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-RDP79-01090A000400010011-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 11
• Publication Date: August 23, 1949
• Content Type: PAPER

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WESTERN EUROPE BRANCH
OFFICE OF REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
WORKING PAPER
BRANCH WEEKLY
NOTICE: This document is a working paper,
NOT 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 dissemination.
DATE: 23 August 1949
RUTH: /NCR
hAPJ IV
NEXT REVIEW DATE; " S C
CrAsS. CHANGED Tc T"
N~Q,GHAh1GE IN Cl_ 5P S
DOCUMENT NO.
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WESTERN EUROPE BRANCH
WEEKLY SUMMARY
VOL. V NO 6 For week ending
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S E C R E T
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AUSTRIA
Intertor Minister elver has run headllong into the delicate matter
of Soviet participation in transactions- Involving the illegal export of
Austrian goods. The Austrians, who have it natural reluctance to
clash with the Soviet occupation authorities are now faced with the
problem of how far to go in the case, and what lines to follow. The
investigation, originally undertaken in an effort to eradicate Austrian
Communist influence in the economic division of the police, was also
the result of Socialist eagerness to expose the long-suspected
corruption of People's Party officials in the Trade Ministry and
elsewhere. To date, the investigation seems to have succeeded in
implicating more members of the economic police than the higher
officials. For a while, It appeared that Soviet participation in the
scandal would be carefully "toned down" to avoid possible Soviet
retaliation, but a presumed leak to *the press brought the matter to
light.
The Austrian scrap Investigation sparked by -Socialist
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The Austrians, apparently believing that it is safer
to cry about what the USSR is doing to other countries rather than
what it is doing to Austria, are now emphasizing the fact that
Soviet scrap dealings have been at the expense of the Satellites,
which have given Soviet authorities handsome profits on goods from
Austria. Further, the Socialists, in their efforts to reduce the drain
on the Austrian economy and at the same time improve their long-
term political prospects, have been mainly responsible for the
recent reports of accelerated Soviet removals from USIA (Soviet-
seized) plants--a practice the Austrians can deplore publicly and
legitimately, neatly side-stepping the scrap scandal. Thus the
Socialists are establishing their claim to be better guardians of
Austria's economy than is the People's Party, which has been far
less eager to point up the economic burdens inherent in the treaty,
or to report current Soviet economic activity.
FRANCE
The French Government will probablyrant some form
of wage concession by ear y ?RO_ er n order to counteract the grow-
ing capabilities of the General Confederation of Labor (CGT) for
launching a powerful strike offensive. No general, wage concessions
have been made so far in 1949, and this policy, together with the over-
all decline of retail prices, has arrested the postwar wage-price
spiral. Any material wage relief would weaken considerably the
CGT's present campaign for "unity of action", which could otherwise
be pressed persuasively on purely economic grounds. Increased wages,
however, might well. encourage the recent tendency of farmers and
wholesalers toward hoarding of foodstuffs and speculation.
Non-Communist labor leaders are warning the Govern-
ment of the critical effects which they now expect to ensue from the
CGT's campaign. They have emphasized the workers' increasing
antagonism toward the Government because of its firm wage control
policy. This hostility has been aggravated by the Labor Minister's
recent arbitrary grant of a vacation bonus to employees of the social
security system. Consequently, the non-Communist leaders are urg-
ing the Government to make some wage concession; the leadership of
the miners' union affiliated with the "Force Ouvriere", for example,
proposes payment to miners of a bonus slightly in excess of the
minimum bonus paid to the social security workers,. half at the close
of the August vacation and half at Christmas. Although the CGT's
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demands extend to the raising of basic wage rates in several ways,
prompt approval by the Government of a modest bonus would
probably check the expected trend of non-Communist labor toward
support of the CGT's strike plans.
The Government is already prepared to ask Parlia-
ment in October to unfreeze wages promptly in private industry
(most prices were freed in 1948) and restore collective bargaining,
as one means of pleasing non-Communist labor leaders and the
rank and file in general. Such a measure, however, which would
tend to result in a general rise in basic wage rates., will probably
be rendered as little harmful as possible by being delayed until the
CGT's threat has been dissipated, inasmuch as the measure would:
(a) increase the workers' support of the unions; (b) reinforce the
will to strike among workers luke-warm about striking against the
State's economic policies; (c) heighten management-labor tension
in industries where manufacturers held the bargaining advantage;
and (d) make it difficult to maintain wage controls in the nationalized
industries, where wages are often based on prevailing rates in
private industry.
FRENCH AND SPANISH NORTH AND WEST AFRICA
Women are responsible for a new energy apparent in
Communist actties in renc R-o-rffi A r(NA , especially in
Algeria., Communist-front organizations have been organized in
Algeria in which women either predominate or are the more active
element of a mixed membership. A large part of the success of
these groups lies in their ability to enlist the support of numbers of
Moslem women., desirous of freeing themselves from their
traditional inferior status, These groups are equalled in potential
Importance for the spread of Communism in FNA only by the
Tunisian General Union of Labor (UGTT), which recently affiliated
with the World Federation of Trade Unions. The newer organiza-
tions--the Union of Women of Algeria., the Algerian Association of
the Friends of the USSR, and the Algerian Combatants for Peace
and Liberty--probably owe much of their progress to the vigorous
guidance of the Women's International Democratic Federation (WIDF),
headed by two dynamic Frenchwomen., Eugenie Cotton and Marie
Claude Vaillant-Couturier. The influence of these "front" groups
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among women already bids fair to exceed that of the small
Algerian Communist Party among men. The women, by recently
emphasizing social reform for both sexes, are becoming very
effective in promoting Communism as a practical way of life.
The new organizations, naturally, have adopted the usual
Communist propaganda lines--in favor of national liberation, and
opposed to colonialism, the war in Vietnam, and the Atlantic Pact.
BELGIUM
Catholic-Liberal differences on social and economic
policy and the royal question on are not 1 ely to cause the fall of the
Belgian Government before Parliament is reconvened in the fall.
Discussions on the royal question among the leaders of the three
major parties may be continued during the next few months, but it
is unlikely that any definitive action will be taken before autumn.
Although Premier Eyskens has stated that his Government will
make every effort to resolve the controversy over King Leopold
and,, if it fails, will resign, any attempt to solve the issue without
Socialist approval is improbable, If the Catholics and Liberals
do agree to try to force a solution, it is doubtful that the Socialist
opposition will take the form of a general strike that would
threaten economic stability. In an attempt to avoid inter-Cabinet
dissension during the Parliamentary recess, the Government
probably will proceed slowly on pressing economic and financial
issues, although strong Socialist criticism can be expected if there
is any delay in measures to relieve unemployment. The proposal
to reduce taxes, while increased unemployment necessitates large
additional expenditures, may become a political issue within the
Government, further weakening Catholic-Liberal cooperations
B
THE NETHERLANDS
The advocates within the Netherlands Government
of a conciliatory In onesian po icy w be in a fairly s rrong position
as the Round Table Conference on Indonesian independence begins.
Support of the Government's policy in the States-General (Parliament)
by the parties represented in the Cabinet was surprisingly strong,,
even the Catholic Party's conservative parliamentary leader express-
ing reserved approval. Labor Party support was whole-hearted, and
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Foreign Minister Stikker's Party for Freedom and Democracy,
often critical of Government concessions to the Indonesians,
gave cautious support, The conservative Christian Historicals
continued their critical attitude, but there was no evidence of
active opposition to the Government's policy. Even the
Dutch dis-
closure by the Minister of Overseas Territories
reports regarding Republican violations of the cease-fire the con-
vening did not seem to increase parliamentary opposition
vening of the Round Table Conference.
The participation in the Dutch delegation of
parliamentary leaders representing all political parties (except
the Communists) probably will assure approval from Parliament
of any agreement the Government may be able to reach with the
Indonesians. However, if the Netherlands Government is not
satisfied that the cease-fir order is being observed by the
Republicans, its attitude at the Conference will become less
conciliatory, and conservative opposition to continuation of the
Conference, especially from the Catholic Party, will threaten
its successful conclusions
ITALY
B Italy's request that $32 million of its ECA allocation
be used in connection wi ee gratdon raises a acute problem o
overpopulation, which cannot be solved within the life-time of the
ERPQ Emigration is an obvious method of draining off excess
population., but serious impediments hobble any large-scale
Italian program along this line. Not the least of these are the
immigration restrictions which obtain in many countries. In those
areas available as emigration outlets? Italy's ability to transport and
establish its emigrants is greatly limited by lack of capital. Experts
estimate that Italy's former
absorb only disposition
numbe~ssof not yet
been settled by the UNGAy could
Italian emigrants, even with the large capital investment which would
be required for any important economic development
problem
Efforts within Italy to solve the population
through direct improvement of agricultural production methods in
depressed areas would, if undertaken, be hindered by lack would to ;
and expansion of industry to provide new job opportunities
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impeded by lack of natural resources, skilled labor and capital.
Population experts have recommended birth control as an approach
to the problem, but popular opposition on moral grounds prevents
any positive national program This opposition appears to be
considerably reduced in Northern Italy, where as is typical in an
urban industrial area, the birthrate has dropped so low that the
population is not even replacing itself. ,
Each of these proposals is obviously inadequate to
solve the overpopulation problem, and experts consider that all of
them together would fall short of solving it Only progressive
urbanization of the South will stabilize Italy's population level.
Completion of this development, however, would require at least
15 to 20 years.
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