NATIONAL INTELLIGENCE DAILY WEDNESDAY 6 JANUARY 1982

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005065433
• Release Decision: IPPUB U
• Document Page Count: 17
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00446
• Publication Date: January 6, 1982

 OD
Poland: Debt Problems Unresolved . . . . . . . . . . . . . i
Libya-Ghana: Overture Planned . . . . . . . . . . . . . . 1
Egypt-France: Motivations Behind Aircraft DeaZ . . . . . . 2
Italy-Poland: Communist Party Criticism . . . . . . . . . 3
Western Europe: Growing Unemployment Problem . . . . . . . 4
. . 5
NATO: Canada Approves Spanish Accession . . . . . . 5
%f Israel: Government Presence in East Jerusalem . . . . . . 6
6 January 1982
 A Polish official has denied media reports that Poland has met
its interest payments to Western banks. The government, meanwhile,
is trying to create the impression that it is holding talks with
Solidarity and has dissolved a student organization close to the
union. Some Polish military units that were called on to implement
martial Law are vrenarina to rptinrn. to thp,.r rrarr~.Gnnc
The vice president of the Polish Commercial Bank
yesterday denied reports that Moscow recently helped the
Poles meet interest payments due Western banks and indi-
cated that he did not expect Soviet funds in the near
The debt rescheduling agreement between Poland and
been reported by banks in the past few days.
final week of December, and additional payments have
Western banks called for all interest due through
14 December to be paid. On that date Poland indicated
it was still unable to provide $350 million of the amount
due. Warsaw apparently paid about $100 million in the
The patience of the Western banks determines how
long Warsaw has to meet the remainder of its obligations.
Poland has avoided default despite failing to meet sev-
eral deadlines and conditions set by the banks, but
the risk increases that a single creditor will declare
Major Western banks are scheduled to meet tomorrow
and on Friday in London to discuss the reschedulin
impasse.
Top Seeret
6 January 1982
 Warsaw's most immediate financial problem is to wrap
up the private debt rescheduling agreement for 1981, but
even if that is concluded Poland still will be technically
in default. Negotiations for debt relief from Western
overnments anA banks for l Q82 have not vet be
un F_
g
g
1 Polish radio yesterday reported that the government
,,was holding talks with Solidarity "activists." It is
unlikely that any of the union's prominent leaders before
martial law were involved. The regime, however, has had
some success in finding lower level union officials who
j are willing to recant.
The government probably hopes to confuse the popu-
lation with such reports and may be thinking of creating
a new but passive Solidarity. Warsaw also has formally
abolished the Independent Student Organization, Soli-
darity's equivalent on campus.
January 19
 Soviet Commentary
According to Moscow Radio, Polish Foreign Minister
Czyrek will visit Moscow in the first half of this month.
Since Czyrek probably cannot provide the Soviets addi-
tional insights concerning the present situation, the
+- V, t
ur ose
or e
i b 1 t t' 1
/ p p
r
L.
p may e on y o con roue a ong
tradition of formal bilateral exchanges held at this
3 ~ time of year.
In an article commemorating the 40th anniversary
of the birth of the Polish Communist Party, Pravda yester-
day again reminded Premier Jaruzelski that the party's
supremacy must at some time be restored. Pravda high-
lighted an earlier statement by Jaruzelski regarding the
special role of the party under martial law and pointedly
employed his party title.
iii
6 January 1982
 LIBYA-GHANA: Overture Planned
Libya apparently is attempting to make its first contact with
'
Ghana's new military government.
Although Qadhafi is pleased with the overthrow of
President Limann's moderate, pro-Western government, no
hard evidence is available of direct Libyan involvement
in Rawlings's latest coup.
As political and economic pressures mount on the
shaky new regime, Rawlings may be forced to turn to
Libya and other radical African states for support.
Rawlings is known to have some radical advisers who are
urging him to adopt such a policy.
Shortly after Rawlings's coup in June 1979, he re-
buffed the overtures of a Libyan delegation, but after
relinquishing power four months later he maintained loose
3 contacts with Tripoli. In September 1980, Rawlings
visited Libya and seemed favorably impressed.
Rawlings's flirtation with Tripoli helped prompt
the Limann government to expel the Libyan People's Bureau
from Accra and to conclude that Rawlings was receiving
L funds from Libya. The Libyans had been urging the Limann
J government to allow them to reestablish diplomatic rep-
resentation, and they may hope their offers of aid will
enable them to reopen their offices soon.
6 January 1982
 EGYPT-FRANCE: Motivations Behind Aircraft Deal
from France reflects Cairo's desires to diversify its arms su Z
and to encourage the US to accelerate military deliveries.
The Egyp
tians
have been increasingly disappointed
with the high
costs
and long leadti
mes associated with
'
purchasing ar
US officials
ms fro
on Sat
m the US. Presi
urday that there
dent Mubarak told
is growing criticism
3
within hi
s ar
med fo
rces of the US m
ilitary assistance
Mubarak also said that some officers now claim
that US aid is as unsatisfactory as Soviet assistance
was in the early 1970s. In addition, many Egyptian
opposition groups have charged that Egypt's close ties
to the US are undermining the country's nonaligned status.
A lack of funds apparently prevented the purchase
/ of more Mirage 2000s. The French Government offered
$1 billion in financing at 9-percent interest to clinch
the deal, which probably includes other equipment and
o l
r
-1, - 4
4-
e
c
o
The two governments also agreed to set up a bilat-
eral military committee to discuss future Egyptian arms
purchases as well as coproduction. Mubarak may hope
to set the stage for additional purchases during his
visit to France early next month.
France has had difficulty in attracting buyers for
the Mirage 2000, and it attaches great importance to
this first foreign sale. The Dassault Company has yet
to begin series production or finish developing and test-
ing some of the aircraft's components. As a result,
Egypt is not likely to take delivery until 1983 and then
only if aircraft are diverted from French Air Force
orders.
Without such diversions, delivery probably would
not begin until the mid-1980s. In any event, the acqui-
sition of yet another advanced aircraft will tax further
I Egypt's already overburdened support capability.
Egypt's decision to purchase 20 Mirage 2000 fighter aircraft
2
January 1982
 ITALY-POLAND: Communist Party Criticism
The Italian Communist Party's condemnation last week of events
in Poland was its harshest indictment of the Soviet system to date,
but it will be some time before the implications for relations be-
tween the party and the Soviets and for domestic affairs become
Italian Communist leaders tried to reconcile con-
flicting demands, underscoring their own democratic pre-
tensions with the public while trying to avoid creating
irreparable divisions in the party. Most of ,them are
still reluctant to raise the possibility of a break with
the Soviets for fear of losing the 25 percent of the
rank and file that remain committed to Moscow. They
have begun an extensive campaign to explain their posi-
tion on Poland to the party membership.
The Soviet Ambassador to Rome has publicly stated
Moscow's disapproval of the Italian party's statement.
v The Czechoslovak press for the first time is criticizing
party chief Berlinguer personally for opportunism and
"reactionary Atlanticist" views.
The left-leaning national dailies interpret the
party statement either as another major step away from
the Soviets or as an open break. The moderate and right-
n
leaning press, however, is either criticizing the Com-
munist Party for being slow to develop its position or
is emphasizing the statement's ambiguities.
The party stand on Poland is likely to complicate
the maneuvering among the five parties that support the
government of Prime Minister Spadolini. Socialist leader
Craxi is exploiting the Communists' dilemma to gain new
support for his party by denouncing the statement as
weak and contradictory.
Christian Democratic Party secretary Piccoli is
suggesting that the time has come for another look at
"the Communist question," probably hoping to strengthen
his support among the left wing of his own party and
dampen Craxi's interest in early elections. Even raising
"the Communist question," however, will further strain
the coalition, which is struggling to cope with the kid-
naping of General Dozier and with the troubled economy.
l
3
6 January 1982
 WESTERN EUROPE: Growing Unemployment Problem
The grim unemployment outlook will make a West European deci-
sion to impose economic sanctions on Poland or the USSR all the
more difficult.
Jobless ranks in Western Europe have increased over
the past 18 months to more than 10 million workers, and
rising public sector deficits will constrain governments
in introducing job-creating measures. Economic sanctions
probably would lead to a drop in production and more unem-
ployment, particularly in the hard-hit steel and machinery
Unemployment in Western Europe will rise at least
through 1982. The OECD recently forecast that average
unemployment among its European members will increase
from 9.1 percent in the second half of this year to 9.9
percent in the first half of 1983. The period of rapid
labor force growth will continue through the mid-1980 ,
and unemployment could continue rising through 1985.
A major shift to expansionary monetary and fiscal
policies to encourage new business and employment would
increase still-high inflation rates while adding to
balance-of-payments problems. The French experiment with
expansion will be watched closely by others anxious to
see the trade-offs. Other possible steps include sub-
sidizing employers who take on additional workers, lower-
ing minimum waaes in real terms, and encouraging job-
sharing.
Some measures to increase employment may require the
cooperation of business and labor. Unions in West Germany
have hinted at reducing wage demands in exchange for
government action to create jobs, while in Spain unions
and the employers' association have agreed to swap a
reduction in real wages for an increase in employment.
The policies actually adopted will vary greatly, depending
on the political leanings of the parties in power as well
as on the economic constraints under which they are
operating.
Over the long term, however, Western Europe may face
a labor shortage. By the end of the decade, labor growth
will almost cease in Italy, Switzerland, and Denmark; in
West Germany, a long-term decline will begin. Many of
the steps that might reduce unemployment now--a lower
retirement age, longer vacations, a shorter workweek--
could backfire a decade from now by aggravating labor
shortages.
4
6 January 1982
 NATO: Canada Approves Spanish Accession
Canada has become the first member of NATO to ratify
Spain's accession to the Alliance, but delays in West
Germany spell trouble for the Spanish application. Unlike
most other NATO countries, Canada's ratification only re-
quired cabinet approval and not parliamentary action.
West German Foreign Office officials, however, say that,
while favorable action on Spanish entry is assured, their
complicated constitutional process and built-in bureau-
cratic hurdles mean there is little possibility that
Spain's accession will be ra '
ministerial meetings in May.
the door for Greece and the Netherlands, which previously
had raised procedural objections to Spanish entry, to
draw out their own ratification procedures. Prolonged
public debate in Athens, The Hague, or other Allied
capitals over Madrid's application would embarrass the
Spanish Government, heighten opposition to NATO member-
ship in Spain, and perhaps lead Madrid to withdraw its
application.
Delays in West Germany would open
January 19 2
 ISRAEL: Government Presence in East Jerusalem
Israel is continuing its efforts to strengthen its
claim to sovereignty over a unified Jerusalem by moving
government offices to areas of the city occupied in 1967.
One ministry moved its headquarters to East Jerusalem
this week, and according to press sources, others will
f follow later this year. International pressure appar-
vently persuaded Prime Minister Begin in the summer of
1980 to set aside plans to transfer his office from West
Jerusalem. Begin maintains a suite in a recently com-
pleted office complex in East Jerusalem, however, and
,could e move with little notice.
6
6 January 1982