Abstract
After the autarchic experience of the Fascist regime, international economic interdependence represented a fundamental change for Italy. This chapter examines the origins and evolution of this new collaborative approach pursued by Italy in the international monetary field, despite the transition to the adverse global scenario which took place in the late 1960s. This negative change was embodied by US President Nixon’s decision to close the gold ‘window’ and thus refusing to match domestic economic policy and international monetary stability within a cooperative framework. Against this background, the Italian government strove to preserve monetary and financial interconnections among Western countries in a new era characterised by political instability, rocketing oil prices and inflation. Despite all efforts, at the beginning of the 1970s, this collaborative posture was definitely swept aside by a profound economic and political crisis which drastically reduced Italy’s diplomatic role.
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Notes
- 1.
Archivio Centrale dello Stato (hereafter ACS), Carte Moro (hereafter CM), b. 35, sf. 2, Appunto del Ministero degli Affari Esteri, ʻIl problema dell’oro e del dollaro’, Roma, n.d., Visita dell’On. Presidente del Consiglio e dell’On. Min. degli Esteri a Washington (20–21 aprile 1965).
- 2.
‘Indirizzo di saluto del governatore della Banca d’Italia al Comitato Monetario della Cee’, Roma, 28 October 1960, in Guido Carli , Scritti e Conferenze (1959–1963) (Roma: Banca d’Italia, 1969) I:48.
- 3.
Archivio Storico della Banca d’Italia (hereafter ASBI), Direttorio Carli (hereafter Dc), c. 62, f. 1, sf. 10, Appunto di Carli per Tremelloni, Roma, 27 September 1962.
- 4.
On de Gaulle’s monetary policy, see Henri Bourguinat , ‘Le général de Gaulle et la réforme du système monétaire international: la contestation manquée de l’hégémonie du dollar’, in De Gaulle et son siècle (Institut Charles de Gaulle : Paris 1992), 90–103, Maurice Vaïsse , La grandeur. Politique étrangère di général de Gaulle 1958–1969 (Paris: Fayard, 1998), 396–407. For an account of Jacques Rueff ’s ascendancy over de Gaulle, see Christopher S. Chivvis , ‘Charles de Gaulle , Jacques Rueff and French International Monetary Policy under Bretton Woods’, Journal of Contemporary History 41, no. 4 (2006): 701–720.
- 5.
By mid-October, prices over $40 an ounce had been reached on the London market.
- 6.
ASBI, dc, c. 64, f. 1, sf. 8, Appunto di Carli per Colombo, Roma, 12 March 1968.
- 7.
ASBI, Carte Carli (hereafter Cc), n. 70, f. 16, Lettera di Taviani per Dillon, Roma, 9 September 1961.
- 8.
The Group of Ten (or G10) included eight IMF members—Belgium, Canada, France, Italy, Japan, the Netherlands, the UK and the USA—and the central banks of two others, Germany and Sweden. Switzerland joined the Group in 1964, but the name remained the same.
- 9.
The treaty stipulated that, when short-term international flows of large amounts of capital could potentially cause fluctuations in exchange rates, the IMF should borrow funds from these ten nations to a ceiling of $6 billion to be loaned to member nations that suffer from currency crisis.
- 10.
Carli, Scritti e Conferenze, 162.
- 11.
Relazione Annuale della Banca d’Italia (hereafter R.A.), 1963, 184.
- 12.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 18, Letter from the Chairman of the Task Force on Foreign Economic Policy (Kaysen) to President Johnson, Washington, 25 November 1964.
- 13.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 9, Telegram From the Embassy in France to the Department of State, Paris, 16 June 1964.
- 14.
After a severe economic crisis in 1963–64, Italy lost about $400 million in gold reserves and in the following years the Bank of Italy partially reconstituted its stock by converting $80 million in gold. Nonetheless, the Italian government disassociated itself from French policy, confirming ‘confidence in the dollar’. After the conversion, Italy held about $1.7 billion of its reserves in dollars while the gold ratio was about 55%, the lowest of any of the major European powers. Moreover, as Dillon emphasised, ‘the Italians have been very cooperative and should not be criticised in any way for their forthcoming gold purchase’. FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 56, Memorandum From Secretary of the Treasury (Dillon) to President Johnson, Washington, 27 March 1965.
- 15.
ACS, Cm, b. 31, f. 64, USA, Appunto della Dgae-Uff. VIII, Roma, August 30, 1965, Incontri, colloqui e corrispondenza varia con personalità americane. 1964–1968, sf. 4 USA. Corrispondenza varia. Incontri, colloqui con personalità americane. 1965.
- 16.
ACS, Dc, c. 63, f. 4, sf. 4, Appunto di Carli per Colombo, Roma, 15 February 1965.
- 17.
Margaret Garritsen de Vries , The International Monetary Fund, 1966–1971 (Washington DC: IMF, 1976), 69.
- 18.
Humphrey replied that Washington ‘was looking for Italy’s support’. ACS, Cm, b. 44, f. 238 Colloqui 1967, Colloquio Moro-Humphrey, Roma, 31 March 1967.
- 19.
ASBI, Carte Caffè, n. 59, f. 7, ‘Riunioni di Monaco e di Washington aprile 1967’, Appunto di Caffè per il ministro del Tesoro, Roma, 12 April 1967.
- 20.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 119, Letter From Secretary of the Treasury Fowler to the German Minister of Finance (Schiller), Washington, 6 April 1967.
- 21.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 120, Memorandum From Secretary of the Treasury Fowler to President Johnson, Attachment A, Memorandum From Secretary of the Treasury Fowler to Secretary of State Rusk, Washington, 22 April 1967.
- 22.
ACS, Cm, b. 11, f. 29 CEE, sf. Varie, Lettera di Moro per Colombo, Roma, 18 April 1967.
- 23.
Historical Archives of the European Union, Florence (hereafter HAEU), BAC 144/1992 n. 182., Verbale della 26a riunione dei Ministri delle Finanze della Cee, Munich, 17–18 April 1967. France’s interest in the CRU, however, was not because it would add to world liquidity, but because it would enhance gold’s profile as an international reserve. In commenting on the outcomes of the Munich meeting of the EEC Finance Ministers, Fowler stressed US ‘disappointment’ regarding the German role (FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 120, Memorandum From Secretary of the Treasury Fowler to President Johnson, Washington, 22 April 1967). By contrast, the president’s deputy special assistant for national security affairs Francis Bator , reminded Johnson that ‘the Italians took our side […] and should be thanked’ (Ibid., Attachment B—Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Bator) to President Johnson, Washington, 22 April 1967).
- 24.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 126, Telegram From the Department of State to the Embassy in Italy, Washington, 1 June 1967.
- 25.
These issues were: (a) whether and the extent to which the resources, accounting and administration of reserve creation should be separated from the IMF in its normal operations; (b) acceptable provisions on holding and use of the new asset; (c) the manner in which holdings of the asset should be reconstituted, that is, repaid following use; (d) decision-making; and (e) EEC proposals to ‘reform’ some aspects of the operations of the IMF, especially giving the EEC strong control.
- 26.
FRUS, 1964–68, vol. VIII, International Monetary and Trade Policy, doc. 132, Current Economic Developments, Washington, 4 July 1967.
- 27.
de Vries, The International Monetary Fund, 156. According to this scheme, participants would be asked from time to time to reconstitute their outstanding special drawing rights to the extent necessary to restore the reserve position which would have been obtained if they had used their special drawing rights in the same proportion as their total reserves.
- 28.
ASBI, Dc, c. 63, f. 6, sf. 16, Appunto di Carli per Colombo, Roma, 22 November 1968. Throughout the negotiations, the Italian diplomats successfully acted ‘on a political and technical level’ (ASBI, Dc, c. 64, f. 2, sf. 7, Appunto del Servizio Studi della Banca d’Italia - Ufficio Istituti Finanziari Internazionali, Roma, 15 November 1968), to the extent that President Johnson praised Colombo and Carli for having played ‘an important and vital role’ (ACS, Cm, b. 31, sf. 8 ‘Messaggi Johnson’, Messaggio di Johnson per Moro, Washington, 31 December 1967).
- 29.
Barry J. Eichengreen , Globalising Capital: A History of the International Monetary System (Princeton: Princeton University Press, 1998) 169–174.
- 30.
ACS, Dc, c. 63, f. 6, sf. 14, Appunto di Carli per Colombo, Roma, 18 November 1967.
- 31.
Until that moment, the Federal Reserve was required to maintain a 25% gold backing for all notes.
- 32.
Guido Carli , Cinquant’anni di vita italiana (Roma/Bari: Laterza, 1996), 235–236.
- 33.
Ibid., 239.
- 34.
As the Italian ambassador Egidio Ortona reported, the Americans ‘praised’ the Italians for the two-tier system proposal which ‘had literally dominated the discussions’ (ACS, Cm, b. 31, f. 64 ‘Incontri, colloqui e corrispondenza varia con personalità americane. 1964–1968’, sf. 4 ‘Usa. Corrispondenza varia. Incontri, colloqui con personalità americane. 1965’, Telegramma di Ortona per Mae, Washington, 17 March 1968).
- 35.
The main arguments introduced by the Bank of Italy which caused most of the criticism were the unspecified amount and duration of the financing, as well as the collective guarantee of the risk of the transaction itself. These two ideas were seen as rather ambitious by many national delegations, since it was considered that a similar mechanism was far from the possibilities of pure cooperation between central banks. The ‘Carli plan’, studied in two different meetings at the Bank for International Settlements between December 1968 and January 1969, was later rejected in early February by a Group of Ten formal statement, in which the governors of national central banks considered the existing resources adequate to alleviate the impact of speculative movements of funds on reserves.
- 36.
Conferenza del Governatore della Banca d’Italia ‘Il lungo cammino verso l’unificazione dell’Europa’, Roma, 7 June 1972, in Carli, Scritti e Conferenze (1970–1971), V:92.
- 37.
Ibid., Intervento del Governatore della Banca d’Italia, Roma, 30 October 1971, 442.
- 38.
ACS, Cm, b. 16, f. ‘Questioni Cee. Settembre 1971’, Lettera di Ortona per Moro, Washington, 28 August 1971.
- 39.
Italy’s foreign minister Aldo Moro agreed on this policy, commenting that the Italians ‘should say something to the Americans as soon as possible’, Ibid.
- 40.
ASBI, Dc, c. 70, f. 2, sf. 4., Appunto di Carli per Preti, Roma, 2 September 1971.
- 41.
ACS, Cm, sd, b. 24, f. 513, ‘Discorsi e dichiarazione del ministro degli Affari Esteri On. Aldo Moro . Anno 1971’, Intervento di Aldo Moro al Consiglio ministeriale Cee, 20 September 1971.
- 42.
ACS, Cm, sd, b. 24, f. 513, ‘Discorsi e dichiarazione del ministro degli Affari Esteri On. Aldo Moro . Anno 1971’, Intervento di Aldo Moro alla Commissione Esteri del Senato, Roma, 28 September 1971.
- 43.
ASBI, Dc, c. 65, f. 2, sf. 7, Appunto di Carli per Colombo, Roma, 19 December 1971.
- 44.
This measure followed the previous 8% devaluation after the Smithsonian Agreement.
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Caviglia, D. (2018). From Interdependence to Unilateralism: Italy and the Evolution of Foreign Monetary Cooperation (1958–1973). In: Varsori, A., Zaccaria, B. (eds) Italy in the International System from Détente to the End of the Cold War. Security, Conflict and Cooperation in the Contemporary World. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-65163-7_7
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