Positive Plan

To Washington last week Italy's Foreign Minister Giuseppe Pella brought something that is currently in short supply in the U.S.: a new, positive foreign-policy idea. Under a plan advanced by Pella, the U.S. and the 17 members of the Organization for European Economic Cooperation would set up a joint fund for easy-term economic development loans to Middle East countries.

The U.S. would contribute to the fund the sums that European countries repay on their Marshall Plan loans; European countries would kick in amounts equal to 20% of their repayments to the U.S. Estimated total available: $100 million a year. In addition, private capital would be encouraged to join in. To manage the fund, the Italians suggested a nine-man international board to be chaired by a representative from the U.S.

Pella was careful to point out that the Italian plan would not replace the Eisenhower Doctrine's standing offer of help against Communist aggression in the Middle East, but would supplement the doctrine's deterrence with "positive" peacetime aid. By including all O.E.E.C. countries--four of them (Austria, Ireland, Sweden, Switzerland) not members of NATO--the plan would avoid identification with NATO or with the Baghdad Pact, both primarily military alliances and both widely disliked in the Middle East.

Without quite rejecting the Italian proposal outright, the State Department raised a couple of negative-thinking objections: 1) the Middle East would look upon the fund as an extension of NATO in spite of everything, 2) European countries would be repaying Marshall Plan loans in their own currencies, so the proposed fund would have no dollars; accordingly the Middle East countries would probably use the loans to buy goods and services from Europe, not from the U.S.

European reaction to Italy's proposal was generally favorable. But without U.S. participation, it was unlikely that idea would amount to much.

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