WESTERN EUROPE DIVISION OFFICE OF REPORTS AND ESTIMATES DIVISION WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400040007-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: November 9, 2016
• Document Release Date: September 24, 1998
• Sequence Number: 7
• Publication Date: May 17, 1950
• Content Type: PAPER

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WESTERN . MOPE DIVISION
OFFICE OF REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
VOL a VI - No. 19
For week ending 16 May 1950
17 May 1950
NOTICE: WORKING PAPER
This document is a working paper,, not an offi-
cial Issuance, since it has not necessarily
been coordinated with and reviewed by other
components of ORE ? It represents the f ormul
t ive thinking of one group of analysts In ORE
and is designed to provide the medium for trans-
mitting their informal views to other Intelli-
gence analysts of the US Go,'errinnent who are
working on similar or overlapping problems. It
is intended for the use of the addressee alone .,
and not for further d1ssezninationo
DOCUMENT NO. 0 -HANGE IN CLASS. ^
DECLASSI ED
CLASS, CHANGED TO: 'TS S C
NEXT F 'VIEJ'r' FATE:
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DAI F;-VEE nJER: 372044
COPY FOR:
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? WEST EUROPE DiVISIOI
WEEKLY SU74MARY
VOL. VI - Woo 19 For week ending
16 May 1950
25X6A
B Austria e s trade with Soviet-controlled areas will
probably be n"" ereas~ ng :y '` .uenae T 0w_Sov i'ont
Import-export firms in Austria, primarily Intrac. This East-
Ilest trading firm has achieved notable success in obtaining
a. near monopolistie position :In Austrian trade with the
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S E C R E T
Satellite area, and more recently, has extended its sphere
to include East German trade as well. The lack of an offi-
cial trade agreement between the Austrian Government and
the German Democratic Republic has facilitated a centrali-
zation of goods exchange through Intrac in Austria and the
East German trading agency, DAHA. The success of Intrac,
like that of less influenclal Soviet-front a.mport-export
firms in Austria, is due not only to its position as a
"chosen instrument" selected by the USSR for East-West
trade, but also to the fact that Austrian agencies and
'Im8. Including subsidiaries of Austria's most powerful
banks, are willing to deal with Int:rac in order to obtain
easy profits a
SWPITZERL&ND
B Switzerland is urali.kelLopto seek closer,.pol . tical_
or mi litar gq chi b western `c ? spite its d 6ntai
sympathy for9 and orientation toward, the West. There is
a growing feeling in Switzerland that war Is probable,
although not imminent, and the Swiss appear to be increasingly
wedded to their concept of armed neutrality as providing the
beat chance to avoid an attack in case of warm Although
there has been some Swiss criticism of this policy as un-
realistic, in general the theory of neutrality is deeply
embedded in the Swiss who are, furthermore, disappointed by
the half-hearted attempts at integration of other European
countries. Switzerland also sees the military weakness of
western Europe in comparison with the Soviet bloc
The Swiss are, therefore, seriously preparing their
country for the contingency of war, and at the same time re-
affirming their neutral position. Over the past six months,
security measures have been tightened and observers have
found a growing difficulty in obtaining even limited economic
data. Public political statements have been generally re-
strain, with definite pro-"stern sentiments omitted, in
contrast to the statements of a year ago. In addition to the
stockpiling of essential foodstuffs and raw materials by some
importers and dealers, which has been obligatory for the past
two years, the Government has recently announced a campaign
for voluntary household foodstuffs reserves. The Swiss have
also unofficially sounded out US representatives in Switzerland
on the possibility of Swiss-US financial transactions in the
event of war v
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SECRET
FLANGE
The all t trend toward neutrality in French
intellectual an o caa rc1es which has reflected ,
se In the ren?h press ar TH-the statements of a few
political leaders, is not likely to reach a stage in the
near future, Where it would seriously endanger US
objectives in western Europe.
Tho.neutrality undercurrent is basically
psychological and stems partly from postwar apathy9 the
fear of another war, and some resentment towards US
influence in France. A series of articles expounding the
relative merits of neutrality have appeared in the
conservative Paris daily, Le Vionde, a paper which has been
increasingly anti-US in its comment. It is probable that
some of these articles reflect the strong anti-war sentiment
of Catholic elements in France.
In addition to the attitude of the press, spokes-
men for both the Socialists and Gaullists have indicated
similar views, questioning the advisability of further
commitments in the cold war, and emphasizing the possible
threat to French political and economic independence m The
Socialists have strongly opposed the recent French proposal
for the creation of a new intevnati.onai body to coordinate
the policies of western Europe.
This mixture of neutrality sentiment and resentment
of US influence in French Internal affairs will be exploited
bT the Communists, who thus acquire additional and valuable
propaganda for their peace campaign. The Party may broaden
its campaign and appeal to all those in favor of neutrality,
including the Catholic elements which have pacific tendencies.
At the present time, however, there is no indication that
this trend towards neutrality will cause a change in the
foreign policy of the Bidault Government.
B In an effort to offset France t s failure to earn
sufficient o . are z .roi=g eZOor ss ran vernmen is
ns ng a road program for the expansion of the tourist
industry, with special emphasis on attractions for US
tourists. In this way, the French hope by 1952-53 to gross
as many dollars through tourism as through a ortsa Probably
Government funds to the value of more than million will
be devoted in 1950 to the expansion effort, which is apt to
have considerable success. Not only is the Government in-
volved In the project, but private business is also taking an
active part. The principal point of focus for public Invest--
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S E C R E T
ment will be the building, rebuilding, and renovating of
hotels and "vlogis" (small tourist accommodations which
must come up to Government specifications).
As a result of the ambitious program, the French
look forward to a 200% Increase In annual gross income
from tourism--from the franc equivalents of an estimated
0137 million in 1949 to ,400 million in 1952-53, The plan,
which calls for half of this increase to be in dollars, may
be over-optimistic, as It would necessitate a rise in gross
dollar receipts of over 300%.
B Persistent o osition by conservative Italian
rau s spearhea edh r sties Democrat rr!g~wgngers,
to tocovernment v s proposal for nation-wide agrarian reform
will delay Parliamentary action on this important problem,
and even when legislation is passed, may obstruct implementa-
tion of the reform program.
Right-wing Christian Democrats under' De Martino,
strongly supported by south Italian landowners, are renewing
their efforts to sidetrack the far-reaching Segni bill for
general land reform by pushing a plan which emphasizes re.
clamation of uncultivated land rather than redistribution
of cultivated land. Despite the sharpness of the current
struggle over the Issue within the Christian Democratic Party,
it is likely that Parliamentary approval will be obtained for
the Segni bill, which Is supported by the center and left of
the Party, including the militant Dossetti reformists, and by
the moderate leftist parties. Once this measure is enacted
into law, however, conservative groups, who regard it as a
threat to their vested property rights, and who exert an
Influence disproportionate to their ni mbers, may be expected
to hinder large-scale land redistribution by financial pressure,
obstruction of court procedure, bribery and even intimidation
of the commissions charged with carrying' out the provisions of
the law.
Agrarian unrest may be expected to continue, during
protracted Parliamentary discussion of the Segni bills More-
over, any substantial modification of the bill's present
provisions might cause the Republicans and moderate Socialists
to leave the coalition Government, which would thus suffer
the loss of an important segment of Its broad political base.
Should obstructive tactics of the bill's opponents succeed in
blocking its full implementation after it has become law, the
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Communists would be quick to exploit the resultant sharp
increase in discontent among the landless peasants, and
would be in a better position to discredit the Government.
THE VATICAN
The otentiali ties, of "Catholic" Communist groups
as a Sovie Weapon -11 a su, ee o ucrea.s ng concern to the
Vatican. In eastern Rurope, particularly, there have long
been Indications that the USSR Intends to eliminate the
Vatican's Influence and to transform the Roman Catholic
Churches Into front organizations. Vatican fears in this
connection are well based In view of Soviet successes in
subordinating the Eastern Orthodox Church to the Communist
Goverrmients of eastern Europe.
Currently, the Vatican Is faced with the problem
of defection by Roman Catholic groups in the Satellite
countries, where government pressure on the local Roman
Catholics,, both laymen and clergy, to form national (pseudo-
Catholic) churches has recently been intensified. The. Vatican
tears the existence of such defection in Czechoslovakia, where
"Catholic" Communist organizations periodically meet and
announce additional membership o In Hungary some priests have
already succumbed to Government pressure.
Progress in the ant1 Vatican campaign has been rapid
In Rumania. Late in April a pseudo-Catholic Action Committee,,
allegedly comprising 120 Roman Catholic clergy and laymen,
passed a resolution expressing the desire that the Roman
Catholic Church be "integrated" with the Rumanian system of
Government a On 3 May, the holy Office- announced the excomnua
nicatlon of the head of this Committee., a Rumanian Archpriest
named Agotha, charging him with having "abetted a Communist-
inspired split In his country with the mother chhurch"
Probably the most surprising blow sustained by the
Vatican in connection with the Communist policy of establishing
national churches isolated from the Holy See was the recent
Church-State agreement In Poland, where the hierarchy had
previously been considered by the Vatican as a last bastion of
Roman Catholicism in eastern Europe. Although the Polish
hierarchy's capitulation was partly due to Communist pressm?e,
questions Involving national interest, such as the bishoprics
of the Polish Administrative Zone (formerly German territory),
undoubtedly influenced the Polish Bishops to compromise with
the Government. This problem of national interests will
continue to be a particularly formidable obstacle for the
Vatican In its struggle to prevent the development of nationa:l
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"Catholic" Communist organizations.
In addition to the situation in eastern Europe,,
the Vatican is further plagued by sporadic indications
that "Catholic" Communists are active In western Europe,,
adhere the effects of the excomunioation decree of June
1949 have been disappointing to the Holy See. Furthermore.,
"Catholic Communists are said to be infiltrating into
Latin America., possibly with the connivance of authorities
in eastern Europe.
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