ITALY'S SOCIALISTS: THE MAJOR ROLE OF A MINOR PARTY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00555R000100150005-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: February 7, 2011
• Sequence Number: 5
• Publication Date: March 1, 1983
• Content Type: REPORT

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Directorate of
Intelligence
Italy's Socialists:
The Major Role
of a Minor Party
EUR 83-10082
March 1983
293
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Directorate of Secret
Intelligence
Italy's Socialists:
The Major Role
of a Minor Party
This paper was prepared by Office of
European Analysis.
EURA
Comments and queries are welcome and may be
addressed to the Chief, West European Division,
Operations and the National Intelligence Council.
Secret
EUR 83-10082
March 1983
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Italy's Socialists:
The Major Role
of a Minor Party
Key Judgments The Socialists hold a pivotal position in Italian politics because parliamen-
Information available tary arithmetic makes it impossible for the dominant Christian Democrats
as of 11 March 1983 to form a non-Communist coalition without their support or abstention.
was used in this report.
Bettino Craxi, the current Socialist leader, has been working for the last six
years to give the party greater clout, and his efforts now have reached the
point where we think he has a better chance than any predecessor to
become Italy's first Socialist prime minister.
Craxi has extracted more concessions from the Christian Democrats in
return for his party's support than previous Socialist leaders, and he is now
weighing whether to try forcing an early national election this spring in the
hope of strengthening the Socialists and easing his way into the premier-
ship. He is also counting on the precedent established by Republican leader
Giovanni Spadolini, whose two governments last year laid the basis for a
new, but not yet firmly established principle that the prime-ministry should
alternate between the Christian Democrats and the lay parties.
Craxi tried futilely to engineer an election twice in the last six months, and
now we expect him to proceed carefully. It is our judgment that if Craxi is
prepared to create a government crisis and see it through to an election, his
chances of emerging as prime minister are slightly better than even. Even
without a spring election, we do not rule out the possibility that the
Christian Democrats might attempt to resolve the next crisis by inviting
Craxi to become prime minister.
A Craxi government's prospects would hinge largely on its composition.
While a score of variations are possible, we believe that a center-left
coalition with the Christian Democrats and at least two of the smaller
parties is Craxi's most likely choice, given his fear of domination.in any al-
liance with the much larger Communist Party and given the dim prospects
for cooperation among the intensely competitive smaller parties.
Although Craxi would exert considerable influence as the leader of a
center-left coalition, we doubt that he could dominate such a government
the way he has dominated his party. He nonetheless would stand a good
chance of altering some traditional patterns of domestic and foreign policy.
iii Secret
EUR 83-10082
March 1983
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Institutional reform has figured prominently in the Socialist platform, and
Craxi would probably work to strengthen the office of prime minister, press
for measures to streamline the legislative process, and promote direct
election of the president. There probably would be few major changes in
the economic sphere. Under Craxi, the Socialists have renounced their past
espousal of state-controlled economic planning and now base their hopes
for an economic renaissance on private enterprise.
Although we would not expect major shifts in the main lines of Italian for-
eign policy, Rome would probably be a more prickly ally under Craxi,
.particularly on matters involving the Middle East, North Africa, Latin
America, and the Third World. On the other hand, the Socialists have
abandoned their traditional ambivalence toward NATO and have become
strong advocates of Alliance policy. Craxi mistrusts the Soviets and almost
certainly would give the United States strong support on East-West
relations. We think Craxi could be counted on to keep Italy's commitment
to base cruise missiles (INF) next year, provided there is no dramatic
upsurge in Italian peace movement activity and provided West Germany
and the United Kingdom go ahead with basing plans.
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Italy's Socialists:
The Major Role
of a Minor Party
The Biggest 9.8 Percent in Europe
The election of 1979 divided Italy's Parliament into
three blocs: the Christian Democrats, the Commun-
ists, and the Socialists and smaller lay parties. The
parliamentary arithmetic dictates that no one bloc
can form a government without the support or absten-
tion of one other. With the Christian Democrats and
the Communists unwilling and/or unable to come to
terms with each other, governments have consisted of
fragile coalitions linking the Christian Democrats
(DC) with the Socialists (PSI), Social Democrats
(PSDI), Republicans (PRI), and Liberals (PLI).F--
The Socialists' 9.8-percent share of the vote in the
parliamentary election of 1979 left them the largest of
the small parties and confirmed their pivotal position:
it is impossible to form a non-Communist parliamen-
tary majority without them. Although the Socialists
lag well behind the DC and PCI-which won respec-
tively 38.4 percent and 30.4 percent of the vote-most
of the crises that have rocked the political scene over
the past year can be traced, in one form or another, to
the ambitious Socialist leader Bettino Craxi.
Since taking over as leader of the Socialist Party in
July 1976, Craxi has halted the party's electoral slide
and- significantly improved its results in a series of
local and regional elections. In the process he has
moved the party from the margins of politics to center
stage. Described by admirers and detractors alike as a
ruthless infighter who thrives on the "big gamble"-
recent biographies emphasize his love for marathon
poker games-we think he is at the same time careful
and calculating.
He has strengthened his personal control of the party
apparatus through changing party statutes and ap-
pointing trusted aides to key posts in the party
hierarchy. Most important, Craxi has managed-at
least temporarily-to stop the battling between mod-
erate reform-minded Socialists and those with more
doctrinaire Marxist views that often rendered the
Bettino Craxi,'49, attended a Catholic boys'school for 13 years
and seriously thought of becoming a priest, but his ambitions were
redirected after his activist Socialist father was driven under-
ground. That experience transformed Craxi from a potential
activist cleric to a militant Socialist. Craxi traces his determina-
tion to succeed to his German ancestors who settled first in
Campania, then in Sicily, and finally in Milan. Often accused of
being authoritarian, Craxi describes himself as a disciplinarian. A
family man, Craxi says his wife Anna fully shares his political,
social, and humanistic ideals. He favors bringing more women into
the PSI and views women as hardworking, determined, and full of
intuition and imagination. He has little time for hobbies but
relaxes by watching televised soccer games, playing the guitar, and
reading. His tastes in reading range from the works of Hemingway,
Craxi, one of the most admired and most detested
politicians on the Italian scene, plays a major role in
shaping opinion and political debate. Yet until July
1976 he was a virtual unknown. When he succeeded
party ineffective in the past.
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the leftwing Francesco DeMartino as party leader,
Craxi's avowed "supporters" numbered only 10 per-
cent of party members. By the 1981 Party Congress,
however, Craxi controlled 70 percent of the delegates
and an overwhelming 72 percent of the vote con-
firmed his leadership.
Craxi emphasizes his leftist credentials,
his actions are. guided far more
frequently by pragmatism. Italian scholars who have
followed his career emphasize that he focuses mainly
on results and has little interest in Marx and Lenin.
For Craxi, being a leftist means being pragmatic and
efficient, as well as concerned about the human
Press reports lead us to conclude that the Socialists
expected the Spadolini government to be short lived,
but hoped the precedent of a non-Christian Demo-
cratic prime minister would clear the way for Craxi.
Once it became clear, however, that despite misgiv-
ings about Spadolini the other parties would support
him in order to block a Socialist-led government,
Craxi fixed on an early national election as his path to
power. He has contributed to the fall of two govern-
ments since August in futile efforts to force such a
national election.
Increasingly, Craxi has emerged as a master of the
unexpected, always on the alert for situations that he
can turn to advantage. For him, politics is'a war of
movement and under his command the Socialists have
waged a guerrilla campaign within the governing
coalition on a variety of issues. When his stands have
threatened to create an irreparable breach in the
coalition, however, Craxi has drawn back-a quality
for which he is praised by supporters and harshly
criticized by detractors
To a greater degree than previous Socialist leaders,
Craxi has been able to turn the Christian Democrats'
factionalism, which frequently reduces that party to
semiparalysis, to his party's advantage, and he has
forced the Christian Democrats to deal with the
Socialists as an equal despite their disparity in voting
strength. We believe, however, that he is not content
with the cabinet posts, patronage, and financial influ-
ence he has extracted from the Christian Democrats;
his ultimate aim is to lead a government as prime
Only one non-Christian Democrat has held the office
in the postwar period. The Socialists and the small
parties forced the Christian Democrats to agree in
principle in 1981 that the premiership should alter-
nate between a Christian Democrat and a candidate
from their ranks. Craxi was unable to secure the
office for himself and eventually agreed to support
Giovanni Spadolini, whose small Republican Party
represented only 3 percent of the vote.
According to Embassy reports, Craxi has
received contradictory advice, however, on timing a
national election. Some Socialist leaders argue that
the party can afford to bide its time, others that they
must move as quickly as possible. In any event, Craxi
must be careful not to topple the government on too
flimsy a pretext because Italian voters traditionally
punish a party that initiates political instability.
This concern over a voter backlash accounts for only
some of the "stop" in the "stop/go" tactics followed
by the Socialists. President Pertini has been another
important restraining factor. We believe that at 86,
Pertini, a lifelong Socialist, is less motivated by
partisan ambitions than his junior colleagues. Rather,
we believe that he has come to view the preservation
of the stability and health of Italian institutions as his
The "go" side of the equation can be attributed in
part to Craxi's penchant for the political offensive and
his tactical interest in keeping the DC off balance. We
believe it is also attributable, however, to Craxi's need
to demonstrate continued political success in order to
maintain his control of the party.
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That Craxi decided so quickly to change course and
support a second Spadolini government can be attrib-
uted first to Pertini's warning and, second, to press
rumors that the Christian Democrats and Commu-
nists had begun to discuss the possibility of forming a
Christian Democratic-Republican-Social Democrat-
ic-Liberal government, supported from outside by the
Communists. We believe that nothing is more alarm-
ing to Craxi than the prospect of a Christian Demo-
cratic/Communist rapprochement, which would cut
the ground out from under the Socialists and leave
them once again on the margins of the Italian political
game
Craxi's control of the party rests more on tangible
accomplishments than on personal standing. This
record was blemished by his flip-flops during the
cabinet crises of last August and October, when he
twice insisted that a national election was the only
solution to the political impasse, but then gave way
and supported new center-left governments. Accord-
ing to Embassy reports, senior Socialist leaders pri-
vately were highly critical of his handling of the party
during the crises. We suspect that these sentiments
are widely shared within the party and could ulti-
mately weaken his hold unless he does something to
reverse the impression of indecisiveness.
Nonetheless, despite the criticism of Craxi from with-
in the party, we believe his position remains reason-
ably solid primarily because of the change in party
statutes he engineered two years ago. The provision
for direct election of the secretary by the party
congress rather than the Central Committee has given
Craxi unprecedented authority. The new statute re-
quires convening an extraordinary congress in the
event the Central Committee votes no confidence in
the secretary. In effect, only a party congress can
remove a secretary.
Craxi to date has dealt effectively with his internal
opposition. He has moved against those who failed to
rally to his side after his election to the secretaryship
or bow to inducements later on. He has also isolated
at least three important members of the Socialist left
without whose help he could not have been secretary.
Meanwhile, the once dominant left faction of the
party has been seriously curtailed. But leftist senti-
ments are deeply rooted, and we believe Craxi contin-
ues to formulate most party policies with one eye over
his left shoulder.
Craxi's approach has been criticized by more tradi-
tion-minded party members both on practical and
ideological grounds. Statements to the press by sever-
al prominent party dissidents throughout Craxi's ten-
ure as Secretary suggest that while they are pleased
by the party's successes in local elections they worry
that he has shifted the party so far from its ideological
moorings that it will not be able to consolidate these
gains at the national level. Some Italian observers
argue that Craxi's pragmatic approach may even be
counterproductive among some groups traditionally
favoring the Socialists, particularly union members,
young people, and women.
Many of the same critics also are uncomfortable with
Craxi's interest in modern campaign techniques, par-
ticularly his fascination with the media. This has led
to charges both from within and outside the party that
he is overly preoccupied with introducing American-
style politics in Italy.
Finally, we believe Craxi's practice of immersing
himself in all aspects of party life has been yet
another unwelcome reminder of his personal domi-
nance. Socialist Party secretaries have traditionally
concentrated their energies on directing the party's
political line and left the day-to-day running of the
party to others.
Craxi knows that the premiership is a precarious
perch and that if and when he obtains it, he will face a
host of adversaries anxious to see him falter.
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Craxi-either positively or negatively-his time at I
Palazzo Chigi could become the least stable period of
postwar Italian politics. A Craxi government's pros-
pects will turn in great part on its composition, and
Craxi will be especially careful in choosing allies.
While a score of variations are possible, we believe
they derive from three basic options: the leftist alter-
native, a lay party bloc/Christian Democratic ar-
rangement, and a continuation of the neo-center left.'
partner in any alliance. He has probably also conclud-
ed that such an arrangement would offer far more
opportunity for the Communists to siphon off Social-
ist support than for the Socialists to make significant
inroads into the Communists' camp
Still, Craxi has avoided ruling out a leftist alterna-
tive-a tactic we believe is designed to assuage his
internal party critics, shore up his own leftist creden-
tials, and increase his leverage in bargaining with the
The Communist Option
The leftist alternative, or a government based on
Socialist/ Communist cooperation with the possible
participation of the Republicans and Social Demo-
crats, continues to be the preferred choice of the
Socialist Party's left wing.
We believe, on balance, that Craxi is prepared to flirt
with the Communists but would consider a formal
partnership only under extraordinary circumstances.
For example, a serious revolt by leftwing elements of
the Socialist Party leadership that is widely supported
by the rank and file and threatens his authority
coinciding with clear evidence that the Christian
Democrats and the small parties are determined to
block his path to the prime-ministry, might cause him
For his part, Craxi has a deep-rooted distrust of the,
Communists and the-Communist Party apparatus
that dates back to his formative political years. His
biographers note his vivid recollections of the national
election of 1948, when the Communists were able to
use their alliance with the Socialists to decimate them
at the polls. They contend that these misgivings were
later reinforced by Soviet action in Poland, Hungary,
Speculation by the press that Craxi
would launch such an initiative at the PCI's March
congress fell short. Embassy Rome reports that, while
Craxi endorsed leftist unity in principle, he refused to
yield on any of the issues that divide the two parties.
and Czechoslovakia
Craxi almost certainly worries that the Communists'
size, discipline, and well-developed apparatus would
relegate his party to the role of permanent junior
' Center-left coalitions of Christian Democrats, Socialists, Republi-
cans, and Social Democrats governed Italy from 1962 to 1974. The
mid-1970s saw experimentation with different formulas, including
one involving Communist parliamentary support for a Christian '
Democratic-led government. Following the parliamentary election
of 1979, the Christian Democrats and Socialists renewed their
collaboration, leading journalists to dub the arrangement the "neo-
The Lay Center/DC Option
We believe that Craxi would ideally prefer to enter
negotiations with the Christian Democrats over the
premiership at the head of a solidly united bloc of
small parties. The Socialists have long been the
dominant force among the lay parties, and Craxi's
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publicly avowed goal is to bind these parties to the
Socialists with some formal agreements on policies
and election tactics. This would increase his leverage
with the Christian Democrats and the Communists
and, over the longer term, might put the Socialists in
a better position to siphon off votes from their allies.
There have been some moves toward closer coordina-
tion and cooperation among the small parties, but the
Socialists have been generally unable to take advan-
tage of these developments. The small parties' deter-
mination to maintain their individual identities and
traditions, along with the personal power and prestige
of their leaders, shows no signs of abating. These
motives are reinforced by personal animosity between
Craxi and a number of small party leaders.
Craxi, nonetheless, may propose that the Socialists
and the small parties enter the next election campaign
with a joint program. If one or more of the small
parties agreed, he could claim, during postelection
negotiations to represent a block of votes that exceed-
ed his own party's score by perhaps as much as 10
percentage points. Assuming the small parties could
be persuaded to agree to such an arrangement-and
at this point the chances appear slim-they would
almost certainly demand in advance specific guaran-
tees of power and patronage. Looking ahead to future
elections, Craxi might next try to persuade them that
the center parties as a group could be strengthened by
not competing against each other in selected districts.
We believe that he would view such a move as an
interim step toward joint lists at some later date. F_
With the Communist option unacceptable and the
prospects for coming to terms with the small parties
still dim, Craxi has set out to achieve the premiership
through the neo-center-left formula. He has been
disappointed several times by openings in this direc-
tion that looked promising but later evaporated. His
one attempt to form such a government in July 1979
failed miserably.
We suspect Craxi has concluded that supporting the
current Fanfani government for the time being can
ultimately strengthen his bid for the prime-ministry.
Because of the precedent set by the Spadolini govern-
ment, the small parties will argue that Christian
Democrat Fanfani should be replaced by a prime
minister from their ranks. With the Republicans
having had their first turn with Spadolini, Craxi
should have a strong claim to the premiership the next
time the post is vacant
The US Embassy reports that Craxi has struck a deal
with Fanfani under which the Prime Minister has
agreed to acquiesce in an election this spring in return
for Socialist backing for his candidacy for the presi-
dency when Pertini dies or his mandate ends in 1985.
Fanfani's promise "not to oppose" an election was
deliberately vague, and there is no guarantee that he
can bring along the rest of his party. DC leaders have
been determined that the new government should last
until the end of the current legislature in spring 1984,
On the other hand, political commentators in Italy
believe that DC Secretary Ciriaco DeMita-who is
slowly becoming more confident in his post-is now
more upbeat about the Christian Democrats' chances
in an early election. We believe that if he concludes a
spring election will show the DC regaining its elector-
al momentum and the Socialists falling short of the 13
to 14.5 percent attributed to them in public opinion
polls earlier this year, he may accept an early dissolu-
tion of Parliament. If projected election numbers are
unattractive, DeMita could opt to allow Craxi to
become prime minister without an election, but with
an eye to making his tenure so difficult that Craxi's
public image and his standing within his party would
be damaged beyond repair.
If Craxi does challenge Fanfani this spring and press
for an election, we think he has a slightly better than
even chance of becoming prime minister. Most Italian
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journalists and politicians assume that-as in the
past-an early election will yield only a modest shift
of seats among the parties in parliament. We believe,
however, that so long as the Christian Democrats gain
less percentage wise than the Socialists, or do not gain
at all, a modest Socialist increase, say to 11 percent,
should give Craxi the leverage he needs.
In short, Craxi must at least demonstrate momentum
in the election. Thereafter, it is a question of parlia-
mentary arithmetic and his willingness to stand firm
in rejecting all other outcomes. If the arithmetic is
roughly equal to the present situation, Craxi can
theoretically block every arrangement short of a deal
between the Christian Democrats and the Commu-
nists-and both DC and PCI internal politics seem to
rule out this possibility for the time being. In addition,
he has the newly founded principle of "alternation" on
his side. If the DC were to lay claim to the premier-
ship after Fanfani, it would risk antagonizing not only
the Socialists but also the other small parties whose
cooperation the DC needs.
A Craxi Premiership:
A Commitment to Change
As prime minister, Craxi would attempt to put his
stamp on the Italian political scene. His vision for
Italy, as described by a Socialist jurist, is to create, a
social democracy "midway between Stockholm and
Vienna." He favors strong national leadership but
also favors balancing a strengthened national govern-
ment with a devolution of civil power to local and
regional authorities.
Domestic Policy-
Emphasis on Reform
The broad outlines of Craxi's domestic program have
been published. The program, broken down into four
broad categories-the four "great reforms"-encom-
passes Italian politics, institutions, the economy, and
the unions. The Socialists have returned to this mate-
rial regularly, placing a special emphasis on institu-
tional reform.
The Socialists put direct election of the president at
the top of their agenda. They favor an election with
two rounds, with the winner serving a five-year term.
Under present rules, the president is elected to a
seven-year term by the combined houses of Parlia-
ment and three delegates from each region.
The Socialists do not propose to alter the president's
constitutional powers, but proponents of the plan
insist that direct election will enhance his moral
authority and strengthen his role as a stabilizing
force. Those who oppose the measure argue that the
change is part of a broader plan of Craxi's to move the
country from parliamentary to presidential govern-
The PSI also advocates reducing the number of
parliamentary deputies, modifying the rules governing
their election, and limiting consideration of most
legislation to one house of parliament. The Socialists
argue that the lower house, in particular, is too
unwieldy as currently organized. They attribute this
in great part to the number of parties in Parliament.
To remedy the situation, they have proposed that
parties be required to win at least 5 percent of the vote
in a general election to qualify for representation. If
such a rule had existed during the parliamentary
election of 1979, five parties-the Republicans, Social
Democrats, Liberals, Radicals, and the far left Demo-
cratic Party of Proletarian Unity-would have been
excluded. Under those circumstances the Socialists
almost certainly would have emerged from the elec-
tion with a strengthened claim to hold the balance
between the Christian Democrats and the Commu-
nists.
The Socialists would like to see the lower house
elected on the basis of single-member districts and the
Senate chosen by proportional voting based on region-
al lists. They also favor functional specialization
between the two chambers, with economic and finan-
cial matters relegated to the Senate.
Craxi and his colleagues have devoted considerable
attention to ways of strengthening the office of prime
minister. One proposal put forward by the Socialists
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would have the prime minister designated for the
length of the legislature. Another calls for the intro-
duction of the German method of "constructive no-
confidence voting" under which a government cannot
be forced from office until a successor government has
been formed.
The Socialists also want to give the prime minister
more authority over his cabinet. They favor allowing
him to choose and replace his ministers at will. The
Socialists would reduce the size of the cabinet and
streamline cabinet meetings by limiting attendance to
ministers with major portfolios
The PSI also wants to revise Parliament's rules and
place restrictions on the use of secret votes. The
present secret ballot allows dissident members of
Parliament to bolt party ranks with impunity. As a
result, on several occasions prime ministers have
suddenly found themselves without a majority. More
importantly, legislation much desired by the Socialists
has often failed to pass because Christian Democrats
have broken with the government and voted against it
in secret ballots
The Socialists have also highlighted the need to
reform the judiciary, to limit the discretionary powers
of the magistrates, and to allow the communes and
regions to raise their own revenues.
Reform probably would figure prominently in Craxi's
discussions with potential coalition partners. We be-
lieve, though, that Craxi at the beginning of his
tenure would try to choose issues on which he thinks
he has broad public support. At the start of negotia-
tions during his only previous attempt to put together
a cabinet, Craxi presented his colleagues with a 10-
point program which, among other things, called for
new initiatives in the areas of public order, civil rights,
and the administration of justice. In addition to these
subjects, we suspect that changes in the penal code
and an overhaul of the magistrate system would also
figure prominently on his initial agenda. We believe
that only later, after establishing some kind of a track
record for reform, would Craxi be prepared to move
on to more controversial issues, such as limiting the
secret parliamentary vote, applying more restrictive
criteria for party representation in Parliament, and
changing the presidential election rules
The Socialists candidly admit that the reform process
is likely to be infinitely slow. The Fanfani government
is committed in principle to some institutional re-
forms, but even if it lasts to the end of the legislature
in spring 1984, it is likely to have made only a start.
We suspect that if Craxi gains office he will try to 25X1
capture the public's imagination by some early dra-
matic step, such as appointment of a special minister
without portfolio for institutional reform. Craxi would
likely discover quickly, however, that his ability to
promote reform hinges on his coalition partners'
willingness to put national interests ahead of party
concerns-a tradition that has never taken root in 25X1
Italian politics. 25X1
The economic line adopted by the Socialists at their
1981 Congress reflects Craxi's pragmatic tempera-
ment. Under his leadership the PSI has attempted to
disassociate itself from its past espousal of state-
controlled economic planning. Today, PSI hopes for
an Italian economic renaissance rest with private 25X1
enterprise.
Socialist economic policy during the past year has
been muddied, however, by electoral considerations.
To realize a sizable increase in its vote, the party must 25X1
attract new support from the center and the left. The
Socialists are trying to tailor their economic positions
to appeal to both camps at the same time. Thus, when
called upon in Parliament to take a definitive stand,
they have dutifully voted for government-sponsored
austerity measures. However, in debate they have
geared their rhetoric to voters on the left, voicing
opposition to measures that would inhibit job creation
or growth.
The PSI has often supported budget austerity in
practice while rejecting it in principle. To minimize
these conflicting signals, the Socialists have increas-
ingly embraced a less vigorous version of austerity
emphasizing crackdowns on tax evaders. This has
allowed them to claim they are factoring consider-
ations of social justice into economic policy
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Successive statements to the press demonstrate than
Socialist Minister of Finance Francesco Forte sup-
ports the Christian Democratic goal of scaling down
the public sector. He has, however, disagreed with
them in the past over short-term fiscal policy. He
espouses policies-"supply-side" tax cuts, additional
funds for technological innovation, and restructur-
ing-which would stimulate investment, even at the
expense of a large budget deficit.
Socialist labor policy has appeared contradictory dur-
ing the past year. On the one hand, the head of the
Socialist-affiliated union prevented a full-fledged gen-
eral strike against the Spadolini government in April
1982. At that point the Socialists gave the appearance
of being more concerned about their reputation for
responsibility than about their appeal to labor. Their
emphasis shifted with the highly controversial abroga-
tion of the scala mobile agreement by private employ-
ers last June.' According to the US Embassy in Rome,
the PSI saw the abrogation as an effort by the
Christian Democrats-using their influence with
Confindustria, the Italian manufacture's associa-
tion-to undermine the Spadolini government's, and,
by inference, the lay parties' ability to tackle the
country's fundamental economic problems. PSI State
Participations Minister DeMichelis instructed the
public employers' group not to follow the lead of the
private employers. His attempt to divide and conquer
management failed, however, and since June, the
Socialists again have been less assertive in,their
support for labor.
How far and how fast Craxi would be able to bring
Italian foreign policy into line with his thinking would
likely depend on the relative strengths and weaknesses
of his coalition partners. We doubt that he could
dominate the policies of a coalition cabinet the same
3 The Scala mobile is a nationwide wage indexation scheme agreed
to by labor and management in 1975. It allows wages to be aligned
with changes in the cost of living on a quarterly basis. Management
has become increasingly uncomfortable with the agreement and
opted last June to provide the mandatory six months' notice
required to abrogate it. An agreement just concluded will reduce
the amount of the automatic cost-of-living wage increase by 15 to
way that he has dominated his party. We expect, in
fact, that circumstances might require Craxi to give
the foreign affairs portfolio to one of several strong
Christian Democratic personalities, or to a Republi-
can. Either outcome should work against an abrupt
policy shift but would not prevent Craxi from putting
his own stamp on Italian foreign policy.
Under Craxi, the Socialists have abandoned their
traditional ambivalence toward NATO and have be-
come strong advocates of alliance policy. Craxi mis-
trusts the Soviets and, with him as prime minister, the
United States could continue to expect strong support
on East/West issues. He sees NATO, however, as an
alliance limited to Europe. While he probably will
advocate consultations among the allies on non-Euro-
pean problems, we believe that under his leadership
the United States would find Italy a more prickly
partner on matters involving the Middle East, North
Africa, the Horn, Latin America and the Third
World
Craxi strikes us as particularly critical of US policy in
Latin America. The Socialists have supported Gui-
llermo Ungo, president of the Revolutionary Front, in
El Salvador and the Sandinistas in Nicaragua and
have had a strong voice in influencing Italy's policies
toward the region. Similarly, the US Embassy in
Rome credits Craxi with shifting the Italian Govern-
ment away from supporting the EC's sanctions
against Argentina during the Falklands war. We thus
believe that with Craxi as prime minister, US efforts
in Latin America would be subject to more frequent
Italian criticism.
In the Middle East, Italy under Craxi would continue
to provide manpower and diplomatic support for the
Sinai and Lebanese peacekeeping forces. On the other
hand, he believes that Rome should recognize the
Palestine Liberation Organization.
25X
25X
25X
25X
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Secret
The Italian Government's decision to adhere to the
1979 INF basing decision turned in large part on
Socialist support for the project. Craxi, with an eye to
the left wing of his party, has attributed great impor-
tance to the arms control aspect of the decision. He
has enthusiastically endorsed the "zero option" and
even claimed credit for the idea. We believe that
Craxi and those Socialist leaders close to him see
support for the zero option as a means both to
reinforce their leftist credentials and compete with the
Communists by emphasizing the disarmament side of
NATO's dual-track decision. He has been equally
outspoken in favor of Pershing and cruise missile
basing. A decision by the United States to withdraw
from the INF negotiations with the Soviets might
complicate matters for Craxi, but barring that or a
sudden, unlikely upsurge of peace movement activity
in Italy, we believe he could be counted on to see the
basing project through.
The Socialists have also been instrumental in prolong-
ing the Italian Government's "pause for reflection" on
the Siberian gas pipeline deal. That stand, however,
has been dictated only partly by concern over Western
dependence on Eastern energy supplies. The Socialists
believe that Italy's future commercial interests lie in
the Mediterranean generally and North Africa in
Craxi's biographers have noted that strong influence
of French thinking in the formation of his world view.
This may account in part for the appeal that a more
independent Italian foreign policy holds for Craxi and
his inner circle. Lacking any real command of English
or German but able to read French, he draws much of
his information from the French press and from
contacts made through the Socialist International. He'
is attracted to the argument that Western Europe
must maintain a dialogue with the Soviets during
periods of Soviet/US diplomatic strain. While he
advocates cooperation among the West Europeans
and supports the European Community, we believe he
would pursue Italian national interests more aggres-
sively than his Christian Democratic predecessors
We believe that Craxi will continue to search for a
way to trigger an election and gain an advantage over
the Christian Democrats, but his two abortive at-
tempts of last fall will cause him to weigh his next
moves with special care. Although Craxi is a seasoned
poker player, his decision on whether to try forcing a
national election this spring will be his biggest gamble
to date.
Criticism of Craxi within his party and the press is on
past several weeks have also witnessed the first serious
stirrings of the traditional Socialist left since the
Palermo Congress. In late December 200 members of
the party's left wing met to consider alternative party
policies.
spring election campaign.
Past performance suggests that Craxi will move
quickly to squelch any incipient threat to his power.
According to the press, Craxi and his inner circle are
weighing the possibility of convening an extraordinary
congress in early spring. Craxi probably calculates
that such a gathering will provide an opportunity to
undermine his strongest potential opponents and reas-
sert his authority over the party's lower ranks. If
circumstances allow, we believe that Craxi will also
try to use such a congress as a launching pad for a
At this stage we believe the chances that Craxi will
decide to let the current Parliament serve its full term
in hopes of regaining whatever support he may have
lost since August and underscoring the Christian
Democrats' inability to come to terms with the coun-
try's economic problems. While the possibility of
Craxi withdrawing support from Fanfani as late as
next summer or fall cannot be ruled out, we believe
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that his enthusiasm for an early election will diminish
with the approach of the presidential "white" peri-'
od-the last six months of a legislature during which
the president is prohibited by the constitution from:
dissolving Parliament early.
Craxi appears better placed than ever before to
become prime minister whether elections take place
early or on schedule, but whether he succeeds will
turn to a large degree on whether he can improve the
Socialists' electoral standing. Moreover, even if Craxi
emerges at the head of a government, we believe that
relations with his coalition partners are likely to be
rocky from the start. Given the particularly strong
reactions-both positive and negative-that Craxi
arouses, his selection as prime minister could usher in
a still more difficult period on the domestic political
front.
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Socialist Party Communal Election Results
in Selected Major Population Centers, 1975-81 a
1975
1976
1979 National
Election
1980
1981
Comparisons
Percent
Number Percent
of Seats
Number
of Seats
(percent)
Percent
Number Percent Number
of Seats of Seats
1975 and 1980 1976 and 1981
Communal Elections Communal Elections
1979 National 1979 National
and 1980 and 1981
Communal Communal
Percent
Seats Percent Seats
Elections Elections
(percent) (percent)
Turin
12.8
10
9.9
14.4
12
Milan
14.8
12
11.6
19.6
16
Genoa
12
10
12.0
Bologna
9.3
5
7.8
9.4
6
1
0.1
1.6
Florence
10.4
6
10.1
12.4
8
2
2.0
2.3
South
Catonia
8.9
5
6.9
Bari
12.6
8
11.2
Islands
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Secret
Socialist Party Regional
Election Results, 1973-81 a
1973
1914
1975
1976
1978
1979
1980
1981
Comparison
Percent
Number Percent
of Seats
Number Percent
of Seats
Number Percent
of Seats
Number Percent
of Seats
Number Percent
of Seats
Number Lower House
of Seats National Election
(percent)
Percent
Number Percent
of Seats
Number 1973 and 1978
of Seats Regional Elections
Percent Seats
1978 and 1979
Regional-
National Elections
(percent)
1974 and 1979 I
Regional Electi
Percent Seat
1979
ns Regional-
National Elections
(percent)
1975 and 1980
Regional Elections
Percent Seats
1979 National and
1980 Regional
(percent)
1976 and 1981
Regional Election
Percent Seats
1979 National
and 1981 Regional
(percent)
Northwest
Piemonte
12.9
8
112
14.2
9
1.3 1
3.9
Valled'Aosta 8.5
3
3.6
1
-4.9 -2
Lombardia
14.0
11
11.3
14.5
11
0.5 0
3.2
Liguria
13.5
5
11.5
13.4
5
-0.1 0
1.9
Northeast
Trentino-Alto Adige 8.3
6
8
3
6
6
6
0 0
-2
3
Veneto
12.8 8
.
.
9.5 12.1 7
.
Friuli-Venezia Giulia 12.2 8
9.4 5
7.7
-2.8 -3 -2.2
P
Center
i
Emilia-Romagna
10.2
4
8.6
10.3
4
0.1
0
1.7
Toscana
10.7
4
9.8
11.8
5
1.1
1
2.0
Umbria
13.9
4
11.2
14.3
4
0.4
0
3.1
Marche
9.8
4
7.9
10.1
4
0.3
0
2.2
South
Lazio
9.7
6
8.7
10.6
6
0.9
0
1.9
Abruzzi
10.2
4
7.5
10.8
4
0.6
0
3.3
Molise
10.1
3
7.4
9.4
3
-0.7
0
2.0
Compania
10.4
6
9.4
12.5
7
2.1
l
3.1
Puglia
11.9
5
10.2
13.3
6
1.4
l
3.1
Basilicata
13.2
4
10.9
13.7
4
0.5
0
2.8
Calabria
14.7
6
12.8
16.5
7
1.8
1
3.7
Islands
Sicilia
10.2 10
10.5
14.3 14
I
4.1 4 3.2
Sardegna
11.6 10
11.1 9 8.9
-0.5 -lI
-2.2
a See map p. ii.
.1
i
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Secret
Secret
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