June 11, 1976
Page 17626
Mr. MUSKIE. Mr. President, I rise in general support of Senate Concurrent Resolution 105, which expresses the sense of Congress regarding democracy in Italy and Italy's participation in our most important mutual security alliance, the North Atlantic Treaty Organization.
Political and economic conditions in Italy are today placing the country under enormous strain. It is reported that the Italian people are demoralized and defeatist about the crisis they are in. Not only is the question being raised about whether the Communist Party will enter the next government, but whether the modern Italian State itself can survive. Only the Italian people — not Europeans, Americans, or Russians — will decide in an open and free election on June 20 and 21 who will and will not take over the reins of leadership in Rome. It is my hope, and I know this is shared by my colleagues, that free institutions will be maintained no matter what the election outcome will be. This proposition is of utmost importance to the United States. As Senate Concurrent Resolution 105 states, the United States and Italy "hold in common ... the ideals of freedom and democracy."
All of us are conscious of the importance of Italy's continued participation in the mutual security NATO alliance which remains the centerpiece of American national security policy. The basic purposes of NATO are twofold: To protect the security of member countries and to promote the values which are common to Western civilization.
Section 3 of Senate Concurrent Resolution 105, however, concerns me, and I would like to discuss why. This section makes clear that Italy's friends and allies should stand ready to help in a common effort to provide financial assistance to Italy. The resolution refers specifically to the financial support fund which was set up by the OECD's 24-member governments on April 9, 1975. I want to point out to the Senate that Congress has not authorized the United States to participate in this fund — and for good reason. There is legislation being considered (S. 1907) which would allow the Secretary of the Treasury to issue an individual guarantee up to $6.7 billion for fund borrowing or to participate in a collective guarantee by all fund members for another member. Under such guarantee arrangements, the United States would be obligated to make transfers to the fund only in the event of default by a borrower and subsequent call on the U.S. guarantee.
The Committee on Foreign Relations has already reported favorably S. 1907. It is now pending before the Committee on Banking, Housing and Urban Affairs, a markup scheduled for the end of this month. This is an important measure; it has serious diplomatic and economic implications; it potentially involves an enormous sum of Federal funds. As a loan guarantee, financial support fund moneys would be exempt from backdoor spending restrictions in the Budget Act of 1974. This means that such program, with liabilities of the magnitude proposed, could have significant impact on future budgets.
There are other established means available by which the United States and our allies can help out a close friend. For instance, there is the "general arrangements to borrow" of the International Monetary Fund. Also, there is the "currency swap," an arrangement which was utilized just this week in support of the united Kingdom when the Federal Reserve System and the Treasury Department joined to participate with central banks of the group of 10, Switzerland, and the Bank for International Settlements in making available to the Bank of England standby credits totaling $5 billion.
For this reason, I want my colleagues to understand that I do not consider Senate Concurrent Resolution 105 anything more than a sincere, but general expression of support for and American faith in our Italian friends. In no way, however, does section 3 bind this Senator nor commit this Congress to authorizing U.S. participation in the financial support fund until the Senate and House Banking Committees have taken a hard and thorough look at the administration's request and, if the bill is reported favorably, we have deliberated over and debated it here.