Italy is playing a crucial role in the NATO effort to correct the imbalance in nuclear forces in Europe. In our discussion today Prime Minister Craxi and I reviewed the INF negotiations between the United States and the Soviet Union and reaffirmed our goal -- an equitable and verifiable agreement. If Soviet intransigence continues, we're committed to NATO deployment of U.S. missiles. We remain hopeful that an understanding will be reached, and we'll continue negotiations even after initial deployments. Indeed, for 2 years the United States has negotiated in good faith while the Soviets have continued to deploy theater nuclear weapons.

The Prime Minister and I also reviewed developments in other arms control fields. The United States and Italy share a common approach to the forthcoming Conference on Disarmament in Europe, where we will be attempting to reduce the risk of surprise attack in Europe by improving observation capabilities and by providing a better understanding of military forces and activities. We're striving for reductions of conventional forces and to establish parity in ground forces in Central Europe. I expressed to the Prime Minister our deep appreciation for the positive contributions Italy is making to Mediterranean security and to the search for peace in the Middle East.

Italy was among the first nations to offer its forces for service in the Sinai to help implement the historic Camp David accords. Italian and American soldiers now are bearing the difficult burdens of peacekeeping in Lebanon. We are cooperating there not only in keeping the peace but in making peace, as well. The Prime Minister and I reviewed our common efforts to promote genuine political reconciliation within Lebanon and to work toward the restoration of Lebanese sovereignty throughout that troubled nation. I cannot overemphasize the importance of the Italian diligence in this crucial effort.

We examined the world economy, discussed our respective efforts to deal with the economic challenges we face. I expressed our understanding of the difficult economic problems Italy presently confronts and our support for the tough but essential measures the Italian Government is taking to restore balanced and noninflationary growth. I expressed the hope that our own strong recovery would help Italy lift itself out of its present recession.

I've been especially impressed by Prime Minister Craxi's commitment to attack organized crime and narcotics trafficking. We share a crucial interest in efforts to suppress the international traffic in narcotics. Accordingly the Prime Minister and I have agreed to establish a joint Italian-American working group on organized crime and narcotics trafficking.

Prime Minister Craxi comes to our shores as an especially welcome guest. In international affairs where the element of personal trust is so essential, such meetings as this are invaluable. I'm delighted to say that the Prime Minister and I have laid the basis today for continuing the open, cooperative, and mutually helpful relationship which has been traditional between our two governments and their leaders.

The Prime Minister. I am particularly grateful to President Reagan for the warm welcome accorded me during my visit to the United States. I consider this welcome primarily as a homage to the Italian nation. I also thank President Reagan for the special attention that, together with members of his government, he has dedicated to the problems and to the views which I've had the opportunity to expose to him this morning on behalf of the Italian Government.

I, myself, have conveyed to President Reagan the message of friendship from the Government of Italy and from the Italian people to the Government and to the American people, also -- a friendship that belongs to the history of our democratic tradition as well as to the future of our two countries.

During our talks, which have been friendly and open and, I believe, reciprocally very useful, we have carefully examined -- with mutual constructive hopes -- several matters. These matters are essential to attain peace both in Europe and in the world: problems and prospects of international economy, the development of Italian-American relations, issues of common interest for industrial cooperation and for an in-depth struggle against crime and the international drug traffic connected to it.

Both the United States and Italy are firmly seeking peace, which they consider with absolute conviction the most precious gift to mankind, and are both committed to solve international problems and disputes through peaceful means. Within the framework of the Atlantic alliance, our two governments will work toward strengthening peace, aiming to maintain open prospects for negotiations in the field of disarmament and arms control so as to guarantee peace through security.

On the question of nuclear balance in Europe, which presently is the most important in East-West relations, we intend to maintain the present system of close consultation and of constructive solidarity and to develop a line of combat coherent with decisions already adopted by our countries. We have followed the path of negotiations which must remain open in any case. Should a launching of the program for the modernization of NATO missile systems occur, due to the negative negotiation policy followed by the U.S.S.R. and by the Warsaw Pact, our intention is to continue to urge Soviet willingness towards serious negotiations without preconditions, aimed at achieving a reasonable agreement, providing for some means of control and some guarantees toward an equilibrium of the agreed forces at the lowest possible level, a policy of peace, which must operate in every region of the world so as to terminate conflicts and to reduce the most dangerous frictions, in full respect of the sovereignty of nations and of the rights of peoples.

In this spirit Italy intends to assure its constructive contribution by taking upon itself direct responsibilities in humanitarian and peace missions, such as is the case for the Sinai and Lebanon, aimed at achieving unity, independence, and the reconstruction of Lebanon.

However, a policy of peace must necessarily be linked to a wider international economic cooperation. This is why we have compared our points of views on the difficult period that the world economy is experiencing. In view of fostering a stable and lasting recovery, Italy and the United States must promote a further increase in the volume of their trade and cooperation which will further strengthen the excellent political relations already existing between our two countries.

Also, in view of an ever-effective fight against organized crime which is involved in international drug traffic and which is challenging and threatening our societies, a special joint commission will be set up and the necessary steps will be taken so that it may operate in the most effective way.

In our meeting today, both President Reagan and myself have reaffirmed the feeling of friendship which binds our two countries, reaffirming the commitment of our governments for the safeguard of peace.

Thank you.

Note: The President spoke at 1:28 p.m. to reporters assembled in the East Room at the White House. The remarks were scheduled to be given outside at the South Portico, but because of inclement weather the event was held in the East Room. Prime Minister Craxi spoke in Italian, and his remarks were translated by an interpreter.

Earlier, the President and the Prime Minister met in the Oval Office and held a working luncheon, together with U.S. and Italian officials, in the State Dining Room.