CURRENT INTELLIGENCE BULLETIN - 1956/07/19

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03185123
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: July 19, 1956

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CURRENT
INTELLIGENCE
BULLETIN
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07:13/717/A
Copy No 105
DOCUMENT NO.
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DATE. .F1EVIEWER:
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OFFICE OF CURRENT INTELLIGENCE
� CENTRAL INTELLIGENCE AGENCY
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TOF'-SECRE-T
Nov Ni.pe
CONTENTS
RESIGNATION OF HUNGARIAN PARTY LEADER RAKOSI
(page 3)0
2. SOVIET AMBASSADOR DENIES FINNISH BORDER ADJUST-
MENT POSSIBLE NOW (page 4).
3. LANS FOR ECUADORAN COUP BY 22 JULY
(page 5).
4. NEW SYRIAN CHIEF OF STAFF APPARENTLY CO-OPERAT-
ING WITH EGYPT (page 6).
5. SOUTH VIETNAM MAY SEND EXPEDITION TO SPRATLYS
(page 7).
19 July 56
* * * *
THE ARAB-ISRAELI SITUATION
(page 8)
Current Intelligence Bulletin Page 2
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N.= CONFIDENTIAL
1. RESIGNATION OF HUNGARIAN PARTY LEADER RAKOSI
The removal of Matyas Rakosi from his
post as Hungarian party first secretary
and from his position on the politburo on
18 July, coupled with the election of new members to the
politburo, represents a clear-cut gain for the moderate fac-
tion of the party. The selection, however, of economic czar
Erno Gero as the new first secretary probably reflects Mos-
cow's desire to restrain and control the rightist movement,
while simultaneously granting some of its demands. First
Deputy Premier Gero is a "hard-line" Rakosi follower and
reliable Moscow-oriented Communist.
In his acceptance speech, Gero announced
plans for an immediate improvement in the standard of living
and stated that an open letter of apology would be sent to the
Yugoslays for past "slanders."
Although apparently supporting Rakosi at
least until June, Moscow may have reluctantly decided that a
combination of Rakosi's inability to handle the factionalism
problem and Rakosi's traditional antipathy toward President
Tito of Yugoslavia rendered him a liability. In exchange for
Soviet withdrawal of support for Rakosi, permission for addi-
tional concessionary "relaxation" policies, and the granting
of increased moderate representation at top party levels,
moderate leaders Janos Kadar and Imre Nagy may have
agreed to sTai,ort efforts to restore party unity.
Kuhr is one of the four new members of the
politburo, only one of whom apparently represents the "hard-
line" group. Two new alternate politburo members also appar-
ently support the moderate wing.
The removal of Rakosi and the increase
in the power of the "soft-line" forces are compromise measures
which presumably have been adopted as a calculated risk, one
that is to be minimized by the selection of Gero as party first
secretary. The risk stems from the probablc creation of con-
fusion among Rakosi followers and the possible stimulation of
new and outspoken demands from the intellectuals and from the
party moderates, especially at lower levels.
19 July 56
Current Intelligence Bulletin
CONFIDENTIAL
Page 3
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'toe
2. SOVIET AMBASSADOR DENIES FINNISH BORDER
ATITINTMF.NT POSSIBLE NOW
The Finnish government interprets this
to mean that discussions on leasing the canal and the area
west of it are feasible. Nothing was said by either side,
however, about the city of Vyborg at the mouth of the canal.
Finnish cabinet members and parliamentary leaders were
polled on the question of leasing the Saimaa Canal and adja-
cent territory, and a majority opposed it as prejudicing fu-
ture negotiations on the return of territory.
Kekkonen now considers that talks on
Karelia are not possible during the Voroshilov visit in late
August.
19 July 56
Current Intelligence Bulletin Page 4
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3. PLANS FOR ECUADORAN COUP BY 22 JULY REPORTED
Comment
Various conspiracies for a possible coup
have been reported in the wake of the still
undecided presidential election of 3 June in which the conserv-
ative Ponce Enriquez seems to have a slim 6,000-vote lead.
Velasco has given no overt indication that
he intends to abandon constitutional procedures. In 1.935 and
1947, however, he was ousted from the presidency for attempt-
ing to assume dictatorial powers.
The majority of the army, which is the key
factor in Ecuadoran politics, appears inclined to support con-
stitutional procedures. The armed forces have been reported
opposed to Guevara, an imitator of Peron's tactics, while Chill-
boga, a dissident Liberal, is considered lacking in any appre-
ciable military or popular support.
19 July 56
Current Intelligence Bulletin Page 5
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Nap vivior
4. NEW SYRIAN CHIEF OF STAFF APPARENTLY
CO-OPERATING WITH EGYPT
Comment
The new, more conservative group
headed by Nizam al-Din which is now
in nominal control of the Syrian army is believed to be seek-
ing to diminish the influence of leftist, pro-Egyptian elements.
However, it almost certainly does not wish to break off Syria's
military alliance with Egypt against Israel. Syrian army lead-
ers, in addition to reassuring Egypt on their own attitudes,
probably will continue to work with Egypt in trying to strengthen
ties among Israel's immediate neighbors and to view with sus-
picion the development of other ties, such as the Jordanian
Iraqi agreement, which they feel might in a crisis exercise a
restraining influence on Arab actions.
19 July 56
Current Intelligence Bulletin Page 6
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N.?
5. SOUTH VIETNAM MAY SEND EXPEDITION
TO SPRATLYS
President Diem seems determined to
mount a "symbolic occupation" of one
or more of the disputed Spratly Islands
in the South China Sea to reinforce
South Vietnam's claim to this group, according to the Amer-
ican embassy in Saigon. Diem's position is that South Viet-
nam cannot "stand idly by" while Nationalist China, the
Philippines, and France actively advance their claims to
the islands.
South Vietnam's interest in this connec-
tion has been intensified by publicity over the recent estab-
lishment of a Chinese Nationalist garrison on one of the
Spratly Islands. An unofficial Filipino group has been ac-
tive in the Spratlys and a French naval vessel is also pres-
ent in the area.
Although the expedition apparently is not
imminent, as naval orders to implement Diem's directive
have not yet been issued, Diem's wish to take some face-
saving action adds a further complication to an already deli-
cate situation.
19 July 56
Current Intelligence Bulletin Page 7
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"owl Now'
THE ARAB ISRAELI SITUATION
(Information as of 1700, 18 July)
19 July 56
Current Intelligence Bulletin Page 8
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