ITALY

Although anti-war feeling in Italy appears to remain strong, the
following indications incline us to believe that Italy may well
enter the war against us at an early date.

(1) Reports from His Majesty's Minister at the Vatican [2]
confirming that Signor Mussolini will give no assurances as
regards his future actions.

(2) Whipping up of anti-British feeling in Fascist circles and
Italian youth.

(3) Presentation of report on our contraband control. This
suggests that Signor Mussolini has now resorted to propaganda
material which, more than anything else, may be calculated to
rouse not only the Fascist but Italian feeling as a whole to the
point of war.

There is reason to believe that Signor Mussolini's decision, at
any rate as regards the exact time of his move, whatever form it
takes, may still rest on the outcome of fighting on the West.

While he might be tempted to take up arms on the strength of some
initial reversals which Germany, particularly the German Air
Force, may inflict on the Allied Forces, most recent conversation
between Count Ciano [3] and His Majesty's Ambassador at Rome [4]
indicates that there is perhaps a chance that he may wait some
three or four weeks until more positive and decisive results show
where the advantage really lies.

In view of the present situation we are considering with the
French Government the question of taking further precautionary
measures in the Mediterranean.