«The Economist», 20 gennaio 1923, pp. 88-89
At the Cabinet Council’s meeting of yesterday Signor Mussolini gave a formal denial to rumours of a project of a Continental bloc against Anglo-Saxon countries. “The bloc”, said the Premier, “simply does not exist. The Italian Government never made such a proposal, and never planned a French-Italian-German coalition against Great Britain. The importance which Great Britain has in the economic life of the European Continent would alone have forbidden this plan, to say nothing of the special relations between Great Britain and Italy”. There is thus an end to the wild talk which had been current for some days in the Italian and foreign Press about a resurrection of the ill-fated Napoleonic plan of a Continental bloc against England.
The interesting point is, however, whether there exist in Italy undercurrents of public opinion which warrant such a plan being spoken of. It would be useless to deny that, if the reception of the plan was far from enthusiastic, it met with a degree of favour in some sections of the Press, which in the common interest of England and Italy should not be ignored.
The first undercurrent is the old pro-German feeling, which was in 1914 and 1915 favourable first to war on the German side and afterwards to neutrality. Even the most obdurate pro-Germans were converted by the spectacular fall of the Austro-Hungarian Monarchy which would not have been possible without the defeat of Germany. But, now that Italy has reached her natural boundaries to the Northern Alps, a feeling is becoming vocal that Germany was, after all, a great market for several agricultural products of Italian soil, and that this market will never be recovered till Germany herself is once again producing and consuming in full swing.
On the other side, Germany was our greatest supplier of machinery, chemicals, and industrial products, and many consumers are identifying old days of cheapness with the steady flow of cheap German goods. France and England have not taken the place, as buyers and sellers of Germany. Italian producers are complaining bitterly against British duties on motorcars, 33 per cent, on key industries products, and similar hindrances to our export. Perhaps British duties are not so bad as is said, especially when their action is wholly or partially suspended in virtue of existing treaties. But they have, nevertheless, done an enormous harm, and have furnished an eagerly seized weapon to the Italian Protectionists. England is said to be preaching Free-trade to other peoples, but practicing rampant Protection at home against foreign imports. The Italian ultra-Protectionist tariff of July 1, 1922, was justified, therefore, on the score of British Protection. As in other countries, faith in the economic future of Germany was so strong in those circles which admired German thoroughness, system, strong government, plodding, industry, and inventiveness, that a large volume of marks was bought when the exchange was not unreasonably low. Warnings were in vain. It seemed impossible to people believing in the economic future of Germany that marks should not recover also. When the mark collapsed and got every day worse, it was not ascribed to the feeble financial policy of the German Government, but the responsibility was put on the shoulders of France, England, and the United States. Among some mark speculators the fall of the mark was attributed to a sort of conspiracy among gold countries, and as the franc could not be accused of fattening at the expense of the German mark it was, in some mysterious way, made out to be the fault of sterling and of the dollar.
Pre-war theories on old and new, rich and poor, nations were again in favour. Before the war it was a favourite doctrine with nationalists that new, rising nations, with a high birth rate, with an expanding emigration, with an incipient and growing wealth, such as Germany, Italy, Russia and Japan, were called to high destinies, to conquer territories, to become world-Powers. They would encounter the jealousy and the bitter opposition of old-established nations such as France and Great Britain, with great accumulated wealth, with a low or lowering birth rate, with territories exceeding the possibilities of the native population. The war of new and rising nations against old and stationary was the outcome of this theory, which was, even in pre-war times, erroneous both historically and economically; and events have demonstrated that in the world war so-called new and old countries fought side by side.
The theory is being resuscitated in a new form; countries to whom the war has given a heritage of debts should show a united front against creditor countries. And as the Continental powers, victors and beaten alike, are groaning under the weight of debts, of Budget deficits, and of devaluated paper money, they should unite themselves against the predominance of the creditor gold countries. These are nebulous conceptions indeed; but, unfortunately, the popular mind is apt to be caught by shibboleths; and it was unfortunate that at the last Paris Conference there crept out suddenly, without previous discussion, the question of the French and Italian gold sent during the war to London, and thence shipped to the United States for the sake of the so-called “pegging of the exchanges” operation. The 420 millions of gold-lire sent from the Italian Banks of Issue to London was seized upon as a proof of a determined British policy of depriving Italy of her last remnants of gold. I do not know what were the exact terms of the transaction, as they have never been officially published in full in Italy; but I do know that the pegging of the exchanges was not an unmixed good as a means of maintaining the price of the pound sterling at about 37 lire. The operation was costly; and no one would begrudge the cost if the results achieved had been good. But the public debt incurred by the Italian Government still remains, and no one can predict at what rate of exchange it will be, if ever, repaid; so that, from the exchequer point of view, the operation is not yet closed. As to private Italian purchases of foreign goods made at 37 or thereabouts, if they were closed with payment at that rate, they were good for the private Italian purchasers who bought exchange at the low artificial price at the expense of the Italian exchequer. But many payments were left in suspense by purchasers who hoped to buy exchange at a still lower price, and many losses were incurred when the peg was removed and exchanges rose to 100 and over.
If you add that in Italy at the present time nationalism is in the ascendant; and nationalism means colonialism and accusations against Allied Powers who made vast colonial acquisitions in Africa, Mesopotamia, Oceania, and left nothing to Italy, you will have an almost complete picture of the causes which are unmistakably swinging the pendulum of Italian public opinion against the Allies.
The movement however is, as yet, superficial, and has an academic tinge. As Mussolini’s pronouncements show, responsible statesmen are cautious, and do not favour a fundamental change of our policy. Editors of leading newspapers examined in a very critical spirit the Continental bloc plan, when it was first rumoured. It has been, from 1860 onwards, a fundamental principle of Italian foreign policy to maintain friendly relations with Great Britain. Both nations have the same interest –i.e., not to let Europe become the prey of a paramount Power, be it called Napoleonic Empire or Hohenzollern Germany. A paramount Power is alike distasteful to Great Britain and Italy. Both have to fear much, the first for the continuity of her world power, the second for her national independence from such a European ascendency. The equilibrium of the various European Powers was destroyed by the world war, and is bound to be re-established by some means or other. Italy will work with England if such an end is in sight. But she needs to be previously freed from economic fetters.
The position of Italy as to reparations is somewhat different from France’s position. France needs a certain amount of reparation in addition to a clear slate in the matter of inter-Allied debts. Italy needs, first and foremost, the cancellation of State debts to Great Britain and United States. Once this matter can be righted, Italy will very easily give her assent to a plan which should greatly decrease Germany’s obligations. Italians always looked on their share of German reparations with the utmost scepticism. It will not cost much to them to make renunciations in this matter. But they are sorely grieved at the thought of being debtors for 22 or 23 billions of gold lire to peoples who were our allies in a common fight for world liberty. If other grievances are sectional, academic and superficial, this one grievance is strongly felt by all classes. Italians do not appreciate the game of give and take in this matter. The only policy which would disperse the clouds which have been allowed to accumulate on the British-Italian sky is a straightforward cancellation of war debts. Nothing short of this will satisfy average public opinion in Italy. Italians know that they have powerful allies who in England have embraced the cause of the complete cancellation of public debts.