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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400030003-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 3
• Publication Date: January 24, 1950
• Content Type: PAPER

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WESTERN EUROPE DIVISION
OFFICE 017, REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
WORKING PAPER.
DIVISION WEEKLY
NO'I CE: This document is a working paper, NOT
an. o lal CIA issuance. it has been co-ordnated
within ORE, but not with the IBC Agencies. It repre-
sents currents 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 aid official publication.
It is intended solely for the information of the addressee
and not for further dissemination,
DOCUMENT NO.
DATE: 24 Sanuary 1950
NEXTRi'vl
CvIDATE:
CLASS. CHANGE:D TO:
NO RANGE IN CtA~ Sg, L
DA I
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WESTERN EUROPE
WEEKLY SUMMARY
VOL. VI - No. 3 For week ending
25X6A 24 January 1950
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AUSTRIA
The current Austrop-Soviet financial iegotIations in Vienna
are a transparent p e e o . thg the .+! i iii -f `.?s ~' T1 ?gea io+l y
they appear, furthermore, to afford ample opportunity for protracted
bilateral discussion. The amounts involved in the Soviet claims for
.supplies and services rendered the Austrians since 1946 are compara-
tively small, and the Austrians have made a reasonable offer as a.
basis of settlement? The USSR may well object to the Austrian offea?
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however, because it is calculated to realize some of Austria's
counterclai.r ns.
The most important feature of the Austrian offer is
the reciprocal abrogation of Austria. claims against the Soviet
element, in exchange for Soviet surrender of certain of its
claims. The Austrians would waive their claims for reimburse-
ment of civilian occupation costs in excess of the amount it was
agreed Austria should pay to the Soviet element. 9 December
1949, these claim for reimbursement amounted to 272 million
schill.ings. In addition, the Austrians have offered to postpone
the date specified for renunciation of these claims, which would
mean a further loss to Austria. The suggested offer does not
involve the cost of relief foods supplied by the USSR in 1945 or
the costs of returning POWs; these would be paid separately by
Austria.
The chief Soviet claim which the PAuu.strians include in
the compensation agreement is III milli.or schilli.ngs for alleged
wok done by the Soviet army toward the rehabilitation of the
Austrian railroads. Compared with the amount which the Austrians
are ready to forego, this is entirely in the Soviet Cavor, Besides,
the Soviet claim appears to be inflated in view of the fact that POWs
and forced labor did the word, and the Soviet estimate was calcu-
lated on the higher 1947 wage levels instead of on those of 1945-46,
when the work was actually done. Soviet claims for renter of
locomotives and rolling stock, claimed as war booty by the USSR
but presently operating ian Austria, have not been advanced, but the
Austrian proposal seems to be calculated to include any such claims,
should the question arise.
FRANCE
Socialist threats and the postponement of action on the
collective 1iF iWi'ng ll ill p obi f orce the F enc11 goverRimellt
au ri e payment of a 3,,U00 -franc "patience" bonus to workers.
In. an effort to speed implementation of the collective bargaining bill,
the Government has introduced a separate measure providing for
immediate employe ...ewployee wage negotiating prior to restoration
of complete collective bargaining. Socialist Secretary General Mollet
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says, however, that this measure will not reduce Socialist
pressure for the bonus, and has warned Premier Bidault that
unless a bonus is granted, the party will withdraw its ministers
from the Government. Although the Premier would not then be
obliged to resign, and could replace the Socialist ministers,
it appears ruor"e likely that the Government will compromise to
avoid weakening the coalition. Despite the Socialist demand for
a bonus for all workers earning less than 18,000 francs a month,
the Government . ll probably restrict the bonus to those earning
less than 15,000 francs. as was done in November.
FRENCH AND SPAN SE NORTH AND WEST AFRICA
Nationalists and, to a lesser extent, Comrnai.sts throughout
North Africa will receive enc:~au ; ea ent. om peiniion ~s ~e
an nit- onaiist labor union (UGTT) to the UN- Economic and Social
Council (EcoSoc) for an investigations of North African economic an-I'l
social conditions, and trade union freedom. This re test, coning
from a Tunisian nationalist source, will carry more weight than a
recent Egyptian su.ggcstion in the iN for an investigation of condifions
in Tunisia and. Morocco. These efforts were blocked by the exasperated
French, who proposed a counter- investigation of the Anglo-Eg ptia;'A
Sudan.
The Tunisian der ar?che coincides with proposals of the USSR
and the World Federation of Tade Unions (WFTU) to EcoSoc, urging
similar action for dependent and colonial areas in Aisa and Africa.
The initiative shown by the UGTT in sponsoring a measure in line with
one of the chief Soviet propaganda themes is symptoa. aatic of the
Comnntnist i luence exerted upon the UCTTT by its affiliation with the
WFTU. This initiative, .moreover, is at variance with a reported
UGTT desire to transfer ,dfih-aation to the newly-organized anti-
Communist International Confederation of Free Trade 'Unions (ICFTU),
providing that this switch could be effected wif:h a at losing face.
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ITALY
The conduct of the Italian police, as shown in recent
public di yo e~ s a; ki Fe- b ?i discredit and em-
ba.rrassinent: to the Government. The violence of the police at
the time of the Rome riots was reported to have preceded rather
than followed violence on the part of the demonstrators. In is-
criminate and ill-timed use of force has been noted before, and
can be explained by two facts: (1) most of the police of the
Italian republic were trained in the Fascist army and police; and
(2) the police were necessarily concerned, until after the Italian
natio ,iai elections of 1948, with developing their sb?engt,wb to meet
the threat of Communist revolutionary action.
Since that time, however, the strength of the police
vis-a-vis the Communists has greatly incre a, sed tha, threat of
revolution has greatly diminished, and there has consequently
been an oppor:ttmity to develop a police force capdoi -4 of promoting
law and order in addition to suppressing disorder. Both Interior
Minister Scelba and his police chief, d'Antoni, appear to have over-
looked this opportunity. D'An.toni, formerly police chief in the
largest center of Cominvmst strength when force was the essential
weapon against Communist activities, continues to concentrate on
the use of combative rather than preventive measures, to the
neglect of administrative organization and political intelligence.
Minister Scelba tries to direct all phases of police act:ivit~-
personally, instead of dealing through responsible subordinates,
and seems to believe that only by physical force can the police
inspire the respect of extremist elements.
The net result is that rn ny Italians are finding Scelba.'s
police organization reminiscent of the old Fascist secret police, as
it becomes more and more closely identified with one autocratic
director, and is primarily devoted to the negative function of re-
pressing demonstrations rather than to the promotion of law and
order. Traditionally, and often with good reason, the Italians have
been distrustful of their national government for its failure to
represent and defend the interests of the population. Continued
arbitrary or irresponsible conduct: by the police sight v An them the
awe of extremist groups, but it would eventually lose them and the
Government the respect and sympathy of most Italians.
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SPAIN
The recent US policy statements on the return of
Ambassadors to Madrid will be heralded In Spain as a .moral
victory for Fra ieo, and will be interpreted by the Spanish press
and radio as evidence of a US intention to place its relations with
the Franco regime on a fully normal diplomatic and political
basis. The er?iUexsrns of the regime in Secretary Acheson's letter
and Representative Kee's statement will be ignored in press re-
ports, except for indirect allusions in editorial attacks on such
er iticis . the US policy statements thus will be used to susta
Franco's prestige, especially in Army circles where, dissatis-
faction has reportedly been man ested over prospective cuts in
the number of officers on active duty.
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SPECIAL ARTICLE
Disappointing French Agricultural Production
Over-all expansion of French agn,icuitural production...
essential for the attainment of ECA goals in western Europe- - is
not being realized., and total output in 1950 is not likely to be
appreciably larger than in 1949. In efforts to avert this outcome,
ECA. is consulting closely with French officials, while the new
French Minister of Agriculture, Gabriel Valay, has begu
emphasiT-ing publicly the urgency of the problem, and the OE EC
is preparing to reconsider it in February. On the basis of
current estimates, French agricultural production in 1949 was
not perceptibly above that of 1948, when production reached only
97% of the 1934-38 average.
Under initial long-teem ECA plans, the French were
expected in 1952-53 to exceed .prewar, average production by
25% and export 1; million metric tons of wheat,, becoming
virtually self-sufficient in regard to food, and the largest
exporters of foodstuffs in western Europe. It was considered
indispensable for France to achieve these long-term objectives,
both to balance its own for"ett payi ??nts by 1952-53, amid to
help western Europe as .a whole slash dollar imports and thus
overcome the general dollar shortage expected to follow the
termination of the E.P. In 1950, however, `ragrce will have
difficulty meeting a commitment to export even 90,000 metric
tons of wheat, without jeopa: dizin; domestic supplies.
The anticipated failure of France to expand over-all
farm output in, 1950 will arise from two general factors: (1)
the lack of requisite Government actior:n; and (2) the far aers
unwillingness to increase production tinder existing incentives,
At present, the Government's measures to stimulate production
are largely in the planning stage. The Government has allocated
only one-eighth (about $140 million) of its total investment
budget to agricultural purposes, and has failed to apply any of
this fund toward the lowering of production costs or the raising
of output.
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The Government's influence over industrial prices,
moreover, is likely to decline during the course of the year,
with the result that the disparity between farm and industrial
prices will not be reduced. It is this disparity which renders
farmers disinclined to expand output. As a result, there
arise several specific handicaps to production: (1) the total
tillable land will remain more than 10% below the 1934-38
average; (2) the use of fertilizers will fall far short of the
planned 50% increase over use in 1948; and (3) farmers will
be discouraged from hiring additional laborers. There will
be a considerable, but insufficient, increase in the use of
tractors, high-yielding seed, and other modern techniques.
France's expected failure in 1950 to move
appreciably further toward the long-term agricultural
production goal will be a serious blow to ECA's prospects
for accomplishing its program in western Europe,
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