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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400050005-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 5
• Publication Date: December 20, 1950
• Content Type: PAPER

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WESTERN EJROPE DIVISION
OFFICE OF RESEARCH AND REPORTS
CENTRAL INT17? LIGENCE AGENCY
DIVISION WEEKLY
For week ending 19 December 1950
20 December 1950
NOTICE: WORKING PAPER
This document is a working-paper, not an official
issuance, since it has not necessarily been coor-
dinated with and reviewed by other components of
O/RR. It represents the formulative thinking of
one group of analysts in O/RR and is designed to
provide the medium for transmitting their informal
views to other intelligence analysts of the US
Government who are working on similar or over-
lapping problems. It is intended for the use of
the addressee alone,, and not for further dissemina-
tion.
"Due to organizational changes within CIA, this
publication will be discontinued after this issue."
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COPY FOR:
DOCUMENT NO.
o RANGE IN CLASS. ^
IECL ASSIFIEC)
? ASS. CHANGED TO: T 3 0
NF,XT REVIEW DA I LH:
AUTH : R
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WESTER] EUROPE DIVISION
WEEKLY SUMMARY
For week ending
19 December 1950
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S E C R E T
AUSTRIA
The failure of the Austrian Communists to bring
about a genera strike in c o er apparen y s had little
effect on the Party's plans for further labor disturbances.
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In the wake of large-scale dismissals of Communist labor
union officials (following the October general strike),
the Communists are now using r;tron'-arm tactics in an effort
to disrupt the normal functioning of the trade unions. To
date, such efforts have been concentrated in the Soviet
occupation zone, Where the trade unions have been reluctant
to undertake counteraction against the Communists. These
Communist attempts appear to be part of the Soviet-Communist
recurring pattern of intimidation of the population in the
Soviet zone of Austria. In addition, renewed Communist
inspired disturbances at Austrian labor union meetings may
be the beginning of a long-rumored Communist campaign to
exploit Austrian economic difficulties, which are expected
to reach a peak during January-February 1951. Although no
numerical gain will accrue to the Communists and it is un-
likely that they will be able to intimidate seriously the
Austrian popular 3 on, it. is quite probable that they may
successfully create . ocal di.ataxrhances. The occurrence of
large-scale disorders during this period is largely contin-
gent upon the amount of Soviet support the Communists re-
ceive.
FRANCE
The uncertaint of France's contribution to Western
defense will-be a -mmented-i ommun s e ow trave ers suc-
ceed in coil . n ng even a few of the various proponents of
neutrality with those elements irritated by French "sub-
servience to the US. Capitalizing on UNN reverses in Korea,
French reluctance to rearm Germany, and the recent Soviet
overtures for the neutralization of Germany, the crypto-
Communists are concentrating on the feeling of helplessness
with which .,riany French-en consider their exposed position
and their present inadequate defense system. The first
national convention of the recently organized Progressive
Union--a Communist-front organizat'.on which groups representa-
tives of several leftist parties and even some Right-of-
Center Radical Socialists--has called for a campaign to re-
gain French "independence" from Western as well as Eastern
domination. This is, in effect, an anti-US drive whose pur-
pose is to sever French ties with the NATO,
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8 E C R E T
Although active leadership of this new "peace"
movement has been so far restricted to fellow-traveling
elements, German Chancellor Adenauer is convinced that the
diverse French elements opposing German rearmament really
desire to neutralize Germany --- a situation which he be-
lieves-can lead only to the neutralization of France*. While
the necessity of German participation in western defense is
generally recognized by the French press, opposition to Ger-
man rearmament is stressed in a recent article in Le Monde,
the independent conservative daily which spear-hea3ed the
abortive neutralist drive last spring. Le Monde's editor
has intensified his earlier demands for a neutral--Europe
committed neither to the "Anglo-Saxon" nor to the Soviet camp.
The Progressive Union's "independence" front will
begin soon to undermine French support of NATO policies as
it concludes some alliances with Socialist and Radical-
Socialist dissidents in the Assembly. This danger is not
imminent, however, since the non-Communist elements disposed
toward h?utrality are generally careful to eschew any colla-
boration in Communist-nanipulatcd moves. Over the long
term, the danger racy be intensified, inasmuch as the PCF
has usually succeeded in forming alliances tending to in-
crease considerably its electoral strength, which has al-
ready shown signs of growth during recent months.
Although total ex enditures
~ profected in the
greater glen est ma a ac expen tunes in 1950, vpar-
liamentary opposition to particular provisions of this draft
over the coMing weeks will probably result in further dis-
unity within the coalition and a weakening of the Government's
tax-.inerease program. These results would make it more
difficult for the Government to take financial and economic
measures adequate to check the g rowing inflationary pressures
which portend deeper labor unrest and less effective defense
efforts. The parties of the majority are not likely, how-
ever, to disagree on the proposed military budget of 740
billion francs (16.) increase over actual 1950 military ex-
penditures). Nor is the Government likely to fall soon on
budgetary issues.
Proposed expenditures for 1951 total 2,715 billion
francs (about ""7.8 billion). Ordinary receipts would amount
to 1,847 billion francs, leaving a deficit of 868 billion
francs (about w2.5 billion --. over 30-'f of the total budget),
to be financed vith US military aid and by borrowing. The
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draft budget amounts to about 42% of France's estimated
national income for 1951, and hence is the equivalent of a
US Government fiscal effort of about $92 billion.
Parliamentary disagreement on the 1951 budget will
revolve mainly about the means of raising 165200 billion
francs in new taxes. On this issue the general opposition
of the Radical Socialists (representing; business interests)
to any tax I.ncr ,ases poses the armatest oroblem The Radicals'
preference for ^rrcnnmleF, especially in- the civil service,
runs directly counter to the interests of the other two major
parties of the coalition - the Socialists and the Popular
Republicans (MRP) , Furthermore, while these two parties
advocate in general the idea of increasing taxes moderately,
they seek to impose the additional burden almost entirely on
industry and on the more well-to-do classes, by levying ex-
cess profits and luxury taxes. They are strongly opposed
to increases in indirect taxes -- which are most easily
collectible in France -- because these taxes are a dispro-
portionately heavy burden on the working class and would add
to current inflationary pressures.
The Pleven Government is likely to have considerable
success in averting a critical split within the coalition
on the issue of higher taxes, althoufh it will probably be
forced to accept major modificationr in its tax programs.
Premier Pleven has announced that he will ask for votes of
confidence as often as necessary to insure parliamentary
acceptance of the Government's draft budget. The majority
parties are not likely at this time to permit the Govern-
ment to be defeated on such a vote - and thus make immediate
elections almost inevitable. These parties are intent upon
first achieving; electoral reform so that the smallest possible
Communist representation may be elected to the next Assembly.
On the other hand, the Radicals will probably insist that
Pleven keep his promise to introduce an electoral reform
bill by the close of 1950, and the Government will probably
do so just before Christmas, partly in order to win the
Radicals over to its tax proposals. Inasmuch as the coali-
tion parties are seriously divided on the provisions of
electoral reform, however, the Government may then intro-
duce an interim bill merely abrogating the present electoral-
law. This tactic would appease the Radicals for the moment,
without permitting; disagreonent over the new electoral law
to aggravate the Government's political difficulties in ob-
taining parliamentary approval of its draft budget.
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