ITALY’S FOREIGN POLICY REGARDING GERMAN REPARATIONS, HUNGARY, BULGARIA, AUSTRIA, YUGOSLAVIA, TURKEY, RUSSIA, POLAND AND OTHER COUNTRIES
Speech delivered at the Senate on 8th June 1923.
Honourable Senators,—The speech that I have the honour of delivering before your illustrious Assembly may appear analytical, because in it I propose to touch on several questions and to speak decisively upon several problems, especially with regard to internal policy.[[13]] By this I do not delude myself to be able to convince those who are my opponents in malâ fide, nor to disperse completely the small opposition which nourishes itself on detail, and is the effect of personal temperament.
[13]. The speech on Internal Policy here referred to will follow this one on page [306].
You will not be surprised if I begin with foreign policy, even if it happens that this is the field in which serious and founded opposition does not exist, and it may be legitimately said that our policy is endorsed unanimously by the nation.
As I have already said on other occasions, the foreign policy of the present Government is inspired by the necessity for a progressive revaluation of our diplomatic and political position in Europe and in the world. It is a fact that, except for territorial acquisitions bounded by the Brenner and the Nevoso, frontiers wrested by long and bloody wars, Italy was excluded in the Peace of Versailles and other successive treaties from all other benefits of an economic and colonial nature. Solemn pacts signed during the war have lapsed and have not been replaced. The position of inferiority assigned to Italy has weighed and still weighs heavily on the economic life of our people. It is useless to dwell upon recriminations of the past. We must rather seek to regain the ground and time lost. There is no doubt that from October to to-day the situation has notably improved.
The other Powers, whether allied or not, know that Italy intends to follow an energetic and assiduous policy for the protection of her natural and vital interests, intends to be present wherever, directly or indirectly, they are at stake, because this is her right and her definite duty; but at the same time she is in favour of that line of conduct in general policy which tends to bring back as quickly as possible to a normal state the economic situation of our continent. Italy, who too is marching rapidly towards her readjustment, sees this re-birth continually disturbed by general outside factors. There is, therefore, a definite Italian interest in hastening the pacific solution of the European crisis.
The Position of Italy and Reparations. All such crises, since the Treaty of Versailles onwards, have been dominated by the one problem: Reparations. In the face of this problem the fundamental position of Italy is as follows:
1. Germany can and must pay a sum which now seems universally fixed and which is very far from the many hundreds of milliards talked of on the morrow of the Armistice;
2. Italy could not tolerate territorial changes which would lead to a political, economic or military hegemony in Europe;
3. Italy is prepared to bear her quota of sacrifice, if it is necessary to obtain what is called European reconstruction;
4. The Italian Government maintains to-day more than ever, above all after the last German Note, that the problem of reparations and that of Inter-Allied debts are intimately connected and are in a certain sense interdependent.
There is no doubt that the occupation of the Ruhr has contributed to render the crisis of the Ruhr extremely acute, and therefore to a certain extent hastened a solution.
It will not be inopportune to recall, considering the rapidity of events, that the French and Belgians went to the Ruhr on account of the declarations of a series of failures of the supplies in kind by Germany, admitted also by England, at any rate as regards that of wood, and the failure of the Conference of Paris.
It is certainly worth while to fix exactly in their essential lines the main features of the Italian, English and German projects, in order to have a picture of the situation as regards its agreements and divergencies, and to see what conjectures we can form as to a possible settlement. This will also serve to explain why Italy was not able to accept the Bonar Law scheme at Paris, and why she had to reject the recent Cuno-Rosenberg Memorandum.
The Italian project reduced the German debt to fifty milliards of gold marks, proposed a moratorium of two years, during which Germany would continue the supply of reparations in kind, accepted the distribution of German payments according to the quotas fixed at Spa, by which the Italian quota was put at five milliards of gold marks, fixed the payment of one part of the “C” bonds by means of the security given by the other ex-enemy States, used the remainder of the “C” bonds to settle the debt to America, agreed to the taking of economic pledges as a guarantee of the German payments, and finally, as regards the payments of the reparations owed by Austria, Bulgaria and Hungary, asked for a pledge for the acceptance of the proposals which England had deferred putting forward—proposals, that is, of annulling those debts.
The Italian quota of reparations, which the Italian project fixed at five milliards of gold marks, was thus reduced in the English project to less than half; whilst cancelling the bonds, it partly abolishes to our detriment German solidary responsibility for minor ex-enemy debts and rendered impossible the execution of the agreement of March 1921, which ensures important advantages to Italy upon the basis of the “C” bonds. The larger percentage reserved on the seventeen milliards, representing the interest of the moratorium capitalised to 1923, could not be used for the payment of American debts, in consideration of the aleatory nature of these seventeen milliards.
I do not recall all this to reopen discussions, but only to make clear the main outlines of that which was and remains a noteworthy attempt to find a solution for this grave problem; an attempt which contains worthy elements which can be usefully taken up again in case of a definite settlement.
The conclusion of an agreement between England and America on the problem of debts—the work of the then Chancellor of the Exchequer, Mr. Baldwin, to-day Prime Minister, followed shortly after the presentation of the English project.
Any idea of this debt being itself cancelled, or even of a simple compensation through the payment of reparations, is excluded from this agreement. The obligation to pay, although facilities may be accorded concerning both the number of years in which it must take place and the interests due, is solemnly affirmed and put into execution. In England the Speech from the Throne strongly emphasised this agreement. Even taking into account the diversity of economic strength and the totality of sacrifices borne, it could not remain without effect upon the importance of the whole question for the other European Powers.
Analysis of the German Project. If we compare the English and Italian projects with the German, the inacceptability of the latter appears evident. As is known, one of the fundamental points of the last German project concerns the consolidation of the actual debt of Germany, especially in kind, at the figure of twenty milliard gold marks, with an additional ten milliards, the payment of which depends upon the decision of an International Commission. Deducting the interest, these twenty milliards are reduced to fifteen, and the sums necessary must be found by international loans; and in the very probable eventuality that by 1927 the twenty milliards have not been subscribed, an annuity will be paid which represents five per cent. interest plus one per cent. for the redemption of the loan. Finally, in the German project any provision or regulation for the guarantees demanded is lacking. The total German debt, which in the English and the Italian projects is fixed at the figure of fifty milliards, in the German project is reduced to less than a third, and it is difficult, if not impossible, to determine in it the Italian quota and the sacrifice demanded from Italy.
In view of the representations, especially of England and Italy, Germany has recognised her proposals as insufficient, and yesterday the German Ambassador, Neurath, presented to me the new German Note, on the contents and nature of which I cannot pronounce an opinion for evident reasons, as in consequence of this Note diplomatic action with all the Allies must be taken up. I will only say that the German Note no longer demands the preliminary evacuation of the Ruhr as a condition for negotiation. This might make us believe in a renunciation on the part of Germany of that passive resistance, the utility of which—even for German aims—appears ever more doubtful, and whose cessation would help towards a more rapid attainment of a solution.
Italy and Hungary. But the problem of reparations is not only Franco-German, it is also Hungarian, Bulgarian and Austrian.
It is useful to define the stage which has been reached with regard to these ex-enemy countries. The total of the Hungarian reparations, which is fixed by the Treaty of Trianon, has not yet been determined by the Reparations Commission, and Hungary up to to-day has only furnished limited supplies in kind. The Hungarian Government, alleging the disturbed economic and financial conditions of the country caused by the serious depression of the krone, has recently put forward the necessity to contract a foreign loan, which, if it is to succeed, should be guaranteed by the custom duties, by the tobacco monopoly, and, if needs be, by other resources. Hence arises the necessity for such resources to be freed for an adequate period from the claims of reparations. A Memorandum precisely to this effect has been recently presented by the Hungarian Minister in Paris to the Reparations Commission.
The Italian Government, having examined the question from a technical point of view, has deemed it indispensable to concede to Hungary the temporary relinquishment of certain resources, so that she may proceed to her own economic restoration by means of loans to be contracted abroad. Italy has, therefore, shown herself favourable to the above Hungarian request, with the addition of certain conditions necessary to guarantee her own rights, on which point she is in agreement with the British Government.
Agreement with Bulgaria for Payment. With reference to Bulgarian reparations, Italy, Great Britain and France came to an agreement on 21st March with the Bulgarian Government to facilitate the payment of her debt of 2250 million gold francs fixed by the Treaty of Neuilly, by dividing it in two parts; one of 550 millions to be paid by instalments beginning in October of this year, and the other 1700 millions not to be claimed before thirty years.
Bulgaria has pledged herself by this agreement to reserve for the regulation of her debt the revenues of her customs and has already passed a law to this effect. The agreement has also been approved by the Reparations Commission, with the reservation of our rights for the reimbursement of the expenses of the army of occupation. In fact, negotiations are proceeding with the Bulgarian Government for the regulation of this credit, which enjoys the privilege of priority over other reparations.
Our Government, animated by favourable dispositions as regards all that concerns the settlement of obligations arising from the war, has had no difficulty in accepting such an agreement.
The Loan to Austria. Fulfilling the pledge taken by its predecessors in the Protocol of Geneva of 4th October 1922, the Italian Government has co-operated with the Governments which are signatories of the Protocol, in order that the loan in favour of Austria should have a large and ready success. For this purpose the Government has consented to postpone for twenty years, which is the duration of the War Loan, her credits against Austria for the recovery of damages and for bonds of food supply, has given her own guarantee for twenty-five per cent. of a maximum loan of 585 million gold kronen, and has authorised Italian banks to contribute directly to the loan up to the maximum of 200 million lire, including the sixty-eight which Italy had previously lent to Austria, and which, by the terms of the Protocol of Geneva, should have been repaid in cash.
Putting off for a further period the exaction of Austrian reparation, and giving a guarantee and a direct and substantial contribution to the loan in favour of Austria, the Italian Government has wished to offer her co-operation towards the political independence and territorial integrity of the Austrian Republic to which the Protocol of Geneva refers, and to which the United States of America also wish to contribute, confidently subscribing for the first time to a European loan.
Relations between Italy and Yugoslavia. Italy’s political line of conduct towards the States of the Little Entente and in general towards the States recently created is substantially inspired by the necessity of exacting the respect and the scrupulous fulfilment of the treaties, because, given the present contingencies, only such a policy can produce quick and pleasing results with regard to an economic settlement of the Danubian States which would contribute to the larger one of Central Europe. On several occasions the friendly and moderate policy of Italy has followed such a course with satisfactory results.
With reference to such a policy the relations between Italy and Yugoslavia have a special importance. The clear attitude taken by the Government with regard to Yugoslavia by proceeding to the definite enforcement of the Treaty of Rapallo has strengthened our legal position, and we are able to rest any further development of our policy on a solid basis. The enforcement of the Agreements of Santa Margherita, which has been necessarily laborious owing to the large extent of the field covered, can be said, however, to proceed on the whole satisfactorily. In spite of the initial difficulties encountered in any exceptional régime, the economic system of the so-called “special zone of Zara” is already in force for the evacuation of the remaining Dalmatian territories, and the various organisations for the regulation of all the intricate questions arising out of the Agreements have been constituted.
Fiume. But naturally the most important question to solve is that of Fiume. As is known, it offers the gravest difficulties, since, in order to ensure the future of the commercial life of the town, there must be solved many complex problems of an economic nature which are often in opposition to those of a political character. Undoubtedly the recent long Parliamentary crisis in Yugoslavia, which for a considerable time forced the Government of Belgrade to confine its attentions almost exclusively to internal problems, has heavily weighed against the rapidity of the solution of such a question.
That Government has repeatedly acquainted us with its wishes to solve the question in a satisfactory way as regards the sentiments and the interests of Italy, and has also frankly made known to us the real difficulties with which the Government is faced in asking the populations interested to accept a solution in agreement with the Italian point of view.
Italo-Yugoslav Commission. With a view to ensure an atmosphere of greater quiet to the Italo-Yugoslav Commission, the Government of Belgrade has, in the meantime, agreed to transfer the seat of the Commission to Rome. The Yugoslav Delegation has arrived, and between it and the Italian Delegation, which is fulfilling its duty with a high sense of patriotism and political probity, preliminary meetings are taking place with the object of fixing certain fundamental points before resuming official discussions, so that the latter may proceed with the necessary speed without lapsing into a deplorable stagnation, which would be otherwise inevitable in such an arduous task.
The Conference of Lausanne and the definite Cession of Castelrosso to Italy. The Conference of Lausanne, which after the well-known suspension of last February resumed its proceedings on 23rd April, is slowly completing them through the no small difficulties of various kinds caused by the delicacy and complexity of the questions under examination. The course followed by the Italian Delegation under any circumstance has always been inspired by the most calm and impartial attitude, and its efficacy has been recognised and generally appreciated at its just worth.
Italy cannot help considering as her vital interests the speedy restoration of a normal state of trade in the East, as well as the economic development and general progress of all the peoples living on the shore of the Eastern Mediterranean.
Although all the questions under discussion have not yet been solved at Lausanne, on some of them, however, which more directly affect our country, an agreement, satisfactory on the whole, has been reached. The Government of Angora has explicitly withdrawn the objection regarding the cession of the island of Castelrosso to Italy, the possession of which on our part could in no way justify an eventual suspicion of Italian aggressive aims with regard to Turkey. Our flag, which has already been saluted from the moment it appeared in the island as a symbol of peaceful well-being, will in the future continue to protect a population which by plebiscite has entrusted itself to us.
The Juridical Protection of Foreigners in Turkey. The Italian Government has also obtained the cancellation of those clauses, with regard to our colonies in North Africa, which the agreements concluded after the Libyan War had left in existence, and at the same time the interests of Libyan subjects residing in Turkey, whose rights have been equal to those of Italian citizens, were opportunely protected.
From the opening of the Conference the question of the juridical protection of foreigners has been of the greatest importance. The Conference has agreed in fixing the limits of such protection, including it in a formula which establishes for a period of five years the appointment on the part of the Turkish Government of foreign judges, who are authorised to receive complaints of the sentences and of the proceedings of Turkish magistrates.
At Lausanne there still remain under discussion certain important questions of general interest, such as those relative to the management of the Ottoman Public Debt and others of an economic nature, which I hope may be quickly solved.
Relations between Italy and Russia. The present relations with Russia are regulated by the Italo-Russian and Italo-Ukraine Agreements of 26th December 1921. A few days ago the projects for the conversion into law of the Royal Decree of 31st January 1922 were presented to Parliament, by whom the said agreements had been approved, though some opposition had been offered to their practical application. This opposition gave the Russians a pretext for violating the agreement. We mean to remove these obstacles in order to render easier the economic relations between the two countries and pave the way for an understanding resting on a wider basis without excessive illusions, but also without dangerous prejudices.
Relations between the two countries, which possess different economic systems, present enormous difficulties. They are, however, not unsurmountable if on both sides there is a good-will to overcome them. Italian policy towards Russia is clear and cannot give rise to misunderstanding.
The presentation before Parliament of these decrees represents another proof of our intentions and gives us the right to expect from the Government of Moscow the scrupulous fulfilment of the pacts, the execution of the pledge taken to abstain from any act hostile to our Government, and from whatsoever direct or indirect propaganda against the institutions of the kingdom.
Relations between Italy and the United States. I do not think it is necessary, considering the brevity of this speech, to enter into further detail. I will only say that the relations between the United States and Italy are particularly cordial, and I am glad to add that both the Government and the American people have fully understood the new political situation in Italy.
Relations with Poland and other Countries. The initiative of Italy for the definite determination of the Polish frontiers has cemented even more closely the bonds of cordial friendship which have united the two countries for centuries. Their collaboration continues to be strengthened on economic as well as on political grounds. In these last days the Polish Government has placed important orders with Italian manufacturers.
The conversations and the personal relations I have had with the Ministers of Austria, of Roumania, of Hungary, the recent journey of H.M. the King of England, the commercial treaties concluded and to be concluded, are other signs of that progressive revaluation of our diplomatic position which I referred to at the beginning of this speech.
Improvement of the Diplomatic and Consular Services. The Fascista Government, always with the object of this revaluation, as soon as it came into power instructed its representatives abroad to direct their policy outside the confines of the country to the renewed life of Italy, and to face immediately the problem of the means and the men for that end. In fact, the administration of Foreign Affairs, in the face of so many difficulties from outside, already possessed a great difficulty in her own constitution, due to the scanty number of its elements. The tools of our work, which is so delicate abroad, had to be renewed, and rendered suitable, as regards the increase in number of officials and the new conditions of Italy, for the momentous task which they are required to perform.
Instructions have, therefore, been given with effect from the first days of November for the reorganisation of the competition for the Diplomatic and Consular Services, and for Interpreters.
In conclusion I wish to repeat that Italian foreign policy, while it intends to safeguard national interests, wants at the same time to constitute a factor of equilibrium and peace in Europe, and by such a policy I think I interpret the tendencies and the needs of the Italian people. (Applause.)