WESTERN EUROPE BRANCH OFFICE OF REPORTS AND ESTIMATES WORKING PAPER BRANCH WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400010008-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 8
• Publication Date: August 2, 1949
• Content Type: PAPER

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WESTERN ETMOPE BRANCH
OPIICE Or, REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
WORKING PAPER
BRANCH I- MY
NOTICE: This document is a working paper,
an official CIA issuance. It has been
co-ordinated within ORE, but not with the
IAC Agencies. It represents current
thinking by specialists in CIA, and is
designed for use by others engaged in
similar or overlapping studies. The
opinions expressed herein may be revised
before final and official publication. It
is intended solely for the information of
the addressee and not for further dissemi-
nation.
DATE: 2 August 1949
DOCUMEN T No.
NC CHANCE i."J
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AUTH: F
DATE/ ' `
' REVIEWER; 372044
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For week anding
2 August 1949
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appeared improbable that in the forthcoming elections
the Austrian Communists would poll even the 5.4% of
the total vote which they obtained in 1945s With the
Austrian Communist Party probably already down to what
.can be considered a hard core* the Church's warnings
Against Communism will have little effect in cutting
Communist strength,
To date, there are no other indications that
the Church intends to participate in Austrian politics
to any greater extent than it has in the past four years---
i?e? moderately encourage support for the Catholic and
conservative People's Party Such limited encouragement
is not likely to arouse the violent antagonism of the
other coalition party - the Socialists.
Austria* Before the Vatican announcement, it had
AUSTRIA
v~+. va.+v.+..a.v vaaut-Vti' .} J. V U L 4 tlS.i.LG is tt -'t~Z.~1STi
Lcnmunism w ..w have no ,e a e apprec a e effect in
FRANCE
A financial crisis because of an unexpected lack
of operating fun s tor the French Treast'sy, appears likely
to be averted by a special additional release of counter-
part funds. The government needs some 25 or 30 billion
francs to meet obligations until October. The present
shortage results from the fact that revenues have been lower
than anticipated because of lower sales of tobacco and
gasoline, the failure of small savings to increase rapidly,
lagging receipts from direct taxes, as well as the great
deficit of the nationalized railroads. If the special
counterpart release is not made, a financial crisis could
occur, leading to the resignation of Finance Minister
Petsche and the fall of the Queuille Government. ECA Paris
has recommended that the US advance the required sum, with
the understanding that the French Government will repay
this November,, when Parliament has reconvened. As RCA
cannot release counterpart funds for normal governmental
eXpenditures, the advance would be utilized for investment
and reconstruction while the French could employ tax receipts..
now reserved for reconstruction, to cover the gap in Treasury
funds,
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.?r ._ -.~_ .__...__r~ ...-.. a ... vfav< w.e.r... a-csrv vV
omise to furnish the public an explanation of. the reason
for such a special release. In addition, if the antici-
pated receipts do not come in, Petsche would have to ad-
here to French law, and ask Parliament, when it returns,
to take corrective action. Moreover, according to the
ECA proposal, the French Government would be expected to
issue a written statement of Its economic and financial
program for the coming months. This statement would stress
the desirability of having other OEEC countries cooperate
with France in attempts to liberalize European trade, ease
restrictions on intra-European payments, seek adjustment of
exchange rates, and would indicate that France will continue
to carry out its internal program to reduce prices and
costs, and take further decisive action to improve the state
of its public finances.
PT NCH AND SPANISH FORTH AND ~1J1:ST" AFRICA
C Tea ointment of General Ca entier, CG of French
troops in Morocco an ig y-regar e by General Juin, to
replace General Blaizot as CIC, Indochina, may be indication
of General Juin's own eventual replacement. General Juin has
the dual assignment of Resident General for France in Morocco
and CIC of all French Armed Forces in North Africa. Pressure
is recurrently brought to bear in Paris to have a new
Resident General appointed in Morocco, preferably a civilian,
more progressive than Juin. Juin's mission, the restoration
of stability In Morocco following the deterioration that
accompanied the regime of his predecessor, has now been
accomplished. Top level government circles feel that Juin
should relinquish France's most coveted colonial post, pro-
vided another post can be found or created commensurate with
the General's outstanding ability and elevated rank,
ITALY
A recentl --com leted surve of family incomes in
Italy emphasizes the urgent need for tax re cram. Three-
qers of the national tax receipts now come from "indirect"
sources, Such taxation places the burden upon the poorer
classes and contributes to economic maladjustment and social
unrest.
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 The survey, designed to give' a. reasonably
etudies,;,of 10,000 families selected by scientific
epltn'g. methods . The income'"distribution curve is shown
Whcurato distribution curve of family incomes? includes
portith.' of revenues and fall cost heavily upon the upper
fifth tnoome group, are not only comparatively lower in
Italy,,but are flagrantly evaded, The reluctance of the
Italia government to effect reforms,, the wide-spread
erasion, and the over-all low income level indicated by
the survey will handicap the effectiveness of any revision
of the thx system.
t~y the survey to be similar to the US family income dis-
tribution cu:.-me. One-fifth of the families in both
countrie8 receive one-half of the national income. How-
e -er the income tax and other direct taxes based upon
a t ty to pay, which in the tis constitute a large pro-
A.stateraent in the Vatican dail news a er inter-
treat "sympathizers" more or less severely, as circumstances
: "ecommend. fy not demanding that Catholics summarily abandon
n
8
athetem,~ "show favor to the .Communist Party," The editorial
in Css tore Ra indicates that among such persons are
those w, o ve eonfooled" into sup~~orting the socio-
eoonomic aspects of Comrnmism. The editorial does not provide
a further explanation of the manner and extent of support of
the Communist socio-economic program that will bring a denial
off' the sacraments, so that the Church retains the freedom to
preting the recen an -Commun a ecree. ma es s scope
o .carer and permits the Church considerable flexibil .ty is
its irplementation. The etatemont, rendered semi-official
by publication in the Osservatore Romano, explains that
excomm,untoation, is .app e e o bo erine cases such as:
( ) Catholic members of "really Communist" trade unions and
(2) those Socialists who make an absolutely common cause"
with the Com mun.ists. Sn conflict with reports that the
Church bad recently arrived at a modus vivendi with. the
Tito Crovernment is the specific stateme ha_t Communist
followers of Tito are included in the excormunication decree.
The papa. decree does not excommunicate but denies
it
11 t sacronts to those Catholics who without b i
ent .re sopio-epopomio program of the Communists before
a,ienatin ; many who wish to remain in the Church,
hey have found a'oubstitute doctrine, the Vatican may avoid
TI G VATICAN
w 6 -
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