Can you confirm the lower cup is loose? The 660 probably won’t help if it’s snug in the head tube.

Could be the wrong sized bearings.

A replacement Stronglight headset for that vintage, if you care about keeping it original, won’t be cheap. You’re probably looking at $100 minimum, if you can find one with decent races.

Goid looking bike, by the way. I always liked the look of Libertas bikes.