of Major Treasury Activities 24 February 1977, confidential in DDRS; Solomon and Assistant Secretary Bergsten to Blumenthal, Summary of Major Treasury Activities, 24 March 1977, confidential in
DDRS. More generally, on the intense negotiating activity deployed by the US and
West Germany with the Italians, see: M. De Vries, The International Monetary Fund,
197278, Washington, DC: IMF, 1985, pp. 45060.
See, for example: FES, AdSD, HAS, Box 7251, Memcon (Schmidt, Andreotti), 19

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January 1977; GFL, NSA, Memcons, Box 21, memcon (Ford, Kissinger, Andreotti),
6 December 1976, secret.
This conclusion seemed so obvious that, by December 1976, the State Department
doubted the PCIs support for Andreotti could last for long. See GFL, NSA, PCFEC,
Box 8, Saunders to Kissinger, Implications of the Communist/Christian Democratic
Accommodation in Italy, 2 December 1976, secret, one year later, a CIA analysis
clearly stated, with some surprise, that the PCI had taken a conservative position in
support of economic stabilization under IMF and EC guidelines, CIA memorandum,
The Impact on the European Community . . . , 17 January 1978, secret in DDRS.
O. Njlstad, The Carter Administration and Italy: Keeping the Communists Out of
Power Without Interfering, Journal of Cold War Studies, no. 3, 2002, pp. 5694.
The US Embassys first secretary, Martin Weenick, was even invited to the Festa dellUnit, the partys huge summer festival. See: Barca, op. cit., p. 678.
Treverton to Aaron, Agenda note for PRC Meeting on Europe, 11 April 1977, confidential in DDRS. For a neat anti-communist interpretation of the non-interference
policy, see: R. Gardner, Mission Italy: On the Front Lines of the Cold War, Lanham,
MD: Rowman & Littlefield, 2005.
M. De Vries, op. cit., p. 455. Only some days after the conclusion of the IMF-Italian
agreement, which amounted to $500 million, the European Community lent Italy
another $500 million.
The London summits final declaration stressed an enhanced role for the IMF, and
supported the linkage of its lending practices to the adoption of appropriate stabilization policies: London Summit, Declaration: Downing Street Summit Conference, 8
May 1977, available www.g8.utoronto.ca/summit/1977london/communique.html
(accessed 15 December 2006). Carters participation in the decision-making process
of the so-called Volcker shock is, however, still subject to debate: W. C. Biven,
Carters Economy. Economic Policy in an Age of Limits, Chapel Hill: University of
North Carolina Press, 2001, p. 237. More generally: M. Aglietta, Rgulation et crise
du capitalisme, Paris: Jacob, 1997.

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