SOVIET POLICY TOWARD EASTERN EUROPE UNDER GORBACHEV

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09T00367R000200080001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 23, 2016
• Document Release Date: January 2, 2013
• Sequence Number: 1
• Publication Date: May 1, 1988
• Content Type: NIE

Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
oar Director ot
Central 25X1
Intelligence
Soviet Policy Toward Eastern
Europe Under Gorbachev
National Intelligence Estimate
ret
NIE 11112-9-88
May 1988
Copy 490
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001:8
25X1
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS,
EXCEPT AS NOTED IN THE TEXT.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State and Treasury.
Also Participating:
The Deputy Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
NIE 11/12-9-88
SOVIET POLICY TOWARD EASTERN
EUROPE UNDER GORBACHEV
Information available as of 26 May 1988 was used
in the preparation of this Estimate, which was
approved by the National Foreign Intelligence
Board on that date.
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
CONTENTS
Page
KEY JUDGMENTS
1
DISCUSSION
5
Eastern Europe in the Mid-1980s
5
Economies in Decline
5
Aging Leaderships
6
Challenges to Soviet Authority
6
Gorbachev's Policies Toward Eastern Europe
6
Foreign and Security Policy Coordination
7
Economic Pressures
8
Succession Dilemmas
8
Outlook: Growing Diversity, Sharper Conflict
11
Growing Diversity
11
Strained Economic Relations
13
Succession Scenarios
14
Sharper Conflict
15
Potential Challenges to Soviet Control
15
Popular Upheaval
15
Sweeping Reform
17
Conservative Backlash
17
Prospects and Variations
18
Implications for the United States
18
ANNEX: KEY SOVIET OFFICIALS RESPONSIBLE FOR
EASTERN EUROPE
23
iii
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
KEY JUDGMENTS
General Secretary Gorbachev's policies have increased the poten-
tial for instability in Eastern Europe. But they have also expanded the
scope for diversity and experimentation, affording new possibilities for
evolutionary reform in the region.
Gorbachev has set an ambitious agenda for Eastern Europe. His
aims are to secure East European support for the Soviet modernization
drive, promote broader Soviet foreign policy objectives through closer
Warsaw Pact coordination, and stimulate a deeper process of economic
and political regeneration in the region. Aware of the region's diversity,
he has set general guidelines for reform rather than detailed plans. But
he faces East European realities?severe economic problems, aging
leaderships, and mounting social discontent?that conflict with Soviet
objectives.
Soviet policy under Gorbachev has sought to balance the compet-
ing objectives of encouraging change and promoting stability. Although
Gorbachev has avoided a high-risk strategy of forcing change on these
fragile political systems, continuing Soviet pressure, as well as the
example of the Soviet reform program, has introduced new tensions into
the region.
Growing Diversity, Sharper Conflict
For the next three to five years, Eastern Europe's outlook is for
growing diversity?in responding to reform pressures, crafting ap-
proaches to the West, and managing relations with Moscow:
Economically, Eastern Europe cannot deliver what Gorbachev
wants. As the gap between goals and results grows more acute,
Gorbachev is likely to exert stronger pressure on his allies to
forge closer economic ties, upgrade performance, and imple-
ment domestic economic reforms.
While the recent leadership change in Hungary probably comes
close to Gorbachev's preferences for Eastern Europe, prospec-
tive successions elsewhere are not likely to yield the dynamic,
innovative leaders Gorbachev needs to achieve his more ambi-
tious goals in the region. Consequently, his pressures for change
will continue to be aimed at regimes ill-equipped and, in some
cases, unwilling to respond.
1
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Thus, at best, Gorbachev's approach can achieve only evolutionary
progress toward political rejuvenation and improved economic perfor-
mance in Eastern Europe. Continued, and probably heightened, Soviet
pressure will lead to sharper conflicts, both within East European
societies and between Moscow and its allies.
Potential Challenges to Soviet Control
Cross-pressures emanating from Moscow, coupled with severe
economic and political dilemmas in Eastern Europe, could yield more
serious challenges to Soviet interests. Three extreme scenarios are
possible:
? Popular upheaval in Poland, Romania, or Hungary, involving a
broad-based challenge to party supremacy and ultimately to
Soviet control.
? Sweeping reform in Hungary or Poland, going well beyond
Gorbachev's agenda and eventually threatening to erode party
control.
? Conservative backlash, involving open repudiation of Soviet
policies by orthodox leaders in East Germany, Romania, or
elsewhere.
Of these, popular upheaval is the most likely contingency. Gorba-
chev will expect his allies to act decisively to end any political violence
or major unrest. Indeed, East European leaders are at least as aware of
the need for vigilance as Gorbachev is, and they have at their disposal
powerful security forces that have proved effective in containing unrest.
Should events spin out of their control and beyond the limits of Soviet
tolerance, the ultimate controlling factor on change in Eastern Europe
will be Soviet force:
? Gorbachev faces greater constraints than did his predecessors
against intervening militarily in Eastern Europe; his foreign
policy and arms control agenda, and much of his domestic
program as well, would be threatened.
? A Dubcek-like regime would have much greater latitude to
pursue reforms now than in 1968, and Soviet intervention to
stop it would be more problematic.
In extremis, however, there is no reason to doubt his willingness
to intervene to preserve party rule and decisive Soviet influence
in the region.
2
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SFCRFT
Implications for the United States
Gorbachev's sanctioning of diversity and experimentation have
expanded the limits of the thinkable in Eastern Europe, presenting new
opportunities for US and Western policies:
? Economic dilemmas and high-technology requirements will
lend strength to US calls for internal reforms of the kind already
legitimized by Moscow.
? Gorbachev's active European policy and the generally more
dynamic period of East-West relations will offer new opportuni-
ties for the West to engage even the more conservative East
European regimes.
At the same time, Gorbachev's policies will complicate the coordi-
nation of Western policies toward European security. Differing West-
ern approaches will make it harder for Western governments to reach a
political consensus on dealing with Moscow and its allies, and harder for
NATO to maintain a security consensus.
Gorbachev's policies also call into question some of the assumptions
upon which the US policy of differentiation is based, in that the twin US
goals of diversity and liberalization increasingly collide. Those regimes
most at odds with Gorbachev's approach also tend to be the most
orthodox and repressive, and the reform-minded Hungarians and Poles
are now closely attuned to the Soviet line. In practice, however, our
ability to influence the grand alternatives?reform or retrenchment,
crisis or stability?will remain limited; we can at best encourage
evolutionary movement toward internal liberalization and greater
independence from Soviet tutelage.
This information is Secret
3
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Figure 1
Soviet Forces in Eastern Europe
Swerien
.N
Baltic Sea
OM ?40,
C
I OUP erli
Republic')
- woo qp.R.
1 Wow ipie.--41116
f
1/4%r. .....,
lpew
Poland
Baltic MD
--c=7 tob?
y 47:=b
4=3.
X X X
f:=0
Doe
Belorussian MD
Soviet Union
Germany
Carpathian MD
c=b
cza
e=zb
est?
it:za
0
ssa MD
witz.
Yugoslavia
Italy
Adriatic
Sea
Artillery
division
Motorized
rifle division
Armored
division
Airborne
division
"New army
corps"
Ready Not ready
4:vs.
-ashy --ten.
X X X
.290 KI:retws
iooi 200 Mlles
Ionian
Sea
Albania
Greece
Bulgaria
(:)
Aegean Sea
0
Black
Sea
Turkey
i)
The United States Goveinm, theef._19t recognized
0 1,f7"49orpor9tion of Estortie,LewW...afid Lfthuanta
t4;f0 rp=ry)91:iaiti lzrIrk,,r18(Tron
4
SECRET
712598 (543707) 5-88
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
DISCUSSION
1. Not since the early Khrushchev years have policy
changes in the USSR had so profound an impact on
Eastern Europe as those now being pushed by General
Secretary Mikhail Gorbachev. These new winds blow-
ing from Moscow, as well as serious internal economic
and political dilemmas, have ushered in an era of
considerable uncertainty?and potentially of signifi-
cant change?in Eastern Europe. With the impending
passing of an entire generation of leaders in the region,
Soviet policy over the next three to five years is likely
to be decisive in determining the scope and direction
of change and, ultimately, the stability of the Soviet
empire.'
2. For Gorbachev as for his predecessors, the impor-
tance of Eastern Europe can hardly be exaggerated: it
serves as a buffer, military and ideological, between
the USSR and the West, a base for projecting Soviet
power and influence throughout Europe, a conduit of
Western trade and technology, and a key external
pillar of the Soviet system itself. The Soviet Union
continues to exercise decisive influence over the region
through a complex web of political, economic, and
military and security ties, and there is no reason to
doubt ultimate Soviet willingness to employ armed
force to maintain party rule and preserve the Soviet
position in the region
3. At the same time, however, Eastern Europe is a
region of chronic instability, recurrent crisis, and
growing diversity; the tasks of Soviet alliance manage-
ment have grown progressively greater. Successive
Soviet leaders have sought both cohesion and viability
in Eastern Europe; they have failed to achieve them
simultaneously. Gorbachev, while mindful of the need
for stability, has tilted the balance toward an agenda
of change and reform in the interest of regime
viability. Some veteran East European officials liken
the current situation to Khrushchev's de-Stalinization
campaign and the subsequent upheavals in Hungary
and Poland in 1956; they fear that the Soviet reform
' This Estimate examines relations between the Soviet Union and
its six Warsaw Pact allies?East Germany, Poland, Czechoslovakia,
Hungary, Romania, and Bulgaria?over the next three to five years.
It focuses on the impact and implications of Soviet policies in the
region as a whole rather than offering detailed assessments of
individual countries
drive will unleash potentially uncontrolla pressures
for change in Eastern Europe
Eastern Europe in the Mid-1980s
4. The new Soviet leadership under Gorbachev
inherited an Eastern Europe whose seeming quies-
cence was belied by serious problems just beneath the
surface. To be sure, the challenge posed by Solidarity
in Poland had been successfully contained with the
imposition of martial law in December 1981, and the
Jaruzelski regime had made some progress toward
restoring party control and neutralizing its domestic
opposition. Yet, throughout Eastern Europe, severe
economic problems, rising social discontent, and politi-
cal stagnation among the aging party leaderships
created an unstable situation.
5. Economies in Decline. When Gorbachev as-
sumed power in 1985, Eastern Europe had endured
nearly a decade of economic decline and stagnation.
Most obviously, the region-wide financial crisis of the
early 1980s contributed to the end of an era of East-
West economic detente: trade with the West declined
sharply, new credits were scarce, and several of the
East European regimes were compelled to enter into
extensive refinancing negotiations with Western credi-
tors. Trade relations with the USSR fared little better,
as Soviet oil prices reached a new peak in 1982-83,
belatedly reflecting the full brunt of the 1978-79
increases in the world market (as the five-year averag-
ing mechanism for Soviet oil deliveries caught up with
prevailing world rates).
6. These reversals took a heavy toll on standards of
living, as the East Europeans struggled with large
foreign debts and deteriorating economic perfor-
mance. In Romania and Poland, shortages of energy
and basic foodstuffs raised the prospect of economical-
ly induced political instability; elsewhere, problems
were less disastrous but still acute. Failure to deliver
the promised improvements in living standards?the
linchpin of regime strategies in the 1970s?further
undermined political legitimacy and deepened societal
alienation. Reduced investments and growing lags in
the scientific-technological revolution had also weak-
ened East European competitiveness on world mar-
kets, further mortgaging the region's economic future.
5
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
7. Aging Leaderships. Adding to Eastern Europe's
decline was the stagnation and immobility of its aging
party leaderships. By 1987, the average age of the six
top party leaders was well over 70, their average
tenure in office more than two decades. Only Poland's
General Jaruzelski, a relative youngster at 64, and East
German party leader Erich Honecker, still spry at 75,
seemed capable of energetic leadership; most of the
others were in poor health, presiding over leaderships
bereft of new ideas. These were hardly the men to
grapple with the difficult policy issues of the 1980s.
8. Political malaise in Eastern Europe had been
accentuated by a long period of enfeeblement in
Moscow, stretching from the latter years of the Brezh-
nev era through the interregna of Yuri Andropov and
Konstantin Chernenko. Three Soviet successions in the
space of as many years, coupled with mixed policy
signals, heightened uncertainties and complicated suc-
cession dilemmas in Eastern Europe. The absence of
clear and decisive Soviet leadership also contributed to
a period of drift in Eastern Europe, as each regime
began to ad-lib its own approaches even on some
sensitive foreign policy issues.
9. Challenges to Soviet Authority. Ideological
erosion in Eastern Europe?accelerated by the crush-
ing of Solidarity in Poland?gave rise to new indepen-
dent social groups and, above all, to a resurgence of
national consciousness throughout the region. In some
cases, the regimes responded by attempting to co-opt
nationalist sentiments, as in the Honecker regime's
appropriation of Martin Luther, Frederick the Great,
and others as precursors of the East German state. In
others, official policy played on exclusivist, chauvinis-
tic nationalism: the Bulgarian regime mounted a bru-
tal assimilation campaign against its Turkish minority,
and Romania's President Ceausescu increased repres-
sion against the Hungarian minority in Transylvania.
10. More worrisome from Moscow's perspective
were new signs of national self-assertiveness among its
allies, particularly in the aftermath of INF (intermedi-
ate-range nuclear force) deployments in Western Eu-
rope in late 1983 and 1984. East European concern
about the Soviet walkout from the Geneva disarma-
ment talks in late 1983 betrayed deeper anxieties over
the erosion of European detente. During the fall of
1984, there was an unprecedented, semipublic display
of Warsaw Pact disunity?the Soviet and Czechoslo-
vak regimes called for a tougher line and closed ranks,
while the East Germans, Hungarians, and Romanians
pressed for improved East-West relations and stressed
the special role of small states in promoting detente.
11. For most of the East European regimes, the
preservation of European detente was no longer just
desirable; it had become an essential ingredient of
their economic and political strategies. It also corre-
sponded to rising pressures from below for national
self-expression and self-assertion and for affirming the
"Europeanness" of the East European states. Unlike
the upheavals of 1956, 1968, and 1980-81, these trends
did not directly threaten Soviet primacy in the region
but were aimed at achieving greater scope for diversi-
ty in the interest of economic and political stability.
Together with mounting internal problems, they add-
ed up to considerable disarray in Moscow's East
European empire.
Gorbachev's Policies Toward Eastern Europe
12. In Eastern Europe as elsewhere, Gorbachev's
initial approaches were extensions of his broader do-
mestic and arms control agenda:
? Domestically, Gorbachev was seeking to revital-
ize Soviet power and prestige through economic
restructuring" (perestroika) and a carefully reg-
ulated campaign of "openness" (glasnost), de-
signed to strengthen a lagging economy, over-
come bureaucratic resistance, and breathe new
life into society at large.
? Externally, Gorbachev needed a respite from
East-West tension and the debilitating arms race
with the United States. He also sought to replace
the rigid, ideological world view of his predeces-
sors with a more sophisticated pursuit of Soviet
regional interests, particularly in Western Eu-
rope and East Asia
13. As for Eastern Europe, Gorbachev probably did
not have a fully developed conception of its problems
and, as at home, lacked a clear and detailed plan of
action. Improved economic performance was a high
priority?to transform Eastern Europe from a drain
on Soviet resources to an asset in the Soviet moderniza-
tion drive and to promote economic and political
viability. Gorbachev viewed with obvious disdain the
hidebound leaderships in Prague, Sofia, and Bucha-
rest, which reflected the corruption, inefficiency, and
dogmatism of Brezhnev's latter years. Given his ambi-
tious foreign policy program, he also required re-
newed discipline and greater coordination among the
East Europeans:
? In pursuit of these objectives, Gorbachev needed
to press change on the East Europeans, particu-
larly in economic policy. But he also needed
6
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
stability in the region, so as not to jeopardize his
more urgent priorities at home.
? Although Gorbachev was not inclined to embark
on a high-risk strategy, he also saw dangers in
continued stagnation and hence was more ready
than any Soviet leader since Khrushchev to en-
courage diversity and experimentation as the
keys to long-term viability in the region.
? And, of course, Soviet approaches to Eastern
Europe were not Gorbachev's alone. As on do-
mestic policy, Gorbachev also had to take into
account the views of other key Soviet officials.
(See annex.)
14. Foreign and Security Policy Coordination.
Gorbachev's first task was to reassert firm leadership
over Warsaw Pact foreign policy and improve coordi-
nation to support his far-reaching arms control agenda.
This he achieved through a series of Warsaw Pact
summits?six in his first two years.?and the adoption
of something approaching a conciliar system, whereby
the East Europeans were briefed before and after
major Soviet foreign policy initiatives. More impor-
tant, the Soviet shift from confrontation to dialogue on
arms control issues helped allay East European con-
cerns of being caught in the middle of rising tensions,
facilitating a natural convergence of Soviet and East
European approaches on East-West issues.
15. Gorbachev's ambitious foreign agenda also en-
tailed a much greater role for the East Europeans.
Jaruzelski and Honecker paid early visits to China
aimed at restoring normal interstate and interparty
ties, and several East European governments began
exploring the prospects for normalizing relations with
Israel. Some?notably the Poles and East Germans?
floated new arms control and other security proposals.
And Honecker's visit to Bonn exem lified a more
active Western policy by the GDR.
16. In light of growing East European diplomatic
activity, it should not be surprising that Gorbachev
laid great stress on coordination and discipline in
Warsaw Pact councils. The renewal of the Pact itself
was instructive. With its initial term due to expire in
May 1985, the Romanians and others hinted that they
favored certain changes to the text?a watering down
of mutual defense obligations and more precise provi-
sions for the Pact's eventual dissolution?and that they
wanted only a 10-year extension. In the event, the Pact
was renewed without a single change; and Gorbachev,
then only two months on the job, had achieved an
Date
March 1985 Moscow
May 1985 Warsaw
October 1985 Sofia
Multilateral Summit Meetings of Soviet and
East European Party Leaders, 1985-87
Location Event Agenda
November
1985
Chernenko
funeral
Warsaw Pact
30th anniversary
Warsaw Pact Po-
litical Consulta-
tive Committee
(PCC) meeting
Prague Ad hoc
June 1986 Budapest
November
1986
PCC
Moscow Ad hoc meeting
of CEMA (Coun-
cil for Economic
Mutual Assis-
tance) party
leaders
May 1987 East
Berlin
December
1987
East
Berlin
PCC
Ad hoc
Renewal of
Warsaw Pact
Pre-Geneva
arms control
proposals
Informal de-
briefing on
US-Soviet
summit at
Geneva
"Budapest
appeal" for
conventional
and tactical
nuclear force
reductions
-CEMA
2000" pro-
gram for
scientific-
technological
cooperation
Conventional
force reduc-
tions; military
doctrine;
-new interna-
tional eco-
nomic order"
Debriefing on
US-Soviet
summit in
Washington
impressive show of unity. (Gorbachev reportedly ham-
mered out this agreement at the time of Chernenko's
funeral?literally his first day in office?but only at
the price of offering new Soviet energy deliveries in
return for Ceausescu's agreement.) Gorbachev also has
moved to expand the infrastructure of the Warsaw
Pact. In May 1987, two new Pact bodies were created
to facilitate ongoing coordination of Soviet and East
7
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
European arms control positions and supervision of
East European foreign visits and contacts.2
17. At the same time, however, Gorbachev has used
the Bloc's consultative bodies for substantive policy
discussions rather than ritualistic endorsement of pre-
cooked resolutions. Soviet influence remains para-
mount, but Gorbachev's new stress on consultation and
consensus-building reflects his understanding that the
East Europeans have extensive and useful foreign ties
of their own and that an effective Soviet approach to
the West must take these realities into account. Once a
common position is reached, Gorbachev has insisted on
closed ranks and alliance discipline, and even the loyal
Bulgarians have been called to task for failing to
endorse Soviet arms control initiatives with sufficient
enthusiasm. Gorbachev also instructed the Poles to
redraft the "Jaruzelski Plan" for arms reductions in
Central Europe, and he played a key role in control-
ling the pace and timing of inter-German relations.
18. Economic Pressures. The second major item
on Gorbachev's agenda was to link the East European
economies to the Soviet modernization drive. Both
bilaterally and through CEMA (the Council for Eco-
nomic Mutual Assistance), Gorbachev moved to re-
dress the trade deficits the East Europeans ran up in
the 1970s, maintaining a freeze on Soviet oil deliveries
at their early 1980s level and demanding increased
imports of higher quality East European goods, partic-
ularly consumer items and high-technology machinery
and equipment. The heavily indebted Poles, Roma-
nians, and Hungarians were enjoined to reduce their
economic dependence on the West; the Bulgarian and
Czechoslovak regimes were exhorted to revive their
stagnant economies and upgrade performance. And all
were pressed to join the Soviet-led -Comprehensive
Program" for scientific-technical cooperation through
the year 2000--CEMA 2000," for short?through
joint ventures and coordinated production in key high-
technology areas:
? To enforce these strictures, Gorbachev created
new quality-control inspections and delivered
blunt messages to several East European leaders.
? Gorbachev lobbied personally for the swift im-
plementation of the CEMA 2000 program in late
1985 and, in doing so, moved CEMA toward a
new agenda.
These are the Multilateral Group for Current Information
Exchange and the Special Commission on Disarmament Questions
? He also pushed through new bilateral agreements
on scientific-technological cooperation and se-
cured new legislation in the East European coun-
tries to facilitate coproduction and joint ventures.
19. The actual conduct of Soviet-East European
economic relations in Gorbachev's first two years
revealed less change than the early rhetoric seemed to
promise. Indeed, the East European trade deficit with
Moscow rose sharply in 1986 to 2.6 billion rubles?the
largest annual trade gap since 1981. Although trade for
1987 was nearly balanced, the favorable trends were
due chiefly to a decline in the value of Soviet oil rather
than increased East European deliveries. In export
performance, as well as domestic -restructuring," the
veteran East European leaders temporized with the
familiar foot-dragging that has frustrated Soviet lead-
ers from Khrushchev on.
? 20. The East Europeans were particularly wary of
being drawn into Soviet-sponsored (and Soviet-domi-
nated) joint ventures in high-technology areas, and
resistance was evident in the elaboration of the CEMA
2000 program. Owing to its industrial power and
unique access to Western technology via -inner-Ger-
man" trade, the GDR was the key East European
participant; but the East Germans, like the Hungarians
and Romanians, were reluctant to jeopardize their
own carefully cultivated trade relations with the West
in support of Gorbachev's domestic agenda. Soviet-
East European differences were evident at the hastily
convened November 1986 Moscow summit on CEMA
integration, which yielded only minimal consensus on
the next stage of scientific-technological cooperation.
Even Soviet planners now concede CEMA 2000 goals
are too optimistic.
21. Succession Dilemmas. These frustrations
pointed to Gorbachev's more basic dilemma: how to
impart some of his own dynamism to Eastern Europe
without a wholesale shakeup of the ossified party
leaderships in Prague, Sofia, and elsewhere. Gorba-
chev evidently recognized, however, that any direct
attempt to instigate an East European succession
would entail great risks. Consequently, Soviet efforts
have been largely indirect, aimed at shaking up the
ruling establishments by projecting reformist ideas and
the example of Moscow's own domestic innovations.
These efforts also aimed at shifting the internal party
debates in those countries toward the preferred Gorba-
chev agenda, and in so doing altering the context and
accelerating the pace of presuccession maneuvering.
8
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
22. Such pressure was evident in May 1987, when
Soviet Foreign Minister Shevardnadze visited Buda-
pest to convey Gorbachev's dissatisfaction with the
Hungarian leadership's procrastination on further eco-
nomic reform. A month later, Karoly Grosz, reputed to
be an able and energetic administrator, was named
Hungarian Prime Minister. And in July, after a quick
visit to Moscow by Grosz, the Hungarian leadership
unveiled a long-discussed, long-postponed set of eco-
nomic reform (and austerity) measures. A year later,
the succession process took a much more decisive turn:
? At a special party conference in May 1988, Grosz
was named party General Secretary, forcing out
Janos Kadar, who had served in the top party
post since 1956.
? Most of Kadar's proteges were also dramatically
removed from the top leadership, replaced by a
strongly reformist group of younger officials.
Although the initiative for these decisions was proba-
bly Hungarian, Soviet pressure clearly forced the pace
and direction of change
23. Even without direct Soviet calls for change in
Eastern Europe, the demonstration effect of Gorba-
chev's domestic departures was unsettling. The very
existence of a reform-minded Soviet leader, coupled
with his critique of Brezhnev-era mismanagement,
served to undermine the authority and cohesion of the
more orthodox East European regimes. And the new
legitimacy accorded to economic "restructuring- and
political "openness- threatened to unleash widespread
public expectations for rapid change. Nowhere were
these trends more evident than in Czechoslovakia,
where the seeming vindication of reformist and even
dissident ideas sent shock waves through the divided
party leadership. These pressures, combined with the
declining health of party leader Gustav Husak, led to
his abrupt resignation in December 1987. (See inset,
page 10.)
24. The Czechoslovak succession confirmed Gorba-
chev's determination to promote change without
threatening stability. Through strong, if largely indi-
rect, pressure on the divided Prague leadership, Gor-
bachev helped secure the removal of Husak, the
personification of Brezhnev-era conservatism?only to
accept a safe, almost Chernenko-like successor in Milos
Jakes. Indeed, Soviet pressure for change probably
could not have succeeded had Gorbachev attempted to
push a reformist successor on a still-conservative
Czechoslovak leadership. Jakes, then, was probably a
compromise choice for Moscow as well as Prague; the
The Hungarian Succession
Karoly Grosz
Age 57. .. General Secretary of the Hungarian
Socialist Workers' Party (HSWP) since 22 May 1988;
Premier since June 1987; Politburo member since
1985. . . May party conference gave a mandate to
institute both economic and political changes. .. com-
mitment to economic reform untested, accomplish-
ments as Premier limited. . . respected by business
leaders as dynamic, vigorous executive willing to make
tough decisions .. . Budapest party secretary, 1984-87.
Janos Kadar
Age 76. . . HSWP President since 22 May 1988;
removed as party leader, Politburo member at that
time. .. after 1956 revolution, forged social consensus
based on consumerism and relaxed relations between
party and people. .. ability to convince Soviets of
Hungarian loyalty and stability contributed to long
reign. .. recently seen as impediment to economic and
political progress because of unwillingness to expand
reforms of 1970s, also declining energy level, progres-
sive health problems.
9
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
The Czechoslovak Succession
Gustav Husak's December 1987 resignation as
Czechoslovak party leader (while retaining the largely
honorific state presidency) came in the wake of a long
Soviet campaign to push the Gorbachev agenda in
Prague; the resulting pressures undoubtedly encouraged
the Czechoslovak leadership to move against Husak. His
successor, Milos Jakes, brought to the party leadership a
mixed bag of credentials:
? Jakes carried the baggage of post-1968 "normali-
zation," having been among the anti-Dubcek con-
spirators and having directed the 1969-70 purge of
party members associated with the Prague Spring.
? He had served since 1981 as party secretary for
economic affairs and recently seemed to have
sided with pragmatic elements in the party favor-
ing cautious economic reform?stressing, howev-
er, that economic change must take place under
strict party control.
Though hardly a green light for reform, Jakes's
elevation will help move the regime toward long over-
due economic change and political rejuvenation, al-
ready hinted at by the April 1988 changes to the
Central Committee secretariat. And Jakes, a firm Mos-
cow loyalist, will be more receptive to Soviet calls for
improved economic performance, closer cooperation in
Soviet-sponsored joint ventures in high-technology ar-
eas, and domestic "restructuring." He is also likely to
oversee further changes in the party leadership, still
dominated by holdovers from the 1969-70 "normaliza-
tion" period and now thrown into ethnic imbalance by
the overrenresentation of Czechs in top regime posi-
tions.
These changes are not likely to spark social upheaval,
nor will they lead to significant liberalizing reform in
Czechoslovakia. But they may herald a long-awaited
change in economic policy and encourage opposition
groups to become more active, if only to test the limits
of tolerance under the Jakes regime.
Milos Jakes
Age 66. .. party leader since 17 December 1987 . .. party
Central Committee secretary, 1977-87, responsible for agricul-
ture until 1981, for economy until April 1988 .. . Presidium
member since 1981 . . . attended CPSU Higher Party School in
ilsdoscow (1955-58), presumably speaks fluent Russian.
Czech.
Gustav Husak
Age 75. . . President since 1975 .. . party leader, 1969-87 .
resigned as party chief but remains a member of policymaking
Presidium . .. has had cataract surgery, suffers continuing
vision problems, declining general health. .. reportedly drinks
excessively .. . Slovak.
Czechoslovak succession underscored the limits of the
achievable in Soviet policy in dealing with the more
conservative regimes in Eastern Europe
25. The gap between Gorbachev's ultimate objec-
tives, as outlined in numerous speeches and docu-
ments, and the actual policies he has pursued reflects
the fundamental contradiction between his desire for
change and the imperatives of party control in Eastern
Europe:
? Gorbachev has set an ambitious agenda for East-
ern Europe that addresses many of the region's
problems, but it is neither broad nor deep enough
to remedy underlying systemic weaknesses.
10
SECRET
? He has expanded the scope of permissible experi-
mentation for reformist regimes, such as Hunga-
ry, and has succeeded in pushing some of the
more conservative East European regimes to-
ward long overdue, though still timid, reforms.
In the process, he has accentuated divisions
within the East European leaderships and awak-
ened a combination of popular hopes and anxi-
eties about impending change. These trends,
coupled with severe economic problems, have
heightened uncertainties in the region and
creased the potential for crisis.
1
25X1
25X1
V
25X1
25X1
25X1
25X1
25X1
in-
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
25X1
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Outlook: Growing Diversity, Sharper Conflict
26. Soviet policy toward Eastern Europe is likely to
continue along the lines already established under
Gorbachev. Its key elements will be:
? Within the framework of firm party control,
sanctioning of diversity and experimentation as
the keys to economic and political viability.
? Continued pressure for reform without dictating
specific measures or demanding slavish emula-
tion of Soviet practices.
? Insistence on foreign policy coordination, where-
by the East Europeans are afforded greater room
for tactical maneuver but are expected to hew
closely to the broad lines set in Moscow.
? Mounting pressure for improved East European
economic performance and increased coopera-
tion in high-technology areas.
? Longer term efforts toward strengthened insti-
tutional ties, coupled with alliance management
techniques that facilitate Soviet control and in-
fluence through a more participatory system of
give-and-take.
27. These broad contours of Soviet policy will re-
main in place so long as Gorbachev's domestic position
is secure and Eastern Europe remains quiescent. A
major change in Moscow would obviously alter the
equation:
? Gorbachev's ouster would curtail the Soviet re-
form drive and heighten uncertainties in Eastern
Europe as the new regime sorted itself out. His
removal on political grounds would send another
new signal to the divided East European re-
gimes?this time a sharply antireformist one?
and undercut Soviet authority, at least
temporarily.
? Retrenchment in Moscow (with Gorbachev still
in office) would strengthen the existing orthodox
leaders in Eastern Europe without fully arresting
the pressures for change. Perceived lack of unity
in the Kremlin would further polarize Eastern
Europe, with conservatives seeking to restore the
status quo ante and reformists continuing to push
for change.
? More daring Soviet reforms?a result, perhaps,
of Gorbachev's need to overcome bureaucratic
resistance through radical policy and personnel
changes?would further destabilize Eastern Eu-
rope and strain relations with Moscow. Rising
pressures within the East European regimes
might prompt some of them to implement
sweeping reforms or force out existing leaders.
28. Gorbachev has played a skillful political game
so far, pulling back when necessary while gathering
support for the next push forward. Although the
chances of a domestic showdown have increased,
Gorbachev seems to have the upper hand and appears
inclined to push his reform agenda further and more
forcefully
29. Growing Diversity. For the next three to five
years, the outlook in Eastern Europe is for growing
diversity?in responding to reform pressures, crafting
approaches to the West, and managing relations with
Moscow. Diverse East European arms control propos-
als and economic approaches to the West will facilitate
some Soviet objectives, but they will also complicate
the tasks of alliance management and run counter to
the joint action needed for scientific-technological
cooperation. In Gorbachev's broader view, moreover,
diversity is no end in itself but rather a vehicle for
economic and political regeneration. These goals are
nowhere in sight in Eastern Europe. Except perhaps in
Hungary, they are not likely even to be seriously
pursued.
30. Glasnost and perestroika will continue to yield
mixed results. Barring leadership changes, Romania
and East Germany will continue to resist reform
pressures; Bulgaria will continue to experiment at the
margins but will proceed only haltingly toward real
-restructuring." The new Czechoslovak leadership un-
der Jakes will push more forcefully for economic
change, but serious movement toward economic and
political reform remains a distant prospect. Hungary
and Poland could be more interesting:
? The appointment of Karoly Grosz?a tough, self-
confident risk taker in the Gorbachev mold?as
General Secretary of the Hungarian party and
the promotion into the leadership of outspoken
reform advocates marks an important turning
point. The new leadership is likely to be much
more aggressive in pressing economic and politi-
cal reforms, but it faces severe problems?in-
cluding workers unhappy with austerity, intellec-
tuals demanding more freedom, and an economy
that is stagnating and burdened with a heavy
foreign debt. Failure to develop a more radical
11
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
and effective reform program would further
contribute to a rise in tensions.
- Evidently with Soviet blessings, General Jaru-
zelski has already consolidated a rather unortho-
dox pattern of party-military rule, moved toward
granting the Catholic Church new legal status,
and proposed economic reforms that, on paper at
least, go well beyond Moscow's. The disastrous
economic situation and social discontent-as
shown by the recent wave of strikes-make
successful realization of the reforms unlikely, but
the urgency of domestic problems may also push
the regime toward the social dialogue it has
rejected up to now.
31. In foreign policy, the East European regimes
have reason to be satisfied with Gorbachev's skillful
engagement of the West and their own increased room
for maneuver. So long as Moscow maintains a concilia-
tory approach to the West, Soviet and East European
policies will remain generally congruent. At the same
time, Gorbachev's encouragement of a more active
role for the East Europeans will increase the chances
for open conflicts of interest at CSCE (Conference on
Security and Cooperation in Europe) talks and in other
Pan-European forums. There will also be increased
risk of further embarrassments to Moscow arising from
Hungarian-Romanian polemics or public airing of
East European human rights violations. Hence, foreign
policy coordination will require more skillful manage-
ment, and Gorbachev will need to prod the Czechoslo-
vak and Bulgarian regimes toward more active diplo-
macy while restraining the occasional independent-
mindedness of the Romanians Hungarians, Poles, and
East Germans
32. At the same time, East European realities will
limit the parameters of possible Soviet initiatives. Not
only must Gorbachev weigh the consequences of
Soviet policies on political stability in Eastern Europe,
but he must also take into account the perceptions and
likely reactions of East European leaders. Their views
are not likely to deter him from policies he considers
vital to Soviet interests; but, on matters as potentially
destabilizing as inter-German relations, his options are
limited. Indeed, Gorbachev's campaign for a common
"European house" of growing intra-European cooper-
ation implies a degree of national autonomy in Eastern
Europe far beyond what he or any other Soviet leader
would countenance. Moscow will find it increasingly
difficult to promote this line in the West without
introducing new divisions into Eastern Europe as well.
(The Berlin Wall will stay, whatever tactical advan-
tages Gorbachev might see in its removal.)
Table 1
Eastern Europe: Projected
Debt Figures, 1987-90 .
Million US $
25X1
-
25X1
25X1
1987
1988
1989
1990
Bulgaria
Gross debt
4,954
5,121
5,375
5,730
Net debt b
3,531
3,598
3,745
3,986
Debt service ratio a
(percent)
36.7
36.4
37.1
38.4
Czechoslovakia
Gross debt
4,714
4,940
5,150
5,335
Net debt
3,497
3,723
3,933
4,118
Debt service ratio
(percent)
15.3
15.8
16.4
16.7
East Germany
Gross debt
16,775
16,573
16,447
16,423
Net debt
8,862
8,660
8,534
8,510
Debt service ratio
(percent)
41.0
38.7
36.1
33.8
Hungary
Gross debt
15,314
16,684
18,084
19,502
Net debt
13,414
14,784
16,184
17,602
Debt service ratio
(percent)
54.1
53.4
54.9
57.1
Poland
Gross debt
34,570
35,937
37,417
38,908
Net debt
32,850
34,117
35,497
36,888
Debt service ratio
(percent)
73.9
74.0
64.2
74.5
Romania
Gross debt
4,214
3,324
2,679
2,053
Net debt
3,632
2,490
1593
967
Debt service ratio
(percent)
34.5
21.5
16.3
14.5
a Last updated: 14 January 1988.
b Reserve figures used in calculating net debt exclude gold reserves.
a The debt service ratio is calculated using the following formula:
Interest payments + medium- and long-term principal
repayments/total exports -I- invisible receipts. The debt service ratio
for Poland is calculated using the amount of interest owed, not the
amount paid.
12
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
"*-
t
225X1
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Table 2
Eastern Europe's Economic Outlook: Average Annual
Growth by Five-Year Plan Period a
Percent
1971-75
1976-80
1981-85
1986-90 b
Bulgaria
Total GNP
4.7
1.0
0.8
1.0
Gross fixed investment
6.4
-9.1
-1.1
2.5
Personal consumption
3.9
1.6
2.1
1.0
Czechoslovakia
Total GNP
3.4
2.2
1.1
1.0
Gross fixed investment
6.5
-0.3
-1.2
1.0
Personal consumption
2.7
1.5
1.1
1.0
East Germany
Total GNP
3.5
2.3
1.7
2.0
Gross fixed investment
1.5
1.7
-10.0
2.0
Personal consumption
3.8
2.0
1.2
1.5 .
Hungary
Total GNP
3.3
2.0
0.7
1.0
Gross fixed investment
2.3
0.3
-5.2
1.0
Personal consumption
3.2
2.2
0.4
0.5
Poland
Total GNP
6.5
0.7
0.6
2.0
Gross fixed investment
14.4
-2.9
-4.9
1.5
Personal consumption
5.6
2.4
-0.2
1.5
Romania
Total GNP
6.7
3.9
1.8
2.0
Gross fixed investment
10.4
6.9
-2.2
2.0
Personal consumption
5.1
4.7
0.2
1.0
a Last updated: 12 January 1988.
b Projections for 1986-90 were based on analysis of current trends,
results of econometric models, and consultations with country
experts.
33. Strained Economic Relations. Eastern Europe
cannot deliver what Gorbachev wants: significant im-
provements in trade performance, particularly in
high-technology areas. Poland and Hungary will re-
main saddled with enormous debts for the foreseeable
future, with East Germany and Bulgaria also facing
debt problems. The Romanian economy, drained to
repay Western creditors, will remain devastated for
years to come, and Czechoslovakia's industrial and
technological base has been rendered obsolete by years
of neglect. Throughout the region, projected growth
rates and shares devoted to investment will remain
suppressed, leaving the East European economies with
only limited capacity to assist in the Soviet moderniza-
tion drive. Nor are the East Europeans likely to
jeopardize economic relations with the West or risk
further reductions in domestic living standards for the
sake of Gorbachev's economic agenda
34. So far, Gorbachev's economic pressures-like
those of Soviet leaders before him-have yielded few
tangible results aside from improved deliveries in
some areas like machine tools. Foreign trade plans for
1986-90 are inconsistent with Gorbachev's main goals,
calling for an average annual growth of only 5 percent
in Soviet-East European trade-the slowest growth in
planned trade in the last 15 years. Similarly, most of
the CEMA 2000 technical goals appear unattainable-
only a handful of joint ventures have been created,
and the push for "direct links" between enterprises
remains hamstrung by economic and bureaucratic
13
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
impediments that have frustrated Soviet planners from
the beginning. Moreover, Soviet-East European terms
of trade have begun to shift against Moscow, as the
five-year averaging mechanism for Soviet oil prices
has caught up with declining prices on the world
market. If world oil prices hold roughly steady for the
next few years?or even if they increase somewhat?
the East European ruble debt will begin to disappear,
further weakening Moscow's economic bargaining
power
35. Gorbachev will face a growing gap between his
economic goals and results over the next three to five
years, at the very time that his domestic moderniza-
tion plans call for a significant increase in East
European inputs and tangible progress in the CEMA
2000 program. Following the pattern of his domestic
policies, Gorbachev has come to realize that his goals
in Soviet-East European economic relations cannot be
met without systemic economic and institutional re-
form. At the October 1987 meeting of the CEMA
prime ministers, the Soviets reopened some of the
fundamental problems raised earlier by the East Euro-
peans themselves: lack of convertible currency, inade-
quacy of direct links among firms, and absence of a
rational pricing mechanism. And Gorbachev will soon
learn, if he has not learned already, that reforming
intra-CEMA trading procedures is futile without deep
structural reforms in the domestic economic systems.
36. Thus, the dilemma of promoting change with-
out provoking instability in Eastern Europe will grow
more acute. Faced with an almost certain need to
increase the pace of reform at home, Gorbachev is
likely to step up pressure on the East Europeans to
introduce perestroika and economic reform, albeit not
with the same intensity or impact as in the USSR.
37. Succession Scenarios. Leadership changes in
Eastern Europe present both risks and opportunities
for Gorbachev. On the one hand, it is increasingly
clear that change of the kind Gorbachev wants will not
take place under the current crop of leaders. The
prospective departure of several veteran leaders gives
Gorbachev an unparalleled opportunity to influence
the selection of more energetic and innovative party
leaderships. On the other hand, several East European
successions?some already under way?pose risks for
political stability and hence for Gorbachev's broader
agenda
38. The Hungarian succession of May 1988 dramat-
ically altered the top leadership and raised popular
expectations for reform, but the attendant austerity
measures are likely to heighten domestic tensions. Nor
is the succession process complete: further leadership
changes, including the naming of a new prime minis-
ter, are still ahead. In Czechoslovakia as well, Husak's
replacement by Jakes is just the beginning of a turn-
over of the entire post-1968 leadership, with the need
for Czech-Slovak proportionality adding to the disrup-
tion. Elsewhere, impending successions promise to be
similarly unsettling:
? Zhivkov has been in power for more than three
decades; his departure will reverberate through-
out the Bulgarian apparat.
? With seven Politburo members over 70, the East
German party faces a major turnover of the
remaining leaders of the wartime generation.
? The post-Ceausescu succession in Romania will
introduce considerable uncertainties into that
highly personalized leadership and may invite
East-West rivalry as Moscow attempts to reassert
influence with a successor regime.
39. Gorbachev's task will be to manage several
leadership transitions, perhaps simultaneously, to as-
sure that preferred, or at least acceptable, successors
are named and that regime authority is preserved in
the process. His ability to do so will depend on his
success in defeating conservative forces in his own
leadership. The options and constraints confronting
him in Eastern Europe are fairly clear:
? He will need to work with the existing top
leaderships; Soviet preferences will be important
but not decisive.
? There will be a short list of three to five figures
in each party whose seniority gives them some
claim to the job.
? Excluding the Ceausescu clan, nearly all these
figures meet the minimum qualifications of ex-
perience and reliability.
? Except in Hungary, none has demonstrated the
kind of dynamism Gorbachev wants, though a
few have reformist credentials.
While the Hungarian succession probably comes close
to Gorbachev's preferences for Eastern Europe, pro-
spective leadership changes elsewhere are not likely to
yield the dynamic, innovative leaders Gorbachev
needs to achieve his more ambitious goals in the region
as a whole. He will probably have to settle for a series
of transitional leaderships and then work to ensure
that a new eneration of reform-minded leaders is
groomed.
14
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
40. This cautious and gradualist approach has the
advantage of minimizing the disruption inherent in
East European successions. If carefully managed, it
may also facilitate the eventual transfer of power to a
new and more forward-looking generation of leaders.
But it will not soon yield the dynamic, innovative
leaderships Gorbachev needs to achieve his more
ambitious economic and political goals in Eastern
Europe. It also means that Gorbachev's reform pres-
sures will continue to be aimed at leaderships ill
equipped and, in some cases, unwilling to respond.
41. Sharper Conflict. Thus, at best, Gorbachev can
achieve only evolutionary progress toward political
rejuvenation and improved economic performance in
Eastern Europe. And currently contemplated reforms
will not solve deep-seated political and economic
problems. As the gap between objectives and results
becomes more evident, Gorbachev will be inclined to
push more aggressively for deeper changes as the
necessary precondition to economic and political revi-
talization. To do so will require a careful calibration of
Soviet policy: he will need to push hard enough to
achieve tangible results but not so hard as to provoke
system-threatening instability. The danger of miscal-
culation will increase
42. Already Gorbachev has introduced new destabi-
lizing tendencies into Eastern Europe through his open
critique of past failures of socialism, heightened eco-
nomic pressure on his allies, and, above all, the
demonstration effect of his domestic reform program.
Sharper conflict is likely even if Gorbachev does not
increase the pressure on his allies. The longer the
Soviet reform dynamic continues, the stronger will be
the internal pressures for change on the East European
regimes.
43. These cross-pressures, coupled with severe eco-
nomic problems and leadership uncertainties, will
heighten popular unrest in Eastern Europe. In Poland,
newly implemented austerity measures have led al-
ready to widespread strikes, protests, and demonstra-
tions; Hungary and Romania also face growing unrest.
There will be a general increase of antiregime activ-
ism, owing to the climate of "openness" and greater
willingness to test the limits of regime tolerance.
Human rights, religious, pacifist, environmentalist,
and other groups?already active in most of Eastern
Europe?will grow more assertive. The pattern of
cooperation among Hungarian, Czech and Polish
dissidents is also likely to expand
44. These developments alone will not threaten
party rule, but collectively they will:
? Weaken regime authority.
? Undermine economic recovery prospects.
? Lay the groundwork for more serious challenges.
Potential Challenges to Soviet Control
45. There are at least three more extreme scenarios
that could lead to serious challenges to Soviet control
over Eastern Europe
46. The Hungarian Revolution of 1956, the 1968
Prague Spring, and the Polish social revolution of
1980-81 (along with numerous lesser upheavals) pro-
vide ample evidence of the inherent instability of
Moscow's East European empire. Each of these had its
own dynamic, but each led ultimately to a broad-
based challenge to party supremacy and Soviet control
in the region. And each led to crisis?meaning in the
East European context the actuality or imminent
likelihood of Soviet military intervention.
47. However, Gorbachev's sanctioning of reform
and experimentation implies a more liberal Soviet
definition of "crisis." Liberalizing reform (of the kind
espoused by the 1968 Czechoslovak leadership) may
no longer lead so swiftly and automatically to a "crisis
situation" in Moscow's eyes.
48. Popular Upheaval. Several of the usual insta-
bility indicators?discontent over living standards,
weak and divided leadership, social unrest?are evi-
dent in several countries, and all face pressures ema-
nating from Moscow. New shocks?severe austerity
measures, the death or ouster of a top party leader, or
the emergence of an organized and emboldened oppo-
sition?could bring about serious instability almost
anywhere, with Poland, Romania, and Hungary the
most likely candidates for trouble:
? The likelihood of multiple, simultaneous upheav-
als is higher than it has been in more than 30
years. In the late 1980s and into the early 1990s,
virtually all the East European countries face
15
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Romania: Impending Crisis?
The potential for regime-threatening crisis is growing
in Romania, the country least affected by Gorbachev's
policies and most defiant of Soviet strictures. Romania's
problems are homegrown, owing to the Ceausescu
regime's severe austerity measures and draconian do-
mestic policies.
A major riot involving an estimated 5,000 to 10,000
protesters in Brasov in November 1987 was the most
visible manifestation of growing public unrest, which
has given rise to scattered strikes, demonstrations, and
acts of sabotage. So far, unrest has remained isolated
and localized: there is no organized opposition, and
security forces are well equipped to quell protests?
with stocks of foodstuffs as well as truncheons.
Evidence is also growing of ferment within the party
hierarchy itself. Disenchantment within the rank and
file, fueled by popular protests and Ceausescu's scape-
goating of the party for his economic failures, has left
him isolated. Gorbachev's public criticism of Ceauses-
cu's ruling style and widespread knowledge of Ceauses-
cu's medical problems are accelerating this trend, as
officials throughout the system try to distance them-
selves from him to avoid being caught up in a post-
Ceausescu housecleaning. Discontent within the party
has been diffuse up to now, and Ceausescu's reshuffling
of key leaders has precluded the emergence of an
oppositionist faction.
These economic and political pressures add up to an
increasingly volatile internal situation, however, and
several possible scenarios could bring about a full-scale
upheaval:
? Ceausescu's death or incapacitation. Ceausescu
suffers from prostate cancer and has visibly weak-
ened in the past year (although he maintains a
vigorous schedule). If he were to die in office, he
would probably be replaced by a collective includ-
ing his wife Elena and other loyalists; such a
regime would probably be embroiled quickly in a
broader succession struggle.
? A palace coup. The most likely crisis scenario
would have growing popular unrest, stimulating
still more dissatisfaction within the party and
setting the stage for Ceausescu's ouster. He would
probably be succeeded by a collective of figures
currently within the party leadership; Elena and
the rest of the clan would be swept away along
with Ceausescu himself.
A brushfire of popular unrest. Simultaneous out-
breaks of protest could spark a more widespread
uprising, overwhelming Securitate resources and
leading to a breakdown of public order. The
resulting near-anarchy could lead to a seizure of
power by the military.
Soviet Attitudes
So long as Romania did not descend into complete
disorder, Moscow would probably have more to gain
than lose in a crisis scenario. A post-Ceausescu leader-
ship would offer opportunities for restoring lost influ-
ence; and Romania's geopolitical and economic realities
would remain severe constraints on any successor re-
gime in Bucharest.
Military intervention would not even be a plausible
contingency unless there were incipient anarchy in
Romania or the advent of a successor leadership that
threatened to remove Romania from the Warsaw Pact.
Neither is likely.
Spillover in Eastern Europe
Short of a Soviet invasion, events in Romania would
not have wide repercussions elsewhere. Nor would they
impinge on Gorbachev's broader agenda, in that a
Romanian crisis would not be linked to Soviet policies
or pressure tactics; indeed, a crisis provoked by
Ceausescu's misrule would strengthen Gorbachev's ar-
gument that stability demands economic and political
rejuvenation. However:
? Hungarian-Romanian relations would be severely
strained if domestic violence in Romania were to
turn into ethnic violence directed at the Hungar-
ian minority in Transylvania.
? And Yugoslavia would be involved if bloodshed or
chaos in Romania precipitated an exodus of Ro-
manians seeking refuge abroad via Yugoslavia.
analogous sets of problems: stagnant economies,
leadership successions, and reformist pressures
from Moscow.
? As in the past, however, possible scenarios would
be highly country-specific. Only in Romania is
there a significant possibility of widespread vio-
lence; elsewhere, the greater likelihood would be
a broad-based, organized challenge to regime
authority. (In Poland, however, this latter scenar-
io could also lead to a cycle cif repression and
violence.)
49. For Gorbachev, a possible upheaval in Eastern
Europe constitutes the greatest external threat to the
Soviet reform program and his own continued tenure.
16
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Despite the greater tolerance he has shown for experi-
mentation, he will expect his allies to take swift,
decisive action to end any political violence or major
unrest. Indeed, the East European leaderships are at
least as aware as Gorbachev is of the need for
vigilance, and they have at their disposal large security
forces that have been effective thus far in containing
disturbances. Should events overwhelm the capacity of
local leaders, there is no reason to doubt that he would
take whatever action was required, including military
intervention, to preserve party rule and Soviet author-
ity in the region. Like his predecessors, Gorbachev
would exhaust all other options before undertaking
Soviet military intervention. Indeed, he faces even
greater constraints:
? A Soviet invasion of an allied country would do
irreparable damage to his image in the West and
undermine the entire edifice of his foreign
policy.
? An upheaval in Eastern Europe, particularly one
attributable to Gorbachev's reform pressures,
could also threaten his domestic standing. It
would add to domestic political pressures for his
removal from power and the curtailment of his
reform program.
50. Sweeping Reform. Gorbachev has expanded
the limits of acceptable reform. In Hungary and
Poland particularly, reform blueprints are being circu-
lated that go well beyond anything now on the agenda
in Moscow. And now the Hungarians have put in place
a leadership team containing radical reformers, such
as Imre Pozsgay, head of Hungary's Patriotic People's
Front. Although Grosz has more conservative leanings
than the newcomers, he is action-oriented and willing
to take some chances to get the party out in front of
the reform process. In light of the looming economic
decline and coalescence of dissident and establishment
pressures around a reform package, he could be pulled
by his new Politburo toward more radical solutions to
Hungary's problems. Given the fate of previous re-
form movements, there would be strong elite and
popular inhibitions against direct challenges to party
supremacy and the Soviet alliance system. If Eastern
Europe's past is any guide, however, a genuine reform
movement in Hungary or elsewhere would tend inev-
itably toward national self-determination and autonomy.
51. Such a scenario would be the most hopeful for
Eastern Europe and the most problematic for Moscow,
particularly if public discipline were maintained.
There would be no incipient anarchy to facilitate
Soviet suppression, few pro-Soviet collaborators to call
on, and no cataclysmic event to spur Moscow to take
early and decisive action. By the time Gorbachev had
decided that the course of events had gone too far, he
could be faced with a relatively unified reform leader-
ship and a disciplined and determined population; the
costs of intervention would be much higher than
under a scenario of serious internal instability. Gorba-
chev would have to choose between suppressing a
genuine reform movement?inspired by his own calls
for glasnost and perestroika?or countenancing at
least a partial erosion of Soviet control. His choice?by
no means a foregone conclusion?would hinge on the
scope of change and the perceived challenge to Soviet
influence in the region.
52. Conservative Backlash. Gorbachev's pressure
for reform also could lead to stronger and more open
defiance on the part of orthodox leaders in East Berlin,
Bucharest, or elsewhere. Prague's chief ideologist Vasil
Bilak has publicly rejected the applicability of Gorba-
chev's reforms to Czechoslovakia, and the East Ger-
man official press regularly, if indirectly, dismisses the
Soviet reform program. If further Soviet pressures
create new cleavages that impinge more directly on
the job security of the conservative East European
leaderships, and if future Yeltsin affairs strengthen
perceptions in Eastern Europe that Gorbachev is
faltering, hardliners there might become much more
openly confrontational.
53. If, for example,
Kremlin emboldened some East European leaders to
adopt stridently antireformist platforms, the damage
to Gorbachev's authority would be magnified. He
would probably have the clout to silence Zhivkov and
Jakes, but his capacity to ward off a conservative
backlash led by Honecker or Ceausescu would be less
certain, particularly if they and other recalcitrants
joined forces in an informal rejectionist front (indeed,
Gorbachev is already reported to have criticized
Ceausescu for trying to form an "antireform alliance"
with Honecker):
? Such a scenario would be interactive?it would
require the tacit approval of Gorbachev's domes-
tic opponents, who in turn would be strength-
ened by an East European backlash.
While a less threatening?and less likely?con-
tingency, it would nonetheless represent a major
challenge to Gorbachev's authority and policies
in the Bloc. To avert irretrievable damage to
perceived divisions in the
17
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Figure 2
Potential Challenges to Soviet Control, Probabilities
Over the Next Five Years
Percent
Popular Upheaval
Internal instability
leading to serious
challenge to party
control.
Bulgaria
East Germany
Hungary Romania
Czechoslovakia Poland
Remote
Low
50
Moderate
Sweeping
Reform
Regime-led economic and
political reforms going
well beyond anything
acceptable to Moscow.
Romania
Czechoslovakia
East Germany Bulgaria
Poland
Hungary
Remote
Low 50
Moderate
Conservative
Backlash
Strong and open
repudiation of Soviet
reforms and policies by
East European leaders.
Hungary
Poland
Bulgaria
Czechoslovakia
East Germany
Romania
Low
Remote
50
Moderate
both, he might have to force a showdown in
Eastern Europe?perhaps by demanding the res-
ignation of his most strident critics.
54. Prospects and Variations. None of these more
extreme scenarios is likely to be played out in the near
future, but their probability will increase over the next
three to five years. Moreover, these evolutions need
not be manifest in their pure forms, nor are they
mutually exclusive. Short of these extreme scenarios, it
316073 3-88
is a virtual certainty that somewhere in Eastern Eu-
rope there will be new movement toward more daring
reform, a new outburst of public unrest, or more open
resistance to Moscow's reform agenda. We could see
all three at once.
Implications for the United States
55. Eastern Europe is entering a period of flux.
Change is facing more countries?and across more
18
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
dimensions?than at any time since the immediate
post-Stalin period. Developments over the next three
to five years are likely to determine the key contours
of political life in the region for a generation to come:
? Within the time frame of this Estimate, these
developments will not lead to the unraveling of
Moscow's East European empire, nor will they
by themselves diminish the military threat posed
by the Warsaw Pact.
? A crisis in Eastern Europe would undermine Pact
cohesion, at least temporarily, but it would al-
most certainly lead to a crackdown (with or
without Soviet intervention), rolling back what-
ever concessions had been wrested from the
regime.
? Short of such an extreme evolution, however, the
scope of conceivable change in the region has
expanded considerably. And the likelihood of
growing diversity and sharper conflict will create
new opportunities for Western engagement of
Eastern Europe
56. Gorbachev's agenda of reform, openness, and
experimentation is congruent with US goals of promot-
ing pluralism in Eastern Europe and greater indepen-
dence from Moscow. This endgame is not what Gorba-
chev has in mind, of course; but, in encouraging
change as the key to dynamism and ultimately to
greater viability, he has sanctioned diversity and ex-
panded the limits of the thinkable in Eastern Europe.
57. Gorbachev's policies also call into question some
of the assumptions upon which the US policy of
differentiation is based, in that the twin aims of
liberalization and independence from Moscow increas-
ingly collide in Eastern Europe. Those regimes most at
odds with Gorbachev's approach also tend to be the
most conservative and repressive. Conversely, relative-
ly open countries like Poland and Hungary, which
have received favored US treatment, are now closely
attuned with Moscow
58. These contradictions in US policy will grow
more acute the longer Gorbachev remains in power
and the Soviet reform dynamic continues. However,
our ability to influence the grand alternatives?reform
or retrenchment, crisis or stability?will remain limit-
ed indeed; we can at best promote favorable change
on the margins:
? Gorbachev's policies have created new opportu-
nities for Western encouragement of liberalizing
US Policy Toward Eastern Europe
Excerpts From NSDD 54, 2 September 1982:
"The primary long-term U.S. goal in Eastern Europe
is to
facilitate its eventual reintegration into the European
community of nations.... The United States ... can
have an important impact on the region, provided it
continues to differentiate in its policies toward the
Soviet Union and the Warsaw Pact countries of Eastern
Europe, so as to encourage diversity through political
and economic policies tailored to individual
countries.. ..
"Differentiation will aim at:
? Encouraging more liberal trends in the region.
? Furthering human and civil rights in East Europe-
an countries.
? Reinforcing the pro-Western orientation of their
peoples.
? Lessening their economic and political depen-
dence on the USSR and facilitating their associa-
tion with the free nations of Western Europe.
? Undermining the military capabilities of the War-
saw Pact.
"In implementing its policy, the U.S. will calibrate its
policies to discriminate carefully in favor of govern-
ments which:
? Show relative independence from the Soviet
Union in the conduct of foreign policy as mani-
fested by the degree to which they resist associat-
ing themselves with Soviet foreign policy objec-
tives and support or refrain from obstructing
Western objectives; or
? Show relatively greater internal liberalization as
manifested in a willingness to observe internation-
ally recognized human rights and to pursue a
degree of pluralism and decentralization, includ-
ing a more market-oriented economy. . .
19
SECRET
reform on the part of regimes so inclined, like the
Hungarian and the Polish. For the others, the
United States also may have new leverage to
promote diversity, even if reform prospects are
remote.
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
? US policy faces the dilemma that large segments
of the East European societies are not willing to
accept the austerity that implementation of eco-
nomic reforms would entail. And the regimes are
loath to risk the political reforms needed to win
public acceptance of painful economic measures.
59. Gorbachev's policies will complicate the coordi-
nation of Western approaches to European security.
For Bonn, the prospect of closer relations with its
eastern neighbors has revived old ambitions for a
greater central European role. The French, worried
about Bonn's eastward drift and suspicious of Gorba-
chev's ultimate aims, have taken the lead in resisting a
new wave of European detente:
? These differences will make it harder for West-
ern governments to reach a political consensus on
dealing with Moscow and its allies, and harder
for NATO to maintain a security consensus.
? However, differing Western policies toward
Eastern Europe create cross-pressures that pro-
mote diversity, inhibit CEMA integration, and
erode Warsaw Pact foreign policy discipline.
6 Eastern Europe. The United
States has always pursued a two-track policy in East-
ern Europe, communicating directly with East Euro-
pean populaces as well as with their governments.
These direct channels of communication will be par-
ticularly important as new ideas circulate and new
opportunities emerge:
? International broadcasting?particularly via Ra-
dio Free Europe, but also from other Western
radios?will be an important vehicle for inform-
ing East European publics on Soviet reforms and
exerting indirect pressure on the East European
regimes.
? There will be greater opportunity for developing
East-West contacts: those regimes that already
pursue relatively open policies will have greater
latitude to expand them; the others will come
under pressure from both Moscow and their own
populaces to do likewise. Such contacts?ranging
from scientific exchanges to scholarly dialogues
and people-to-people programs?will serve to
push forward the limits of diversity, strengthen
public and elite pressure for internal reform, and
help cultivate second-level officials who may
play key roles in successor regimes.
61. There also will be new opportunities for West-
ern engagement of the East European regimes, owing
to:
? Economic dilemmas that virtually compel sever-
al East European governments to accept previ-
ously unpalatable conditions in exchange for
Western credits.
? High-technology requirements, pushing the East
Europeans to facilitate direct contacts with West-
ern firms and international economic
organizations.
? Gorbachev's campaign for a "European house,"
which impels the East Europeans toward more
active diplomacy and also heightens their sensi-
tivity to charges of human rights violations.
? The general climate of reform and "openness,"
which offers opportunities for engaging Eastern
Europe on formerly taboo subjects and pressing
more directly for internal reforms of the kind
already legitimized by Moscow
62. The East European regimes will continue to be
wary of any Western proposals that impinge on
regime control or Soviet prerogatives on foreign and
security policy. They are likely, however, to be more
receptive than in the past to US proposals for counter-
terrorism and counternarcotics cooperation, expanded
East-West contacts, and even improvements in the
area of human rights:
? The CSCE process offers new forums for sepa-
rate, if not fully independent, East European
diplomatic activity?as in Hungary's cosponsor-
ship with Canada of a proposal on national
minorities. Such developments suggest there is
greater scope for Western engagement of Eastern
Europe on key East-West issues, and in so doing
for promoting greater diversity and indepen-
dence in the region.
? A prospective umbrella agreement between the
European Community and CEMA, along with a
possible CSCE follow-on conference on East-
West economic relations, would complicate US
efforts to control technology transfer, but they
would also offer new venues for engaging East-
ern Europe on foreign trade policy and domestic
reform.
20
SECRET
? New opportunities also may develop for a more
genuine security dialogue, particularly if a new
round of talks on conventional force reductions
affords greater scope for East European
diplomacy.
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
? On matters of internal liberalization, the ironic
convergence of US and Soviet calls for economic
and political reform will lend strength to the
conditions the United States attaches to expanded
economic cooperation
63. Influencing Soviet Behavior. Should the
trends Gorbachev himself has set in motion lead to
upheaval or sweeping reform in Eastern Europe, the
ultimate controlling factor will be the limits of Soviet
tolerance. Gorbachev has strong disincentives to inter-
vening in Eastern Europe, particularly for the purpose
of suppressing a genuine reform movement. He and
his Politburo are not likely to be deterred from actions
they deem vital to Soviet interests, but the United
States and its allies may be able to alter at the margin
the Soviet risk calculus by maximizing the price
Moscow would have to pay. The extent of direct,
heavyhanded Soviet interference would be influenced
marginally by the ability of the United States to
convey clearly how such Soviet behavior would affect
the broader US-Soviet agenda
21
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
ANNEX
KEY SOVIET OFFICIALS RESPONSIBLE FOR EASTERN EUROPE
Interparty Relations
Mikhail Gorbachev
CPSU General Secretary (since March 1985)
By the time he became General Secretary in March 1985, Gorbachev had
already met all East European party leaders and had spoken with some of their
principal lieutenants as well. In November 1969 he was part of a low-level delegation
to Czechoslovakia. After becoming CPSU secretary for agriculture in 1978, he
returned to Czechoslovakia (April 1979). Gorbachev visited Hungary in October
1983 and Bulgaria in September 1984, and he almost certainly met in Moscow with
these leaders and others during the annual CEMA gathering each June, as well as at
other summits. He also was involved in hosting visits of each of the East European
party leaders in the early 1980s.
At Chernenko's funeral in March 1985, the party leaders of the Warsaw Pact
states were the first foreign dignitaries with whom Gorbachev met. Since that time,
he has visited every East European country (except Albania) at least once. He has also
met in Moscow with East European officials on 39 occasions.
Yegor Ligachev
Politburo member and secretary, Central Committee (since 1985)
As unofficial -second secretary," Ligachev, 67, is involved in general oversight
of foreign policy; he currently chairs the Supreme Soviet Commission on Foreign
Affairs. He has not frequently visited East European countries, but, in 1987, he
traveled twice to Hungary. He also visited Poland in 1984. Despite his reputation as
the leading conservative in the Soviet Politburo, Ligachev has praised Hungary's
economic reforms, strongly suggesting that Budapest need not imitate Soviet
economic policies and structures. His cautious approach to domestic reform in the
Soviet Union, however, suggests he would be similarly cautious about major change
in Eastern Europe.
Aleksandr Yakovlev
Politburo -member (since June 1987) and secretary, Central Committee (since
March 1986)
Yakovlev, 64, is one of Gorbachev's closest advisers on foreign affairs and an in-
fluential figure in Soviet policymaking toward Eastern Europe. He led the Soviet
delegation to the January 1987 Socialist Bloc Ideological/International Secretaries
meeting in Warsaw, where he advocated new media techniques to aggressively
promote a socialist concept of democratization and human rights. A leading reform
proponent, Yakovlev has also pushed for a more sophisticated European policy and
has stressed the need for more flexibility in socialist development, which suggests
that he is relatively open to internal diversity in the Bloc countries. He has met fre-
quently in Moscow with visiting East European delegations and in 1987 traveled to
Poland and East Germany.
23
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Vadim Medvedev
Chief, Liaison With Communist and Workers' Parties of Socialist Countries (-Bloc
Relations-) Department; and secretary, Central Committee (since March 1986)
Although Medvedev, a proponent of economic reform, has not worked on East
European matters, his writings have stressed that socialist economic theory should
draw both on the Soviet model and on the experiences of other Bloc countries.
Medvedev, 59, has headed several delegations to Soviet Bloc countries and accompa-
nied Gorbachev on a trip to Hungary in June 1986. He advocates diversity for the
economic and political policies of East European regimes, with the caveat that Soviet
tolerance will depend on their ability to contribute to Soviet economic
modernization.
Diplomatic Relations
Eduard Shevardnadze
Foreign Minister
Since becoming Foreign Minister in June 1985, Shevardnadze, 60, has frequent-
ly traveled to Eastern Europe, visiting all East European foreign ministers in their
capitals and attending regular Warsaw Pact foreign minister meetings. The past year
has clearly been Shevardnadze's most active, with nearly half of his 20 trips abroad
made to Eastern Europe. During a June 1987 visit to Budapest, he reportedly pressed
the Hungarians to move economic reform forward, expressing dissatisfaction with
bilateral economic, scientific, and technical relations. In 1986, Shevardnadze visited
Romania in October and Poland in March. He has been an increasingly outspoken
advocate of reform and foreign policy -new thinking."
Economic Relations
Nikolay Ryzhkov
Chairman, USSR Council of Ministers; Politburo member (since 1985)
Premier Ryzhkov, 58, coordinates government-to-government economic ties
between the Soviet Union and Eastern Europe. A strong supporter of domestic
economic reform, he has also encouraged CEMA premiers to endorse changes in
CEMA operations and trade. During a meeting with his East European counterparts
in 1987, Ryzhkov recommended intra-CEMA currency reforms, direct enterprise
contacts, joint ventures, and a new CEMA organizational structure. In response to the
opposition of several East European leaders to this limited decentralization of
planned management, Ryzhkov warned that those countries unwilling to participate
in these changes should not hinder those who do.
24
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
SECRET
Military Relations
Viktor Kulikov
First Deputy Minister of Defense (since 1971); Commander in Chief of the
Warsaw Pact Forces (since January 1977)
An able field commander, Marshal Kulikov, 67, is the third-ranking official in
the Soviet military hierarchy. He wields considerable political clout throughout
Eastern Europe and, through a combination of persuasion and bullying, has
reportedly won compliance with Moscow's policies, especially in operational matters
and in planning for the imposition of martial law in Poland in 1981. Although US of-
ficials have consistently been impressed by Kulikov has
indicated that he will soon be retired. Kremlin leaders may view Kulikov, who only
cautiously supports Gorbachev's program of sufficiency and doctrinal revision, as an
impediment to significant change in the defense sector.
25
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
Declassified in Part - Sanitized Copy Approved for Release 2013/01/02 : CIA-RDP09T00367R000200080001-8
25X1