CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003200100001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 37
• Document Creation Date: December 20, 2016
• Document Release Date: June 29, 2006
• Sequence Number: 1
• Publication Date: October 19, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
CC!'DCT
(CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 76
OCI NO. 0286/61
29 June 1961
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DOCUMENT NO.
L DECLASSIFIED
r.>ANGED TO:
DATE:
/--LA". H 770---2~~~
DA ',2Q'/~-~ey
C FII TIAR;
State Dept. review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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 CURRENT INTELLIGENCE WEEKLY SUMMARY
EAST-WEST RELATIONS . . . . . . . . . . . . . . . .
Khrushchev has continued his efforts to impress
the West with his unyielding determination to sign
a separate peace treaty with East Germany if there is
no East-West agreement on a German settlement by the
end of the year. On 28 June he said the USSR was pre-
pared to reopen negotiations but that Western moves
toward mobilization would not deter the signing of a
peace treaty. Bloc sources also have begun
to issue assurances that a negotiated settlement is
still possible. One Soviet diplomat characterized
Khrushchev's deadline on Berlin as mainly intended
to overcome Western "delaying tactics." He indicated
that the USSR would defer a separate treaty if nego-
tiations were begun before the end of the year. The
maneuvers of the Soviet representative in the bilateral
disarmament talks with the US in Washington suggest
that Khrushchev is seeking to build a case of American
refusal to engage in serious talks.
. Page 1
. . . . . . . . . . . . . . . . . . ... . . . Page 3
Khrushchev, at a 28 June rally for the North Viet-
namese premier, endorsed the Zurich declaration of the
,three Laotian princes as a "good beginning" and emphasized
that it offered hope that the Laotians themselves will
settle all other internal problems. Despite the air of
victory displayed by Souvanna and Souphannouvong, Phoumi
may still hope to limit Communist influence in any new
government by relying on the legal position of the King
and the constitution. 1 -1
The military situation remains
generally quiet, a t oug
of resistance continue.
FRANCE-ALGERIA . . . . . . . . . . . . . . . . . . . . . . Page 6
De Gaulle's announcement that the transfer of army
divisions out of Algeria is about to begin, together with
continuing talk of partition, emphasizes his statements
that he hopes to have the Algerian problem settled by the
end of the year "by one means or another." His objective,
however, is still to achieve an agreement with the PAG
to create an independent Algeria with close ties to France.
While top PAG leaders are reiterating their hopes of an
early resumption of negotiations, they have given no
indication on any intent to change their position. A
new bloc arms shipment to the FLN via Morocco brings
such shipments to a probable total of 4,500 tons since
November 1960.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
. . . . . . . . . . . . . . . . . . . . Page 7
The
extension o runways at Havana's international airport
would enable it to accommodate jet planes--possibly
those of the Czech airline, which is expected to start
regular flights to Cuba soon. President Quadros' move
to study means of increasing Brazilian-Cuban trade is
mainly a political move to mollify the Brazilian left.
. . . . . . . . . . . . . . . . . . . . . Page 8
Plans for convening parliament on 3 July have been
jeopardized by Tshombd, who since his return to Elisa-
bethville has stated that Katanga will remain independent
and has implied that he will not send a parliamentary
delegation to Leopoldville. A boycott of parliament
by Katanga would weaken the relative strength of the
anti-Gizenga bloc, and if Tshombd refuses to send a
delegation, Leopoldville leaders may seek a postpone-
SOVIET ECONOMIC PROGRAM . . . . . . . . . . . . . . . . . Page 9
Khrushchev, speaking at Alma Ata on 24 June, prom-
ised Soviet consumers that they could expect major
material improvements as a result of the long-range
economic plan in the party program to be published on
30 July and formally presented to the 22nd party
congress in October. His statement that "the light
and food industries will develop rapidly side by side
with heavy industry" is the first suggestion to the
Soviet public of an impending change in the long-
standing priority of heavy industry. Such a policy
shift had been indicated to Western newsmen on 20
EAST GERMAN FOOD SHORTAGE . . . . . . . . . . . . . . . . Page 10
In early June the East German Government was forced
to institute limited rationing of butter; meat supplies
have also declined. These difficulties stem in part from
the effort to complete agricultural collectivization in
1960, from Chinese failure to meet contracts for de-
livery of oil-seed crops for production of margarine, and
from abnormally wet spring weather.
CZECHOSLOVAKIA SHIFTS GOVERNMENT AND PARTY LEADERS . . . . Page 11
Party First Secretary Novotny announced a consider-
able reshuffle of Czechoslovakia's party and government
leaders at a central committee meeting on 22 June; the
moves were almost-,wholly designed to improve control of
agricultural production. In addition a new state com-
mission has been created to oversee local government
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25X1
25X1
organizations, which have not achieved the degree of
control over the people intended by last year's ter-
ritorial reorganization.
GROWING POLICE POWER IN POLAND . . . . . . . . . . . . . . Page 12
Since late 1959 Poland has relied increasingly on
police methods to control internal political, economic,
and cultural activities. The return to prominence of
several hard-line party members may have accelerated
this process. Polish internal security measures, how-
ever, are still not nearly so severe as those applied
in other European satellites.
SOUTH KOREA . . . . . . . . . . . . . . . . . . . . . . . Page 13
Leadership within the South Korean junta is still
not firmly established,
Pak's primary support comes from junior officers
who are pushing for a clean-up of the military. This,
however, has aroused the opposition of senior generals
identified with the Rhee and Chang Myon regimes. Police-
state controls are being used increasingly in an attempt
to assure Pak's position.
ARAB-ISRAELI TENSION . . . . . . . . . . . . . . . . . . . Page 13
Nine incidents along the Israeli-Syrian border dur-
ing the week of 19-25 June apparently resulted in part
from a tougher attitude on the part of Syrian border
troops toward Israeli activities in the demilitarized
zone. At least one incident may have been related to
work on Israel's Jordan River diversion project. Ben-
Gurion might order vigorous retaliation to enhance his
party's prospects in Israel's forthcoming elections.
Meanwhile, the Arabs have made further efforts to co-
ordinate military plans and operations, but effective
cooperation remains difficult to achieve.
NATO DIFFERENCES ON STRATEGY . . . . . . . . . . . . . . . Page 15
Current NATO discussions of long-term strategic
planning show the divergence between Britain's cost-
conscious approach and the emphasis given by West Ger-
many and Turkey to the alliance's military problems.
There is general endorsement of a build-up of conven-
tional forces, but agreement has not been reached on
the role of nuclear weapons.
ARGENTINA . . . . . . . . . . . . . . . . . . . . . . . . Page 15
President Frondizi is attempting to obtain Peronista
electoral support for his party in Argentina's congres-
sional elections next March. This support helped Frondizi
win the presidency in 1958, and his party seems to need
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CURRENT INTELLIGENCE WEEKLY SUMMARY
it even more now, in view of the opposition aroused b
many of his economic stabilization measures.
SOUTH TIROL . . . . . . . . . . . . . . . . . . . . . . . Page 16
Further unrest is likely in the South Tirol prov-
ince of Italy, following the flare-up of terrorist
activities there earlier this month, and the breakdown
of the 24 June talks between the Italian and Austrian
foreign ministers. A new Austrian appeal, to the UN
on behalf of the Tirolese is likely, and the Tirolese
issue might also be used as a pretext by Italian right-
ists to try to overthrow the Fanfani cabinet.
FRENCH FARM AGITATION . . . . . . . . . . . . . . . . . . Page 17
The agricultural disturbances which spread rapidly
in mid-June from Brittany through central and southern
France are, like the labor agitation last spring, as-
pects of the underlying social unrest hitherto held in
check by De Gaulle's prestige and his pleas for national
unity. The discontent led to outbreaks partly because,
under the Fifth Republic, parliament is no longer an
adequate channel for airing popular grievances. The
government is somewhat concerned over the added strain
on the security forces at a time when there is danger
of extreme rightist outbreaks over De Gaulle's Algerian
policy.
COMMUNIST BLOC AGRICULTURAL PROBLEMS . . . . . . . . . . . Page 1
The Soviet Union, with an agricultural labor force
about seven times larger than that in the US, produces
one-third less; despite a substantial gain from 1953
to 1958, Soviet agricultural production did not grow
at all in 1959 and 1960. The agricultural problem
is evident throughout the bloc, and in Communist China
has led to widespread malnutrition. Communist leaders
frequently blame agricultural difficulties on organ-
izational problems or natural disasters. While these
difficulties are real, a major cause is the bloc's
doctrinal commitments to practices which obstruct
effective management and favor industry at the ex-
pense of agriculture; restrictions arising from adverse
climate and topography throughout much of the bloc
are also a limiting factor.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
POLITICAL IMPLICATIONS OF A BRITISH ACCESSION TO COMMON
MARKET . . . . . . . . . . . . . . . . . . . . . . . . Page 6
Far-reaching consequences for intra-European,
Atlantic, and Commonwealth relationships are implicit
in Britain's moves toward membership in the European
Common Market (EEC). Enlargement of the EEC would
probably disturb the French-German entente which has
made possible the community's cohesion thus far. In
addition, London would almost certainly challenge French
leadership of the Continent and play a key role in
determining how soon and in what manner political ties
evolve among the participating states. British accession
to the EEC could give new impetus to the drive for a
unified Europe--in which even the European neutrals
would have to participate in some way. Such a grouping
would become an important component in the balance of
world power.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Khrushchev has continued
his efforts to impress the West
with his unyielding determina-
tion to sign a separate peace
treaty with East Germany if
there is no East-West agreement
on a German settlement by the
end of the year. At Alma-Ata
on 24 June, in a brief reference
to the German question, Khru-
shchev stated that the USSR
would adhere firmly to the posi-
tion which he had outlined in
his speeches of 15 and 21 June.
Again on 26 June, in a message
to East German leaders, he
termed a peace treaty a "com-
pulsive necessity" and pledged
that the'Soviet Government would
"do everything" to have a treaty
.signed by the end of the year.
On 28 June Khrushchev
warned that reports of pro-
spective Western countermeasures
would not prevent the USSR from
proceeding with a peace treaty.
He added that the USSR was
taking the necessary measures
to strengthen its military posi-
tion should the Western powers
begin mobilization. Khrushchev
stated that the USSR favored
talks with the Western powers
on a peace treaty, but warned
the West not to hope it can
deliberately protract a settle-
ment.
He also sought to minimize
the consequences of a separate
treaty by again stating "there
will be no blockade of West Ber-
lin of any kind" and no "re-
strictions" on access, provided
that interested powers reach an
agreement with East Germany.
Khrushchev also hinted that a
second meeting with President
Kennedy might be "useful," al-
though he did not link this
directly to the Berlin question.
Bloc sources have begun
to issue some assurances that
while Khrushchev's statements
must be taken seriously, a
negotiated settlement is still
possible. The Rumanian ambas-
sador in Brussels stressed the
firmness of Khrushchev's posi-
tion on Berlin during a conver-
sation with the American am-
bassador. He stated that while
he did not believe that Khru-
shchev had in mind preventing
access of the Western powers
to Berlin, the access of West
Germany was another matter.
A Soviet Embassy official
in East Berlin who often acts
as a channel to convey informa-
tion to the West told 25X1
that the purpose 25X1
of rus c ev s deadline was
to overcome Western "delaying
tactics" and to force the West
into negotiations before the end
of the,year. He stated that if
negotiations do begin, the USSR
will not conclude a peace treaty
with East Germany during 1961.
He reaffirmed, however, that
otherwise the bloc will def-
initely convoke a peace con-
ference and sign the treaty this
year. This line suggests that
Moscow is engaging in an opera-
tion similar to that of November
and December 1958, when Soviet
spokesmen gave private assur-
ances that Khrushchev's six-
month deadline was designed to
exert pressure on the West,
and that the period could be
extended if negotiations were
arranged.
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Bloc diplomats in Geneva
have also inspired press re-
ports to the effect that "there
must be negotiations." They
are quoted as taking the line
that some modification in the
Soviet position would be possi-
ble if restrictions were placed
on the transfer of nuclear
weapons to West Germany and
some settlement on the frontiers
in Eastern Europe were accepted
as final.
Along this same line, East
German Deputy Foreign Minister
Otto Winzer said in a press con-
ference that "more and more-
voices" could be heard in the
West advising a new agreement
whereby recognition of East
Germany and of the Oder-Neisse
boundary would be granted in
return for a new legal basis
for a Western presence in Berlin.
Winzer claimed that even Sec-
retary of State Rusk left open
such a possibility, and that
this was the "most remarkable
feature" of the Secretary's
press conference of 22 June.
A Soviet spokesman in East
Berlin is reported
to have taken
the line that an interim agree-
ment could run for more than
six months, the term proposed
by the USSR, if something could
be arranged to halt the flight
of refugees. Bloc representa-
-fives are reported by the same
journalists to have begun sound-
ing out the possibilities for
a four-power conference.
While Soviet propaganda
commentaries have reiterated
Khrushchev's deadline, Moscow
has also taken pains to deny
any intention of presenting an
ulLimatum. An "Observer" arti-
cle in Izvestia on 24 June
stressed that Western reports
of Khrushchev's 21 June speech
misrepresented his position by
dropping the qualifying "if's"
from his statement. One such
example, the article contended,
was that "Khrushchev said the
Soviets would sign a peace treaty
with the German Democratic
Republic alone if the Western
powers refuse to take part in
putting an end to the abnormal
situation" in Berlin. The pur-
pose of this "distortion," ac-
cording to Izvestia, was the
West's desire to conceal an
unwillingness to hold reasonable
talks on an equal footing.
A long Soviet broadcast
on the same day claimed that
people in Western countries were
"more and more" inclined to the
idea of opening negotiations
with the USSR on the problems
of Berlin and Germany.
Disarmament
The maneuvers of the So-
viet representative in the bi-
lateral disarmament talks with
the US in Washington suggest
that Khrushchev is seeking to
build a case of American refusal
to engage in serious negotia-
tions. Soviet tactics also sug-
gest that Khrushchev hopes to
use the talks as a means of
increasing pressure for early
Western agreement to another
high-level conference on Berlin
and Germany by attempting to
create the impression of Ameri-
i
can intransigence on all East-
West questions.
ills ' 11101 WVV LW L. ueie_%;a Ie
has contended that there was
no agreement between Gromyko
and Ambassador Stevenson to
resume multilateral negotiations
on disarmament by 31 July. He
has made resumption of new ne-
gotiations dependent on agree--
ment between the US and USSR
on a "program" for complete
and general disarmament or,
"at least," a rapprochement
of positions. He stated that
the USSR could not accept the
American position on the pur-
pose of the talks and indicated
that the main task was to hold
an exchange on the substance of
specific disarmament plans in
order to determine whether there
is any basis for proceeding with
further multilateral negotia-
tions.
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Zorin also proposed that
the two sides begin elaborat-
ing disarmament plans so as to
discover whether an agreement
on general principles is pos-
sible. He stated that the
Soviet plan for complete dis-
armament submitted to the UN
last fall should be considered
as a conference document. On
27 June, Zorin followed up this
move by submitting a Soviet
Government statement setting
forth the "basic position" of
the USSR. The statement re-
views the history of prior ne-
gotiations and reiterates the
main points of the Soviet plan.
In presenting the statement,
Zarin emphasized that no suc-
cess in the talks or in subse-
quent negotiations was possible
without consideration of specif-
ic proposals by both sides.
Zorin rejected the US pro-
posal to add ten nations to the
ten-nation committee which met
in Geneva last year. His reason
was that the proposed countries
included states with military
ties to the US. Zorin was
vague, however, on the possibil-
ity of adding two or three neu-
trals as nonparticipating of-
ficers. He merely stated that
the USSR adhered to the princi-
ples outlined in the talks
between Gromyko and Ambassador
Stevenson last March.
The Geneva conference on
Laos is still in the polemical
stage, and both Soviet and Chi-
nese representatives are de-
nouncing Western control meas-
ures for Laos. Soviet delegate
Pushkin on 22 June stressed
that the West's proposals for
strengthening the International
Control Commission (ICC) would
mean "international control over
almost all aspects of Laotian
domestic affairs." Chinese For-
eign Minister Chen Yi's address
of 26 June also reflected de-
termination to prevent any in-
ternational control which would
hamper the future activities of
the pro-Communist elements in
Laos.
Soviet Premier Khrushchev,
at a rally for North Vietnamese
Premier Pham Van Dong in Moscow
on 28 June, characterized the
Zurich discussions between the
three Laotian princes as a
"good beginning" and expressed
the hope that "before long the
Laotians themselves will solve
other internal problems." He
emphasized that the Laotians
can determine "the form of their
state system, the paths of their
social, economic, and cultural
development." Khrushchev as-
serted that the Zurich talks
proved it was possible "to get
down to practical steps" lead-
ing to the restoration of peace
in Laos. He said chances were
good for a peaceful settlement
of the Laotian problem, but he
reiterated the bloc's contention
that the US and its allies were
evading a discussion of Gromyko's
17 May proposals.
Khrushchev's remarks as
well as bloc propaganda commen-
tary on the Zurich discussions
indicate that the Communists in-
tend to exploit the Zurich
declaration as evidence of a
significant reconciliation of
the rival Laotian factions and
imply that the Geneva conferees
would be guilty of unwarranted
interference in the progress of
future talks if they sought to
discuss the subjects covered in
the Zurich communique.
In his 26 June address
at the conference Chen Yi went
to some lengths in underlining
the bloc's distinction between
the 1954 Geneva conference and
the current one. Chen emphasized
that the present war in Laos is
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CURRENT INTELLIGENCE WEEKLY SUMMARY
a "domestic war" and that it is
thus "absolutely impermissible"
to apply the 1954 ce a.-;e-tire
agreements, which set up the
ICC in its presen~. =or?rm. He
agreed that the IC ;hound c,. n-
trol the withdrawal of oroig'n
military personnel from Laos
in accordance with an agreceent
to be reached by the conference
on this matter.
However, Chen stressed
that future introduction of for-
eign military personnel was the
"primary responsibility of the
Laotian government"--a govern-
ment which the Communists antic-
ipate will be heavily weighted
in their favor. Gromyko's 17
May proposals also specifically
stated that the ICC will carry
out "all its work of supervi-
sion and control in cooperation
with the government of Laos."
Events in Laos, as in
Geneva, appear to be awaiting
clarification of the signifi-
cance of the Zurich communique.
The ani.~z anparent concession
extracted by i3oun Gum and Gen-
era,( Phoin,,ij. at Zurich was the
agreement by Souvanna and Sou-
phannouvong to honor the role
of the King and the constitution
in forming a new government.
Souvanna and Souphannouvong ap-
proached the Zurich talks with
the attitude of victors demand-
ing political capitulation in
line with the realities of the
military situation in Laos.
By relying on the legal
instruments of the King and the
constitution, and possibly count-
ing on some cooperation from
Souvanna, who presumably would
head a new government, Phoumi
may hope to limit Pathet Lao
influence and retain some ele-
ments of the present Vientiane
The bloc has stepped up government and other non-Commu-
its propaganda efforts to devel- nists in a new cabinet.
op the theme of foreign involve-
ment in Laos. Peiping's "People'
Daily of 25 June charged the US
with preparations for "new mili-
tary ventures" and alleged that
South Vietnamese, Thailand
Souvanna is in Paris for a
stay of about a week before pro-
ceeding via Prague to Phnom Penh
or Laos to resume the talks.
Philippine troops are active in I He told Ambassador Harriman be-
Laos. A similar note was struck fore leaving Geneva that the
next day by Chen Yi. Hailing next step toward forming a coa-
the three Laotian princes' ap-
peal for withdrawal of foreign
military person au ?_, he too:.:
e:)ains to emphasize the serious-
ness with which the Chinese view
the presence of Chinese Nation-
alists in Laos and called on
the conference to settle the
issue,
lition government was to decide
who should be premier. Confi-
dent that he would be so desig-
nated, Souvanna commented that,
after that step, he would con-
sult with the King and that a
provisional government could be
set up without seeking assembly
approval.
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Souvanna apparently envi-
sions that the assembly could
"stay on the shelf" until.short-
ly before new elections; al-
though he asserted that a "nor-
mal" situation must be restored
before elections are held, he
professed to believe this could
be achieved within a year. Sou-
vanna implied that a more thorny
problem would be integrating
the armed forces of the three
sides.
Souvanna told Harriman
that Phoumi was the best figure
on the Boun Oum side and that,
if he resigned from the army,
he could be given a cabinet
post. He asserted that the men
around Phoumi were a cause of
trouble through their desire to
retain the posts they now hold.
Souvanna's remarks to Harriman,
as well as some of his recent
public statements, suggest
that he may believe that
General Phoumi is ready
to make a deal with him.
The military situation in
Laos has remained generally
quiet. Kong Le - Pathet Lao
forces are continuing their ef-
forts to mop up Meo pockets in
Xieng Khouang Province despite
the handicaps of adverse weath-
er, difficult terrain, and the
tenacity of the Meos. Some
minor skirmishing has occurred
on the fronts north of Vientiane
and Luang Prabang and there con-
tinues to be some evidence of
efforts to build enemy strength
in Khammouane Province and in
the Tchepone area. Political
talks at Namone remain suspended,
awaiting the return of Boun Oum,
due on 30 June, and General
Phoumi.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
FRANCE-ALGERIA
French orders to begin the
transfer of army divisions from
Algeria and continuing talk of
partition emphasize De Gaulle's
statements that he hopes to
have the Algerian problem set-
tled by the end of the-year "by
one means or another." His ob-
jective, however, is still to
achieve an agreement with the
rebel provisional Algerian gov-
ernment (PAG) to create an in-
dependent Algeria with close
ties to France, and current
French tactics are aimed at
inducing the PAG to undertake
substantive negotiations.
French leaders attribute the
deadlock at Evian to persistent
error on the part of the PAG
negotiators, who read into every
French offer the intention of
keeping Algeria French.
Paris has maintained con-
tact with the PAG since the
Evian talks were adjourned,
and it has sent back Bruno de
Leusse, who was deputy for Min-
ister for Algerian Affairs Louis
Joxe during the first round of
talks, to conduct "procedural"
talks with Algerian negotiators
beginning any time after 3 July.
When some "basis of agreement"
is reached by this method, Paris
will resume the formal negotia-
tions it broke off on 13 June.
25X1
During the interval, France
has outlined plans to partition
Algeria if the PAG tries to
drag out the talks. According
to the French information di-
rector in Algiers, the French
feel that the PAG is very much
afraid of partition but is
little concerned over possible
efforts to create an "Algerian
Algeria" without it.
Paris seemingly intends to
delimit two coastal areas around
Algiers and Oran as French en-
claves into which both pro,
French Moslems and Europeans
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from other parts of. Algeria will
be encouraged to move by a date
sufficiently remote to avoid the
impression of an imposed transfer
of populations. On 27 June De
Gaulle specified that France
must hold on to the Oran area,
which includes the strategic
naval base at Mers el-Kebir.
Civilian and military ex-
tremists will see in these moves
--and in particular the announced
decision to withdraw an initial
division immediately--concrete
evidence of the "De Gaulle sell-
out" they have feared. This
conviction will keep tension
high in Algeria, and new vio-
lence may be sparked by extrem-
ists of either side.
While top PAG leaders con-
tinue to reiterate their hopes
that talks will resume soon, 25X1
they have given little indica-
tion of an intent to make s
stantive concessions.
The PAG "package" almost
certainly includes French rec-
ognition of the PAG as sole
Spokesman for Algeria, and
French admission that the
Sahara is an integral part of
Algeria. Military bases also
would have to remain under Al-
gerian sovereignty. Dahiab said,
however, that the PAG wanted
to keep French settlers in Al-
geria for economic reasons and
was willing to make it attrac-
tive for them to stay.
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The rebels continued to be
concerned over efforts by France
to revive interest among coun-
tries bordering on the Sahara
in joint programs for develop-
ment of its natural resources.
PAG officials reportedly plan
to visit each country concerned
to argue that any problems con-
cerning the Sahara can be set-
tled after Algerian independence.
Meanwhile, the Algerian
rebels continue to receive sig-
nificant foreign military and
financial support. On 12 June
a Soviet ship at Casablanca
began off-loading 1,300 tons of
arms and ammunition, most of
which was probably destined for
the FLN. Soviet bloc shipments
to the FLN via Morocco since
November 1960 are estimated to
total 4,500 tons. The shipments
are believed to have contained
mostly explosives, small arms
and ammunition 25X1
A Mexican press statement
suggests that bloc jet trans-
port aircraft will soon begin
using Havana's Jose Marti
International Airport, which
was closed to most traffic for
an indefinite period beginning
on 20 June.
the
airport had been close to
permit lengthening of its land-
ing strips in order to accommo-
date jet aircraft. A Havana
"planes of friendly nations"
to refuel in the Azores en
route to Cuba.
Cubana Airlines, which has
maintained regular service be-
tween Prague and Havana since
the conclusion of a civil air
agreement with Czechoslovak Air-
lines last March, has had dif-
ficulty securing landing rights
for refueling purposes along
the route. It is possible that
bloc-made jet transports with
a longer flying range will be
leased or sold to Cubana through
Czechoslovakia in order to solve
the problem. The more likely
user of jets, however, is the
Czech airline, which is expect-
ed to initiate its own regu-
larly scheduled flights to
Havana in the near future.
The Cuban radio and press
were enthusiastic over a re-
port on 21 June that Soviet
astronaut Yuri Gagarin would
visit Cuba for the celebrations
on 26 July of the eighth anni-
versary of the Castro movement's
first attack on the Batista
regime. Government propagan-
dists contrasted the visit with
the recent trip to South America
of Ambassador Stevenson, whom
they attacked as a "merchant of
aggression" who "aims to corrupt
human.minds and hire cannon
fodder."
newspaper article on the fol- 25X1
lowing day said the runway ex- Alfonso
tension was undertaken because Gutierrez, Mexican director of
Portugual has refused to permit the Cuban National Petroleum
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Institute (IN?), has been dis-
missed and replaced by a Soviet
engineer.
Gutierrez said that
top Cuban leaders sought to
persuade him to remain in Cuba
as chief of the Geological
Institute, one of the four new
enterprises.
Sporadic incidents of anti-
Castroiactivity within Cuba con-
tinue'to be reported, but the
government apparently. has moved
quickly and efficientli against
the instigators in most cases.
CONGO
Plans for convening parlia-
ment on 3,July--with the twin
aims of installing a new.govern-'
ment and drafting a new consti-
tution--have been jeopardized
once again, by Katanga President.
Moise Tshombd.
On 24 June, Tshombd was re-
leased from his Leopoldville de-
tention by the central govern-
ment after he agreed to send a
Katanga delegation to parliament.
According to Premier Ileo,
Tshombe also agreed to reunite
Katanga with the Congo and to
cease separatist activity such
as the printing of Katangan cur
rency. Back in Elisabethville,
however,'Tshombd on 26 June at-
tacked [leo and 'other Congolese
leaders with whom he, had sworn
eternal friendship at the time
of his release. In a speech on
28 June, he stated that Katanga
would remain "independent," and
implied 'that he would not send
a delegation to. parliament.
In time, Tshombd may be
forced to modify his intransi,
genre. by pressure from Leopold-
ville, his own subordinates, or
the UN. For the short term,
President Quadros' announce-
ment on 21 June that he had
ordered a study of the possibil-
ity of increasing Brazil's
trade with Cuba is mainly a
political gesture. According
to a Havana radipbroadcast on
22 June, Quadros also appointed
a committee to prepare a Brazil-
ian "industrial exhibit" to be
sent to Cuba. Brazilian-Cuban
trade has in the past accounted
for less than one percent of
each country's total trade,
and their principAl, e*ports
are competitive. Quadros was
probably interested in making
a public pronouncement satis-
factory to Brazilian leftists
in order to offset the effect
of strong action which he took
recently against striking pro-
Castro students in Recife.
however, a boycott of parliament
by Katanga would weaken the rel-
ative strength of the anti-
Gizenga bloc and may force Leo-
poldvi'lle leaders to seek a post-
ponement. A delay would damage
the prestige of the central gov-
ernment and strengthen the de-
termination of Gizenga's sup-
porters.
The American Embassy in
Leopoldville estimates that the
Congo's best hope is for a
moderate government in which
Gizenga'a faction has representa-
tion but not control.
A European businessman
who travels widely in the Congo
was impressed in mid-June by
the continued deterioration in
economic conditions, particular-
ly the shortage of trade goods
and unemployment. By contrast,
he felt the general political
outlook to be more hopeful, de-
spite an atmosphere of insecu-
rity in Katanga which "had not
yet had its revolution." He
speculated that in the re-
mainder of the Congo, "sobri-
ety now was setting in."
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET ECONOMIC PROGRAM
Khrushchev, speaking at Al-
ma Ata on 24 June, promised So-
viet consumers they could expect
major material improvements as
a result of the long-range ec g-
nomic plan in the party program
to be published on 30 July and
presented to the 22nd party
congress in October. His state-
ment that "the light and food
industries wily. develop rapidly
side by side W th heavy indus-
try" was the first suggestion to
the Soviet public of the change
implied by his informal remarks
to Western newsmen at the Brit-
ish Trade Fair in Moscow on 20
May; he did not, however, re-
peat the specific promise that
the rates of growth for light
and heavy industry would be
virtually equalized.
Any change in favor of the
Soviet consumer is significant
because it reflects an adjust-
ment of the long-standing pri-
ority of heavy industry. It is
probable, however, that Soviet
planners foresee only a modest
change in the relationship be-
tween light and heavy industry.
Since the light industrial base
is small, it could be substan-
tially expanded without signifi-
cant diversion of reserves away
from heavy industry.
The regime announced early
this year that the rate of over-
fulfillment of some industrial
goals would be cut back in or-
der to achieve a better balance
in the economy and provide addi-
tional support to lagging agri-
cultural production. The con-
tinuing failure to achieve
planned agricultural goals, to-
gether with some of Khrushchev's
earlier remarks on the subject,
suggests that the reduction in
the disparity between the growth
rate for heavy industry and
consumer goods may be made for
the most part by a transfer of
resources to agriculture.
Elsewhere in his speech,
Khrushchev predicted popular
enthusiasm for long-range eco-
nomic goals, which presumably
will be presented in the form
of a 20-year plan in the party
program. The program will be
portrayed as the instrument
for the defeat of capitalism
by peaceful means and the blue-
print for the final stage of
the "building of communism" in
the USSR.
Khrushchev's words to the
Kazakhs, who were commemorating
the 40th anniversary of their
republic, were less reassuring.
This problem republic, where
rapid industrial and agricul-
tural development has been ac-
companied by serious housing
and consumer-goods shortages,
major agricultural problems,
several political shake-ups,
and at least one major strike,
was chided for "completely un-
satisfactory" work thus far this
year on housing and construc-
tion plans. Khrushchev hinted,
however, that funds for housing
construction--at least in 25X1
Kazakhstan--may be increased
if presently allocated funds
are properly spent.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
EAST GERMAN FOOD SHORTAGE
In early June the East Ger-
man Government was forced to
institute limited rationing of
butter; meat supplies have also
declined. These difficulties
stem in part from the effort to
complete agricultural collec-
tivization in 1960, from Chi-
nese failure to meet contracts
for delivery of oil seed crops
for production of margarine,
and from abnormally wet spring
weather.
The East German diet has
always been basically similar
to that of West Germany, though
less diversified. The quality
of East German foodstuffs is in-
ferior, however, and during the
past ten years the East German
consumer has frequently faced
temporary shortages. This
chronic problem now appears as
a shortage of dairy products
and, to a lesser extent, of meat,
but in other years potatoes,
vegetables, and grain have been
scarce. Currently, total food
supplies--measured by caloric
content--are at about the same
level as during the same period
of 1960--perhaps slightly higher.
Shortages will continue
for some time. Since milk pro-
duction should be at its highest
level in June, the normal sea-
sonal decline of milk production
during the summer may intensify
the problem. Similarly, supplies
of meat usually reach a high
level in June and July, then de-
cline until the fall slaughter in
October.
Acting Premier Willi Stoph,
in a speech at Markkleeberg on
14 June, admitted that diffi-
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culties exist in the supply of
milk, butter, and meat. He
blamed this on the failure of
local governments to assure con-
tinuous supplies through proper
purchasing programs and on the
failure of collective farmers
to meet planned state quotas.
East German press reports have
attributed a lag in spring field
work and a high rate of spoil-
age of early fodder crops to the
unusually heavy rainfall during
May and early June.
East Germany is always de-
pendent on imports of food, which
usually amount to about 30 per-
cent (by value) of total imports.
Currently, however, the bloc has
little food to spare for the
relatively well-fed East Germans,
and the regime must use hard
currency if it is to satisfy its
consumers. Communist China's
recent cancellation of deliveries
of oil seed to East Germany has
compounded the import problem,
and a continuation of recent sup-
plementary purchases, such as
the unplanned importation of
butter from Denmark in the first
quarter of 1961, will cut into
the foreign exchange available
for import programs which are
more in line with the regime's
industrial objectives.
While it is highly unlikely
the regime will attempt to re-
enlist the support of the farmers
to the extent of modifying its
collectivization program, other
measures to increase output--
such as changes in the pricing
system--are possible. To avoid
greater discontent, the regime
could make additional outlays of
hard currency for imports of
quality foods.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Party First Secretary
Novotny announced a consider-
able reshuffle of Czechoslova-
kia's party and government
leaders at a central committee
meeting on 22 June; the moves
were almost wholly designed to
improve control of agricultural
production. He severely crit-
icized the performance of local
government functionaries in
carrying out agricultural poli-
cies, and announced that a com-
mission for the direction of
local government will be es-
tablished under the supervision
of a deputy premier.
Increasing parochialism
among local officials and their
desire not to alienate the
farmers have complicated
Prague's ambitious plans, de-
spite the transfer of thousands
of central party and government
bureaucrats to rural areas
during the territorial reorgan-
ization last year. Novotny
wants to "eliminate the differ-
ences between rural and urban
areas by 1970," in part by
making the rural population
dependent on state-dispensed
wages for their incomes.
Apparently a major role
will be played by the new com-
mission, and a number of local
government officials may be
replaced when it becomes active.
It may be headed by Rudolf
Barak, who was relieved of his
position as interior minister
and has not yet been reassigned.
Barak retains politburo member-
ship and his post of deputy
premier.
Novotny named a member
of the party secretariat, for-
mer Agriculture Minister Lubom-
ir Strougal, to head the In-
terior Ministry, which has some
responsibility for overseeing
local compliance with party
policy. The division of these
responsibilities between the new
commission and the Interior Min-
istry has not yet been announced.
The former party secretary
in charge of agriculture,
Vratislav Krutina, has replaced
Strougal as agriculture minister.
The appointments of Strougal and
Krutina put the party's top
agricultural experts in govern-
ment posts where they can exert
maximum influence. In related
shifts, Novotny named Jindrich
Uher, who was minister of the
food industry, as internal trade
minister, a post which controls
retail distribution of food prod-
ucts; Josef Krosnar, former min-
ister of state control, has re-
placed Uher in the Food Ministry.
Changes in the party lead-
ership, most of them apparently
necessitated by the government
shuffle, included the transfer
of two members out of the party
secretariat to concentrate on
their governmental posts, and
the promotion of three high-
ranking party leaders to still
higher party posts. Other un-
specified personnel actions were
approved by the central committee;
this may signify purges among
secondary-level government and
party officials.
Agriculture is the weakest
sector of the economy; production
has barely surpassed the pre -
World War II level. The regime
hopes to increase output 23 per-
cent during the Third Five-Year
Plan (1961-5) through the amal-
gamation of collectives, in-
creased investments, better
management, and a pressure cam-
paign to complete the five-year
quota in four years. The
chances of achieving these
goals are slim.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
GROWING POLICE POWER IN POLAND
The Polish regime's ef-
forts to increase its controls
over political, economic, and
cultural affairs have been ac-
companied by the development of
enhanced police prestige and
authority. Since late 1959 a
growing number of "Stalinists"
--who were key members of the
former Bierut regime--have re-
turned to positions of promi-
nence and power within the party
and government; they apparently
have accelerated the trend to-
ward administrative rather than
established legal procedures
of control.
Many Poles have reported
widespread concern among knowl-
edgeable Polish citizens and
have dated the manifestations
of new police power from April
1960, when Brig. Gen. Kazimierz
"Gaspipe" Witaszewski took over
the administrative department
of the party central committee
--a position allowing him to
influence the staffing of police
and intelligence organs. A re-
cent shake-up in the office of
the prosecutors-general has
been ascribed to Witaszewski,
who is said to have installed
his hard-line proteges in all
top posts.
Much of the growth in
police activity has been related
to the regime's strenuous effort
to `improve controls over the
economy. The effectiveness of
this campaign has been striking-
ly illustrated by figures re-
leased in Warsaw on 24 June
which showed that 1,945 civil
servants were sentenced for
corruption in 1960--as compared
with only 91 in 1959. The death
penalty for economic offenses
was introduced in late 1960.
Since then, several secret sum-
mary trials, from which there
is no appeal, have imposed
severe punishments--although
the one death sentence was
later rescinded.
Westerners in Poland have
observed several instances of
police strong-arm methods, in-
cluding the recent beating of
loiterers in Warsaw and the
harshly conducted arrests of
many unruly spectators at a
hotly disputed Polish-Soviet
soccer game. Those arrested
subsequently were sentenced to
three months in jail.
A prominent Communist in-
tellectual recently told US
Embassy personnel that he was
discouraged by the "re-emergence
of repression" in Poland. He
said that methods based on force
were used and approved by party
officials who believed them to
be the only effective means of
control. He hinted that there
were differences of opinion at
the highest party levels on the
efficacy of such measures, but
he added--somewhat cryptically
-that there was little hope
for a change until next year.
Security considerations
have been receiving progressive-
ly greater weight in Polish
handling of contacts with for-
eigners. Many Polish citizens
who have contacted foreign dip-
lomats recently have been in-
terrogated, warned about future
contacts, or urged to report
concerning these relations; of-
ficial action of this kind was
infrequent in the past. More-
over, it is becoming ihcreasing-
ly difficult for Poles to get
passports.
There have been several
reports of interrogation of
tourists by militia or secret
police; priests and former
Polish citizens have been among
those most frequently questioned.
Administrative regulations gov-
erning foreigners in Poland
have been purposely made con-
fusing in order to provide the
Interior Ministry with a pre-
text for expulsion.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Polish practices still do
not approach in severity in-
ternal security measures of
other European satellites.
There is no indication that a
return to the open police bru-
talities of the Stalinist era
is contemplated. Nevertheless,
it is apparent that Polish police
activities at all levels have
become more efficient, more per-
vasive, and more restrictive
than at any time since 1956.
The struggle between the
group of younger officers sup-
porting Maj. Gen, Pak Chong-hui
and senior officers led by Lt.
Gen. Chang To-yong, nominal
head of the Supreme Council for
National Reconstruction (SCNR),
appears to be intensifying.
The inner circle of the junta
led by Pak has not yet consoli-
dated its control over the
military
Pak appears to be moving
toward ever-increasing police
state controls to assure his
position. Security-boss Lt.
Col. Kim Chong-pil has ordered
the armed forces purged of all
personnel involved in antirevo-
lutionary or anti-Pak activities.
Kim Chong-pil and Pak have
been close associates since the
inception of the 16 May coup.
On 14 June, Kim was named
director of the newly organized
South Korean central intelli-
gence agency, which has responsi-
bility for coordinating the
collection of information, in-
cluding military, and investi-
gation of all matters at home
and abroad related to national
security and criminal activity.
Recently promulgated ex
post facto laws are so broadly
drawn that almost any person
regarded as a threat to the
junta could be accused of some
act making him liable to the
death penalty or a long prison
term. Retired Lt. Gen. Song
Yo-chan, newly appointed de-
fense minister, has observed
that the situation within the
Supreme Council and nation can
be stabilized only by the
emergence of an unchallenged
leader.
Meanwhile, public refer-
ences by the regime to its
initial pledge to return the
government to civilian control
are becoming more vague. The
appointment of the first two
civilian cabinet ministers on
22 May--to head the Ministry
of Finance and the Ministry of
Economic Development--is not a
harbinger of an early return
to civilian authority, although
additional civilians may be
appointed to head other largely
economic ministries. 25X1
The relative quiet that vicinity of the demilitarized
has prevailed along the Israeli- zones. Only one death has been
Syrian border for several months reported from the nine incidents
was interrupted last week by a between 19 and 25 June, but the
new series of incidents in the flare-ups could presage further
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CURRENT INTELLIGENCE WEEKLY SUMMARY
ISRAELI -SYRIAN
BORDER AREA
Canal or conduit,
proposed or under construction
\\\\\ Demilitarized Zone
UAR
EGYPT
Tel Aviv - Jaffa ~
I `.
GAZA
25X1 sro p
NEGEV
DESERT
and more serious trouble along
the border. Sporadic firing has
continued.
Israel has informed the UN
Security Council of its concern
over recent Syrian actions. The
UN chairman of the Israeli-Syrian
Mixed Armistice Commission be-
lieves personnel in Syrian bor-
der posts now are taking a tough-
er line toward Israeli activities
in and near the demilitarized
zones.
Israel's attitude toward
the border situation may well
be conditioned by the election
campaign now under way in Israel.
Ben-Gurion probably could en-
hance his Mapai party's election
prospects by ordering vigorous
retaliation against Syrian
"attacks."
Israeli road construction
immediately adjacent to the
northernmost demilitarized zone
apparently precipitated the ex-
changes of fire on 19 and 20
June. Four of the recent in-
cidents occurred in that vicin-
ity and five were in the vicin-
ity of the central zone north
of Lake Tiberias.
In one of the latter inci-
dents, an Israeli watchman was
killed and another was wounded
at a work camp near the pumping
station the Israelis are build-'
ing as part of their Jordan
River diversion project. The
project, which has aroused the
hostility of all Arab states,
has stimulated new efforts on
the part of the Arabs to co-
ordinate their military plans
and operations.
Earlier this month the
Arab League's Defense Council,
consisting of the foreign
and defense ministers of mem-
ber states, met in Cairo to
consider a UAR proposal for a
joint command. The establish-
ment of such a command was
one of the features of the
1950 Arab collective security
agreement; it has not been
realized because of inter-
Arab differences which have
frustrated most attempts to
achieve effective Arab unity.
Reports since the recent
Cairo meeting indicate that
agreement on the principle of
forming a joint command was
reconfirmed. Unanimity will be
much more difficult to achieve
on actual arrangements to make
the joint command structure an
effective mechanism. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Current NATO discussions
of long-term strategic planning
point up the divergence between
Britain's growing concern with
defense costs and the German
and Turkish emphasis on mili-
tary problems. There is general
endorsement of a build-up of
conventional, forces, but agree-
ment has not been reached on
the role of nuclear weapons.
Efforts to secure agreement be-
fore the annual NATO ministerial
meeting in.December appear like-
ly to focus more attention on
methods of sharing defense costs.
British representatives to
the North Atlantic Council (NAC)
contend that in view of the al-
liance's limited resources, the
council should make the essen-
tially political judgment of
what kind of Soviet attack is
most likely and then instruct
the military authorities to plan
accordingly. The British stated
on 23 June that an attack in-
volving from three to five So-
viet or satellite divisions
seemed most probable. For any
Soviet attack that conventional
.forces cannot contain, London
wants NATO first to use only
tactical nuclear weapons and
to resort to strategic weapons
--expected to signal general
war--only if these prove inade-
quate.
Britain's economic diffi-
culties govern its interest in
limited nuclear war. With the
conscription call-up ended, Lon-
don is not prepared to supply
the men for larger conventional
forces. Chancellor of the Ex-
chequer Selwyn Lloyd warned on
22 June that Britain must re-
duce overseas military expendi-
tures. NATO Secretary General
Stikker believes that London's
position stems largely from its
desire to get the Germans to
offset the drain on Britain's
balance of payments incurred in
maintaining British forces in
Germany.
Many of the allies are un-
easy at the concept of limited
war. West Germany and Turkey,
as the most geographically ex-
posed, are pressing their long-
standing campaign for a forward
strategy based primarily on mil-
itary rather than economic con-
siderations. Bonn's representa-
tive told the NAC on 23 June
that NATO's deterrent, to be
credible, must be ready for any-
thing, since the attacker can
decide priorities. His specific
points dealt largely with strength-
eningthe nuclear aspects of
NATO's program.
The Turkish representative
agreed with the Germans that
NATO must be ready for the worst
possible Soviet attack and must
base strategy on such facts as
geography and Soviet military
dispositions rather than on ques-
tionable estimates of Soviet in-
tentions. He urged obtaining
NATO military commanders' ideas
on these matters, but he cautioned
that the results might show that
allies.
Turkey needed more aid from its
ARGENTINA
President Frondizi and his
Intransigent Radical party
(UCRI) are taking steps to ob-
tain Peronista support in the
March 1962.elections, in which
half of the Chamber of Deputies
will be renewed and provincial
officials elected. These elec-
tions will vitally affect Fron-
29 June 61
dizi's ability to continue his
economic stabilization program
and will influence the presi-
dential contest in 1964. His
need for additional electoral
support is underlined by the
unpopularity of economic meas-
ures, like his recent railroad
reform program which will cut
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CURRENT INTELLIGENCE WEEKLY SUMMARY
some 75,000 workers from the
payroll.
Peron's orders to his fol-
lowers to support the UCRI in
1958 helped give-Prondizi his
landslide victory. Not all of
Peron's instructions have been
obeyed by his followers in the
past, but his endorsement of a
qualified candidate could be
decisive, as it was in 1958.
An official UCRI communi-
que on 21 June appeared intended
to attract Peronistas as well
as others. The nonutunique be-
latedly endorsed Prondigi's
1959 suggestion that political
parties broaden their organiza-
tions "to permit the election
of men from all sectors who
want to collaborate in the
development program of the
government."
Influencing the UCRI bid may
be the Peronistas' policy de-
cision on 5 May to drop their
blank-vote tactic and bargain
with other parties. Their sup-
port in the elections in a small
town on 4 June brought victory
to a pro-Communist and pro-Castro
faction of the Socialist party.
Since the Socialist party won the
February elections in the federal
capital with strong although un-
official Peronista support, both
Peronista and anti-Peronista
leaders have voiced concern
about the growth of pro-Castro
sentiment among the split Peron-
istas and about Communist infil-
tration of the several neo-Peron-
ista parties. 25X1
Violence broke out again
this month in the predominantly
German-speaking South Tirol
province of Italy, with damage
estimated at over $4,000,000 to
power lines and other installa-
tions. Talks between the Ital-
ian and Austrian foreign minis-
ters over the I'irolese demand
for greater autonomy broke down
on 24 June, and a new Austrian
appeal to the UN is in prospect.
29 June 61
In the five-day conference
between Italian and Austrian
experts which preceded the for-
eign ministers' talks, it was
evident that the Austrians con-
sidered Italian offers ''of great-
er administrative autonomy un-
acceptable without greater leg-
islative autonomy.;- According
to the Austrian press,
radical elements apparent-
ly made gains at the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Approximate area of German
speaking population in
northern Italy (South Tirol)
Region boundary
Province boundary
recent conference of the South
Tirol Peoplets party.
Some Italian officials be-
lieve that Austrian officials
have been encouraging the ex-
tremists and even participating
in the planning and implementa-
tion of their activities; how-
ever, it seems more likely that
the disturbances have been
instigated by Austrian terror-
ist societies and pan-Germanic
groups. The Austrian press
has generally condemned the
recent violence as inimical
to the best interests of the
South Tirol.
The Italians have long fa-
vored bringing the South Tirol
issue before the International
Court of Justice (ICJ), while
Austria has pressed for UN ac-
tion. Last year Vienna brought
the matter to the General As-
sembly, which recommended bi-
lateral negotiations.
The head of the Austrian
delegation to the preparatory
conference of experts told the
US Embassy in Vienna on 27 June
that the outlook for a solution
seemed "hopeless." He said
his government was under"almost
irresistible" pressure from
the extremists and would have
no choice but recourse to the
UN if the Italians insisted on
resort to the ICJ.
Tension remains high in
the South Tirol, and further
unrest is likely. Italian
rightists, who have long dis-
trusted Premier Fanfani for his
views on various domestic issues,
might try to use such outbreaks
as a means of overthrowin his
minority government.
The agricultural disturb-
ances which spread rapidly
in mid-June from Brittany
through central and southern
France are, like the labor
agitation last spring, aspects
of the underlying social unrest
hitherto held in check by De
Gaullets prestige and his pleas
for national unity. The dis-
content led to outbreaks partly
because, under the Fifth Republic,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
parliament and the political
parties are no longer adequate
channels for airing popular
grievances. Parliament's
frustration over its inability
to influence government policy
led it to defeat the government
on two minor issues on 27 June.
While touched off by a
drop in certain commodity prices,
the unrest appears to be based
on economic difficulties of a
structural nature. Agricultural
production is still far from
modernized, and farm income has
been kept low by an antiquated
marketing system, competition
from farmers outside ;Frances ,
and a policy of relatively low
agricultural price supports.
Especially in Brittany, farm
association leaders feel that
farmers have not had an equita4
ble share of France's economic
growth under De Gaulle.
The government's remedial
program has hitherto centered
on marketing reforms and other
long-range improvements. A
meeting between government and
farm leaders planned for 29
June may result in some limited
government concessions, but
there is no indication that the
government will meet farmer de-
mands for broader relief now.
T'ze farm agitation is likely,
SECRET
however, to stiffen French demands
that the Agricultural provisions
of the European Economic Community
treaty be put into effect in order
to facilitate the movement of
surplus French production to the
other members of the EEC.
At least in the initial in-
stances, the roadblocks and
protest meetings were directed
by younger farm elements, and
officials of the traditional
agricultural organizations
were hesitant about backing
the agitation. Attempts by
both Communists and extreme
rightists--including some
associated with the Organiza-
tion of the Secret Army in
Algeria--to exploit the move-
ment seem to have been unsuccess-
ful.
The government, however, has
not ruled out the 25X1
hypothesis that the demonstra-
tions are part of a plan to
weaken De Gaulle's political
position and tie down security
forces in areas remote from
Paris. Security forces in
France Are considered barely
adequate for normal coverage,
and government spokesmen have
in the past voiced alarm when
police units have been tempo-
rarily transferred to Algeria.
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SPECIAL ARTICLES
COMMUNIST BLOC AGRICULTURAL PROBLEMS
Recent farm problems in
the Communist bloc have pointed
up the sharp disparity between
the agricultural situation in
the United States and that in
the Communist countries. With
an agricultural labor force
about one seventh the size of
that in the Soviet Union, the
United States produces one-
third more'. During the last
decade US agricultural output
increased 25 percent and pro-
duction per person employed in
agriculture rose two thirds;
Soviet agricultural output,
stagnant under Stalin, increased
50 percent between 1953 and 1958
under the stimulus of Khru-
shchev's programs and good
weather but has not grown since.
Severe agricultural problems
in Communist China have led to
widespread malnutrition and the
use of scarce foreign exchange
for unprecedented imports of
farm commodities from the West.
In a speech to the party
central committee plenum held
last January to discuss agri-
cultural problems, Khrushchev
described agriculture as "out
of step" with industry and the
demands of the consumer and
called for organizational
changes, an increase in agri-
cultural investment, and the
introduction of new material
incentives for improving the
quality and quantity of farm
production. An extensive shake-
up of Soviet officials at all
levels has since occurred, and
charges of corruption, ineffi-
ciency, and falsification of
agricultural reports have been
leveled.
Among major organizational
changes now being implemented,
the Ministry of Agriculture,
heretofore in charge of the
entire agricultural operation,
has been restricted to the much
smaller responsibility of con-
trolling practical agricultural
research work and disseminating
the results of such work. An
elaborate new national organ-
ization--an "all-union associa-
tion"--has been created to sup-
ply farms with equipment, spare
parts, fertilizers, and other
production needs; to coordinate
production plans for these items
with the State Planning Commis-
sion (Gosplan), the factories,
and the farms; and to control
the repair and testing of farm
equipment.
A State Committee for Pro-
curements was also established
to control collection of agri-
cultural products through a
system of contracts with col-
lective and state farms. It
also was given the duty of
checking on individual farm
performance and informing re-
sponsible officials of short-
comings. These are only the
latest in a series of major
innovations in Soviet agricul-
ture introduced by Khrushchev
in an attempt to raise output
and labor productivity.
Stalin, who gave over-
whelming priority to industrial
expansion, depended mainly on
compulsion for the direction of
agriculture, whereas Khru-
shchev has relied more on in-
centives and increased invest-
ment. Prices paid by the state
for agricultural products have
several times been raised and
farm taxes have been reduced;
attempts have been made to es-
tablish a real link between
individual income and produc-
tion; and collective farms have
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CURRENT INTELLIGENCE WEEKLY SUMMARY
COMPARATIVE AGRICULTURAL STATISTICS
( PRELIMINARY DATA ON 1960 OUTPUT )
Grain
Meat
Milk
Cotton
(million
(million
(1,000
(1,000
metric
tons)
metric
tons)
metric
tons)
metric
tons)
UNITED STATES
193
12.2
57,152
3,115.5
SOVIET UNION
100
5.9
54,100
1,470.0
COMMUNIST CHINA
155
5.2
neglig;ble
1,800.0
EUROPEAN SATELLITES
43
3.2
26,700
28
been allowed to buy their own
machinery--previously owned and
operated by the Machine Tractor
Stations.
In addition, during
1954-56, nearly 90,000,000
acres of idle land (primarily
in northern Kazakh SSR, west-
ern Siberia, and the Volga-Ural
grain region) were brought into
cultivation. To support a
planned expansion of the live-
stock industry, a program for
a large increase in the area
planted to corn was inaugurated
in 1955.
As a result of these and
other changes, there has been
--except during the past two
years--a gradual improvement
in the Soviet diet, which in
terms of calories and general
health requirements is now
probably adequate. It is still,
however, a predominantly "bread
and potatoes" diet, with lim-
ited quantities of such "qual-
ity" foods as meat and vegetable
oils. The failure to improve
the diet in 1959 and 1960 prob-
ably is a source of great cha-
grin to Khrushchev, who only a
few years ago promised that the
Soviet Union would soon surpass
the US in per capita production
of meat and milk,
In Kazakhstan last week
Khrushchev promised the Soviet
people the highest standard of
living in the world as an ob-
jective of the lone-range eco-
nomic plans to be presented at
the 22nd party congress in Oc-
tober; however, he did not use
this-opportunity-to repeat his
boast about overtaking the
United States in meat and milk
output.
Communist China
One of China's primary
problems'for many years has been
to feed a rapidly expanding
population--now estimated at
700,000,000, increasing at a
rate of 2 to 2.5 percent per
year. Even under normal con-
ditions the average Chinese
diet is marginal, not only in
quality but frequently even in
quantity. In a year of low
food production, when certain
areas are particularly hard hit
by natural calamities, sharp
regional differences in diet
result from the inability of
the transportation network to
distribute food supplies evenly.
Peiping's program for eco-
nomic development has been
based on the belief that China
could be industrialized rapidly,
despite technological backward-
ness and the unfavorable ratio
of population to arable land.
Modernization of agriculture
was to await industrial devel-
opment--i.e., until industry
could provide both the re-
sources for further industrial
growth and for increased in-
vestment in agriculture. Such
a program involved a deliberate
gamble that the thin margin be-
tween food production and the
minimum needs of the population
could be maintained.
In 1958 Peiping inaugurated
a series of "leap forward" pol-
icies to strengthen agriculture
and industry. Peasants, organ-
ized into communes, were driven
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CURRENT INTELLIGENCE WEEKLY SUMMARY
to carry out a series of inno-
vations called Mao?s "eight-
point charter," Extraordinary
efforts were made to build ir-
rigation projects and to im-
prove the soil, but results
were minimal; the new meas-
ures were hastily and un-
scientifically applied, ig-
nored practical experience,
and could not be quickly
assimilated under varying lo-
cal conditions, Inflated
agricultural production fig-
ures were announced as part
of the "leap forward" fanfare,
but an official reassessment
in the fall of 1959 sharply
reduced some of the earlier
fantastic claims for 1958.
There have been persist-
ent food shortages in Commu-
nist China since 1959. Grain
output in 1960 was probably
near the 1957 level, when
there were 50,000,000 fewer
people to feed. As a result,
rations were cut to a slow-
starvation level over large
areas, and rations of such
foods as meat, vegetables, and
cooking oil were severely lim-
ited throughout the country;
although now apparently brought
under control, malnutrition
and related health problems
were widespread for a time.
Perhaps the best indicator of
the severity of the shortage
was Peiping's decision to pur-
chase from the West 5,000,000
tons of grain for delivery in
1961,
Elsewhere in the Bloc
In the satellite countries,
agriculture continues to give
the economic planners the most
trouble. In Eastern Europe,
long-term planned rates of
growth for industry have been
achieved or exceeded, but no
major plan for agricultural
output has ever been fulfilled.
The 1955-59 average gross value
of agricultural production was
still below the prewar average
in East Germany, Czechoslovakia,
and Poland--compared with an
average increase of 27 percent
for Western Europe. In the
Far Eastern satellites, agri-
culture remains a serious prob-
lem; food shortages were re-
cently reported in North Viet-
nam.
Reasons for Farm Problems
The typical Soviet re-
sponse to agricultural trou-
bles has been to blame organ-
izations and officials; the
Chinese prefer to blame the
weather. There is some valid-
ity to these assessments, but
they do not tell the whole
story.
Priorities: The leaders
of all the bloc countries, have
deliberately given agriculture
a low priority in relation to
the sector of the economy most
directly related to over-all
economic growth and national
power--e.g., heavy industry.
Among the major results of this
policy are inadequate mecha--
nization of agriculture and the
shortage of fertilizer.
The Soviets have almost
completely mechanized the
major field operations of plow-
ing, seeding, and grain harvest-
ing, but they have only one
third as much tractor horse-
power per plowed acre as do US
farmers, and only one half as
much grain-combine capacity per
acre of small grain. Many impor-
tant farm operations, such as
the cleaning of grain and the
handling of livestock, are still
performed in a relatively prim-
itive fashion. Because of the
shortage of machinery--and the
lack of spare parts and repair
facilities--the Soviets are
frequently unable to get their
plowing and harvesting done on
time, and thus sometimes suffer
excessive crop losses.
The Soviets plan to triple
production of mineral ferti
lizer during the current Seven-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Year Plan, but they are un-
likely to accomplish their
goal.
While his income has been
raised substantially by Khru-
shchev?s programs, the Soviet
farmer remains low man on the
totem pole, with only very lim-
ited economic rewards as an
incentive. As a consequence,
and despite the fact that the
Soviets are training large num-
bers of agricultural special-
ists; the farm labor force is
heavily weighted with the least
economically productive--the
old, the very young, and the
least educated,
Chinese agriculture has
scarcely been affected by mod-
ern machinery; only 5 to 6 per-
cent of the land is cultivated
by mechanical means. The min-
imal investment made in farm
implements has been mainly in
hand tools o The Chinese have
announced varying plans for in-
creasing mineral fertilizer
production, but there is no
possibility that their needs can
be met by domestic production
for many years to come,
Natural Causes: Both the
USSR and Communist China suffer
from severe natural restric-
tions in their attempts to in-
crease agricultural output.
Although only about 10 percent
of the land in the USSR is cul-
tivated (as compared with 20
percent in the United States,
there are no readily available
large areas of uncultivated
land suitable for production.
Much of the land newly plowed
in recent years is of such
marginal productivity that it
would not be cultivated at all
in the United States. The
growing season is short over
most of the USSR; moreover,
those areas with the most fa-
vorable growing temperatures
are generally those with the
least adequate precipitation.
The limitations of topog-
raphy and climate on Chinese
agriculture are revealed by the
fact that, despite the pressure
of population over centuries,
the cultivated area--concentrated
in the eastern third of the coun-
try--still comprises only about
11 percent of the land area.
There is little potential for
any rapid increase in this fig-
ure. The cultivated area in
the US exceeds that in China by
about 75 percent; on a per capita
basis the US figure is over six
times that for China. As a re-
sult of the intensive use of
land through multiple cropping,
however, the sown area some-
what exceeds that in the United
States.
Doctrine: Communist agri-
culture suers seriously from
the ideological biases of its
directors. A prejudice for
gigantism has made the Soviet
farms and the Chinese communes
too large to be efficient eco-
nomic units; a prejudice against
the use of prices for the de-
tailed guidance of farm man-
agers makes it extremely dif-
ficult to give appropriate
instructions and incentives;
and an apparent failure to un-
derstand the nature of agricul-
ture as a biological industry,
with inherent uncontrollable
elements, has led to premature
attempts to establish factory-
type methods and organizations.
A basic distrust of in-
dividual initiative and enter-
prise has made it impossible to
decentralize decision making
effectively. A totalitarian
party authority has repeatedly
sought to impose on agricul-
ture a variety of ill-consid-
ered and untested panaceas.
Collectivization: The de-
gree to which collectivization
per se has affected agricul-
tural production is difficult
to assess for the bloc as a
whole.
In the Soviet Union, col-
lectivization--essentially com-
pleted before World War II--was
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CURRENT INTELLIGENCE WEEKLY SUMMARY
introduced forcibly at a ter-
rible cost of lives and result-
ed in a major setback to pro-
duction. Even today, however,
there remains a noncollectiv-
ized sector--small private plots
and livestock maintained by in-
dividual peasant families on
both the collective and state
farms. In the aggregate, this
subsidiary agriculture provides
an important share of the food
for the Soviet consumer, and
Khrushchev's attitude toward it
has been to exercise moderate
but persistent pressure toward
its eventual abolition.
Collectivization took sev-
eral forms in Communist China.
The most notable was the much-
publicized commune system in-
troduced in 1958. This form of
organization has not proved a
success, either in organizing
production or in forwarding
communal living, and has disin-
tegrated to the point where the
commune is hardly more than a
federation of collective farms.
Rapid progress in collec-
tivization in Eastern Europe has
been accompanied by disorganiza-
tion of production and passive
resistance by the peasants.
Poland, the one satellite which
has not pushed collectivization,
has shown the largest rise in
agricultural production in re-
cent years.
Yugoslavia offers an in-
teresting case study in agricul-
tural collectivization. Since
abandoning this form of agricul-
tural organization in 1953 and
subsequently adopting more
liberal policies favoring agri-
culture, Belgrade has in-
creased gross agricultural out-
put by a faster rate than any
of the European satellites.
Statistical Falsification:
Statistical malpractices by of-
ficials at practically all ad-
ministrative levels throughout
the Communist bloc present prob-
lems to the economic planners;
to the extent that falsifications
cannot be accounted for and ad-
justments made, the operation
of the economy suffers.
In the USSR, unusual dis-
tortions in agricultural data
apparently had been on the in-
crease in recent years and had
reached the point where the re-
gime felt impelled to take mas-
sive action. In January, Khru-
shchev soundly condemned falsi-
fication with the statement
that one cannot "eat statistics.
Since then, numerous "cases" of
falsification have been exposed
in the press, and on 24 May the
Kremlin decreed that padding of
production reports would be
punishable by imprisonment of
up to three years.
The exaggeration of agri-
cultural statistics has also been
a serious problem in China. It
is not clear, however, to what
extent exaggerations are the
result of manipulations by cen-
tral authorities or, as apparently
is the case in the USSR, the
result of efforts by local of-
ficials to cover up poor per-
formances.
The various bloc regimes
apparently are now facing up to
the fact that agriculture should
be accorded a higher priority
with increased rates of invest-
ment. More realism is discernible
in other areas as well: the Chi-
nese have backed off somewhat
from the excesses of their commune
experiment, and the Soviets have
at least given lip service to
the need for permitting agricul-
tural experts to make technolog-
ical decisions, free from politi-
cal interference.
In the long run, in spite
of natural limitations, the ra-
tional application of scientific
methods offers the Communist coun-
tries the possibility of an ef-
ficient and productive agriculture.
In the next few years they should
be able to increase agricultural
output faster than population
growth and thus to raise living
standards or export agricultural
products. Even with advanced
technology, however, agriculture
will remain essentially different
from most industrial activities,
and to be efficient will require
a large degree of decentralized
decision making. It is not clear
whether the Communists have suf-
ficient flexibility to operate
such a system effectively.
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POLITICAL IMPLICATIONS OF A BRITISH ACCESSION TO COMMON MARKET
Far-reaching consequences
are implicit in Britain's moves
toward membership in the Euro-
pean Common Market (EEC). While
there is still skepticism re-
garding London's bona fides
toward the European movement,
responsible British officials
have said that EEC affiliation
would mean wholehearted British
participation in Europe's eco-
nomic and political unification.
Should this prove to be true,
fresh impetus would be given a
process already making notable
strides; major readjustments in
the pattern of intra-European
and Atlantic relationships
would almost certainly follow;
and a new component might even-
tually be added to the balance
of world power.
Institutional Changes
Even without major changes
in the Common Market treaty,
Britain's accession would imply
substantial modification of the
political basis of the EEC. In
part this would be a matter of
adapting institutions, the most
important of which are the Par-
liamentary Assembly, the Com-
mission, and the Council of
Ministers.
In the assembly, Britain
could not hope to obtain more
than parity of representation
with France, West Germany, and
Italy. This would appear to
involve no insoluble problems,
however, nor would Britain's
participation in the Commission
--the EEC's independent admin-
istrative and executive body.
At present, no more than two
of the nine commissioners may
be nationals of the same state,
however, and their appointment--
by agreement among the member
countries--would become a more
delicate process than before.
difficult problem would be ad-
justment of the voting rules.
Many council decisions require
unanimity, but the treaty pro-
vides for gradual curtailment
of veto rights as the community
develops. In the present six-
member council, four votes con-
stitute a majority in some in-
stances, but provision is also
made for "prescribed majorities"
in which the national votes are
weighted. Such procedures
would be difficult to change--
even in the case of a simple
majority, it will make material
difference to the community's
future whether four votes con-
tinue to constitute a majority
in a council enlarged to seven
members, or whether the re-
quired number is increased to
five.
Institutional Operations
These seeming technical-
ities gain additional signif-
icance because of the institu-
tional issues which have long
troubled the EEC.
Although the Common Market
was federalist inspired, true
supranationalism was realized
only to a comparatively limited
degree--and that not so much in
the powers of the independent
executive or the assembly as in
the application of the majority
principle to the council, where
decisions are ultimately made.
As a practical matter, the EEC's
hybrid institutions have func-
tioned comparatively well, al-
though their defects have be-
come increasingly apparent in
recent months. Nevertheless, ef-
forts of the federalists over
the past three years to strength-
en the Commission and make the
assembly a true parliament have
been regularly contravened by
the nationalists, led by France.
Like the founding members,
Britain would be represented by
a cabinet-level minister on the
EEC Council, and here the most
It is by no means certain
on which side of this issue
Britain's weight would ulti-
mately fall. London has regularly
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CURRENT INTELLIGENCE WEEKLY SUMMARY
GENERAL
PURPOSE
EUROPEAN PARIAMENTARY
PARLIAMENTARY ASSEMBLY
CONTROL
142 members chosen by national
parliaments of 6 member coun-
tries.
EEC COUNCIL CSC COUNCIL
OF MINISTERS OF MINISTERS
EURATOM COUNCIL
OF MINISTERS
One cabinet-level representa-
POLICY tive of each state, usually
FORMATION, foreign or economic ministers.
COORDINATION,
& EXECUTION
5-9 members appointed by agree-
ment among member states or
co-opted.
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Reviews and debates annual re-
ports of the three communities.
May compel executive commissions
and CSC High Authority to re-
sign.
Formulate general community pol-
icies and harmonize related na-
tional policies.
Majority principle tends to re-
place unanimity as treaties are
implemented.
Generally supervise application of
the three treaties.
Recommend community policies-- in
some cases councils must be
unanimous to overrule.
7 judges and 2 advocates ap-
JUDICIAL pointed by agreement among the
CONTROL member states.
Interprets and reviews legal ap-
plication of the three community
treaties.
ORGANIZATIONAL CHANGES
UNDER CONSIDERATION
1. Pending draft convention
would increase membership to
426, two-thirds to be elected
by universal popular suffrage.
2. New assembly would retain
present powers of review and
debate, but early acquisition
of legislative authority seems
unlikely.
1. De Gaulle's confederation
plan calls for periodic meet-
ings of heads of state and
their principal ministers,
organized by permanent secre-
tariat.
2. Ostensibly designed to
coordinate and concert foreign
and domestic policies of the
member states.
1. Three executives would be
fused into single, enlarged
commission.
2. Enlarged commission would
probably retain existing pow-
ers of its predecessors.
3. Federalists wish to ex-
tend those powers--subject to
Assembly review--but fear new
confederation agencies would
gradually assume direction of
community affairs.
cited the Common Market's supra-
nationalism as an obstacle to
British entry, and it has been
generally assumed that London
shares De Gaulle's distaste for
the bureaucracy at Brussels.
Lately, however, Foreign Office
officials have said that Britain
is prepared to accept not only
the EEC institutions as they
stand, but also the fact that
they make decisions normally re-
served to sovereign states.
Such statements may re-
flect no more than belated
appreciation that the EEC is
perhaps less supranational than
Britain had initially supposed,
but they may also reflect a
realization that the Commission
and aasembly play an important
role, albeit a subordinate one.
That role would likely increase
in importance as Britain's ac-
cession added to the diversity
of the community and to the
complexity of the issues it
confronts. Thus London might
quickly feel the need to contrib-
ute its "political genius" to
devising institutions capable
of mediating national inter-
ests while fostering a commu-
nity point of view.
Balance of Power
The uncertainty surround-
ing such issues is due in part
to the unpredictable impact the
addition of another large power
to the EEC would have on the
present pattern of intra-Euro-
pean relationships. The continued
cohesion of the six nations
which founded the Coal-Steel
Community in 1952 has reflected
their common traditions and ob-
jectives--some of which Britain
does not share. Many observers
believe, however, that the com-
munity would have collapsed by
now but for: the French-German
entente; the tacit if reluctant
acceptance of French leadership;
and De Gaulle's conversion to
the community--not per se, but
as a vehicle for the advancing
French hegemony in Europe.
There is no way of telling
how these political "facts"
would adjust to Britain's par-
ticipationr.but they would al-
most certainly be changed. On
many specific issues of commer-
cial and military policy Bonn
and London are close together,
and Vice Chancellor Erhard has
constantly favored a broader
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CURRENT INTELLIGENCE WEEKLY ' AY
European framework to include
Britain. Conceivably, this
could provide the basis for an
Anglo-German amity tending to
isolate the French.
De Gaulle for obvious
reasons has made no secret of
his distaste for Britain's over-
tures to the EEC. As the only
other European capital retain-
ing world-wide interests and re-
sponsibilities, London would
clearly expect to share Europe's
leadership with Paris. It is
possible that if De Gaulle were
unable to find sufficient ex-
cuse for excluding Britain al-
together, Anglo-French rivalry
would carry over and prove
highly troublesome in an enlarged
community.
Some observers, however,
feel that Britain's membership
would correct a political im-
balance which is an increasing
obstacle to early achievement
of the ultimate goals of the
EEC. Some of the smaller coun-
tries resent "Franco-German
domination"; they question that
French political leadership
alone would continue to con-
tain Germany in the post-Ade-
nauer period, and they see the
British as an additional meas-
ure of security. The Hague, for
example, has stubbornly insisted
that Dutch acquiescence in the
loose European confederation
which De Gaulle has been advo-
cating is contingent on either
independent institutions or
British participation.
Broader European Unity
Moreover, the argument has
been made that an EEC accommo-
dation with Britain would re-
store to the European movement
the harmony it has increasingly
lacked since the collapse in
1958 of Britain's efforts to
form a broad free trade area
of 18 European countries, in-
cluding the EEC. Even though
there was widespread recogni-
tion at the time that the free
trade area was probably unwork-
able and posed grave risks for
the EEC, the reluctance of
many in the Common Market to
see the "division" of Europe pro-
gressively widened has been a
brake on the EEC.
The divisive effect of the
seven-nation European Free Trade
Association (EFTA) would be
ended by Britain's joining the
EEC. Denmark has already said
it would follow Britain into the
EEC, and Norway would probably
eventually do likewise. A sim-
ilar solution is feasible for
Portugal, the remaining NATO
member of EFTA, but for economic
and possibly -political reasons
Lisbon's ties to the EEC-would
probably have to be looser--on
the model; perhaps, of the-
Greek-EEC convention.
Far more difficult are the
problems of EFTA's neutrals--
Switzerland, Sweden, and Austria
--and of Finland, which is asso-
ciated with it. The Swedes,
like the Swiss, think of neu-
trality as "a way of life," and
would be loath to abandon it
for membership in an organiza-
tion with the objectives of eco-
nomic and political union.
Looser associative ties, which
seem a more feasible alterna-
tive, have the major disadvan-
tage of linking the economic
future of those who seek them
-to an organization in which
their influence over policy
would at best be peripheral.
Such status has been compared,
for example, to a "cheap seat
at the theater from which one
can scarcely see the stage."
For Austria, as for Finland,
the problem is complicated by
fear of Soviet retaliation.
While the neutrality provisions
of its constitution state only
that Austria may not join alli-
ances or have foreign military
bases on its soil, Vienna has
interpreted this as precluding
membership in any organization
composed predominantly of NATO
members. Moreover, Vienna has
been deeply committed by Foreign
Minister Kreisky to the inter-
pretation that the provision of
the State Treaty prohibiting
union of Austria with Germany
precludes Austrian accession to
an organization of which West
Germany is a leading member.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Perhaps the answer to
Vienna's problem lies in taking
whatever action Bern and Stock-
holm decide on. Switzerland in
particular has a good bargaining
position with the EEC, and it
might be possible for Austria
to follow the Swiss example as
a model of neutrality.
While a major reappraisal
of European policies would re-
sult from Britain's signature
of the EEC treaty, further
repercussions would also follow,
extra-European in scope. Lon-
don's prolonged hesitation on
the brink of a "European plunge"
has reflected in large part the
uncertain implications for the
Commonwealth.
The small tariff prefer-
ences granted by one Common-
wealth country to another are
of declining economic importance
to most members, but their elim-
ination would remove one of the
few tangible benefits of that
loose association. This in turn
would accelerate present tend-
encies of Commonwealth members
to seek the most favorable eco-
nomic, military, and political
arrangements, with little re-
gard for the historic ties with
Britain. For this reason, the
Macmillan government will seek
to retain a remnant of the pref-
erences through protocols to
the EEC treaty.
Britain's turn toward
Europe, however, comes easier
now than it would have a few
years ago. The proliferation
of new Commonwealth members,
their evident disregard for
British views on important in-
ternational questions, the con-
tinued tendency of Canada,
Australia, and New Zealand to
look toward the United States
for military protection, and
the withdrawal of South Africa
this spring have all decreased
the Commonwealth's importance
to each member and have removed
some of its emotional appeal to
the British public. Parliamen-
tary discussion of possible
Common Market entry has often
focused less on Commonwealth
ties than on obligations to
other Europeans--Britain's EFTA
associates.
The Macmillan government
nevertheless has no intention
of "abandoning" the Commonwealth.
If Britain were to lose a frag-
ment of its identity to Europe,
it might stress remaining Com-
monwealth ties even more to
distinguish itself from its new
partners.
Fortunately for Britain,
the economic blow would fall
hardest on the old Commonwealth
members--Canada, Australia, and
New Zealand--whose British ties
are sturdiest. The New Zealand
Federation of Labor's recent
warning that British association
with the EEC might mean an "end
to the Commonwealth" might have
been taken more seriously if it
had come from a new Asian or
African member. New Common-
wealth members have indicated
more interest in aid than trade,
and as long as other Common-
wealth members continue to re-
ceive increasing amounts of eco-
nomic assistance from London,
they are unlikely to discard
their membership lightly.
With Commonwealth preferences
eliminated, ]London would be
obliged increasingly to empha-
size to its Commonwealth part-
ners the less tangible benefits
of being in that club through
the variety of consultative
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CURRENT INTELLIGENCE WEEKLY SUMMARY
institutions and practices capped
by the prime ministers' meetings.
However, such consultations
might in turn convince the more
ardent European integrationists
that London is still trying to
maintain a special world-widein-
fluence and is unwilling to par-
ticipate wholeheartedly in the
drive toward European unity.
The Atlantic Community
London's claim to a special
relationship with the United
States would shrink to the ex-
tent that it submerged its eco-
nomic and political future in
the EEC. In practice, however,
no British political leader in
either major party is prepared
to relinquish this claim. Some
British advocates of the EEC
link argue that London might
even improve its position with
Washington by being able to
speak, at least in part, for
the EEC partners. British ef-
forts to retain the historic
special position would be cer-
tain.to complicate the intricate
personal relationships with
Continental leaders, present
and future, and would consti-
tute a major factor impeding
the development of a broader
European unity.
For NATO, perhaps the most
immediate consequences of Brit-
ish membership in the EEC would
be an end to the Six-Seven con-
troversy and the establishment
of a new forum where intra-
European differences could be
worked out. Some of the stanch-
est NATO supporters anticipate
that with Britain in the EEC,
more effective pressure might be
brought to bear to secure De
Gaulle's cooperation in NATO.
Others foresee a healthier trans-
Atlantic partnership if the
present EEC countries and Brit-
ain, by pooling their resources,
are more nearly able to balance
American power than at present.
There is implicit in such
thinking at least an element of
latent "European nationalism"--
as there has been in the inte-
gration movement from the begin-
ning. Thus, some of those who
have most ardently urged the
restoration of European power
through collective action have
felt that. Europe could not then
be "ignored by Washington" and
that it could even go its own
way. Such nationalist-neutral-
ist-isolationist advocates ap-
pear a distinct minority, how-
ever, in comparison with those
who see Europe and North America
drawn into an even closer rela-
tionship.
Some of the latter group
are already elaborating a con-
cept of an Atlantic Community,
of which NATO and the new Organ-
ization for Economic Cooperation
and Development are the first
manifestations. Jean Monnet,
who perhaps more than anyone
else has influenced the course
of the European movement, is
publicly predicting the eventual
emergence of supranational Atlan-
tic institutions.
Conclusions
While the prospect of a
more efficient utilization of
free-world resources is implicit
in the prospect of a "better
ordering" of Western Europe,
there are few illusions that
this potential will be either
quickly or easily realized.
Well over a decade has elapsed
since the first moves toward
European unity, and each step
has encountered major difficul-
ties. London's negotiations with
the EEC will be difficult. They
are not certain to succeed, nor
is it assured that-the British
electorate would approve such
a basic reorientation of Brit-
ain's future. In any case, the
achievement of a viable Euro-
pean unity will inevitably be
a process in which the revising
and signing of treaties are only
the formalities.
The process will be diffi-
cult primarily because the
stakes are so large. As it
exists today, the Common Market
--a community of some 170,000,-
000 people--has achieved rates
of economic growth currently
envied in the Anglo-Saxon coun-
tries, and it is increasingly a
dynamic economic and political
force throughout the world. There
is no reason why this momentum
should not at least continue in
a community half again as large,
nor is there any reason why a
unified Europe could not rank
with the USSR, Communist China,
and the United States among the
formidable powers of the future.
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