WESTERN EUROPE CANADA INTERNATIONAL ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000400150001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 12, 2016
• Document Release Date: April 1, 2002
• Sequence Number: 1
• Publication Date: February 21, 1975
• Content Type: NOTES

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Secret
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9
Western Europe
Canada
International Organizations
State Department review completed
Secret
OCI-0137-75
February 21, 1975
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WESTERN EUROPE - CANADA - INTERNATIONAL ORGANIZATIONS
This publication is prepared for regional specialists in the Washington com-
munity by the Western Europe Division, Office of Current Intelligi nce, with
occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed tr
the authors of the individual articles.
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Portugal's Economic Program Sets
Large Government Role . . . . . . . . . . . 1-2
on NATO, US . . . . . . . . . . . . . . . . 7-8
Lisbon Reviewing Policy Toward Timor
Greek Defense Minister Optimistic
EC Commission Outlines Goals for 1975 . . . .13-14
February 21, 1975
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Portugal's Economic Program Sets Large
Government Role
The official version of the long-awaited economic
and social program, released yesterday by the Portuguese
government, provides for heavy government super-
vision of the economy through control of key industries
and natural resources. The program declares that
Portugal will build "a society in which the inter-
vention of the state will guarantee that the principal
resources are employed for the well-being of the
Portuguese people."
Government control of essential industries like
oil. and gas production, petrochemicals, steel, and
electricity will range up to complete nationalization.
The program maintains, however, that "the larger part
of economic activity" will remain in private hands.
Foreign investment is welcomed, except in defense-
related industries, banks, and electricity. Outside
funds are invited in areas where Portuguese technology
will be improved, exports increased, or jobs created.
In agriculture, the program calls for a limit of
125 acres on irrigated farms and provides for limited
expropriation of unused land on large holdings which
will be converted into cooperative farms.
The government's program drew criticism from the
communist-dominated labor confederation even before
it was made public. The confederation held that its
representatives were not consulted in all areas covered
and that positions counter to the Armed Forces Movement
had been adopted.
February 21, 1975
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The US embassy in Lisbon reports that super-
vision of the economic program is among the legis-
lative powers delegated to the seven-man military
junta by the Movement. The junta's powers are also
said to include removing harmful influences of the
prior regime and ensuring that future governments
adhere to the Movement's plans.
According to two air force members of the
junta, the Movement is entering negotiations with
the political parties to establish a platform for
each that will conform to standards set by the
Movement. The parties reportedly must agree to
accept the economic program for the next three
years and to abide by the junta's interpretation
of both the Movement's program and the economic
program.
February 21, 1975
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25X1A
Lisbon Reviewing Policy Toward Timor
There are indications that Portugal
is in the process of sorting out its views
on the future of Timor.
Several Portuguese colonial officials
and politicians from Timor, including the
governor, Colonel Lemos Pires, were scheduled
to arrive in Lisbon earlier this month for
consultations on the decolonization process.
Pires, however, has delayed his departure
until later this month and will stop over
afterward in Jakarta to discuss the Timor
political situation with Indonesian officials.
In the past, Portuguese policy toward
Timor appeared to be based on the assumption
that the territory would remain tied to
Lisbon for the time being. There has been
a gradual change in Lisbon's attitude, however,
and the Portuguese apparently now are prepared
to accept Timor's eventual annexation by
Indonesia, perhaps in four or five years.
Independence for the island possession is
not regarded as a viable alternative by the
regime in Lisbon, because an independent Timor
would be an unstable entity, both economically
and politically.
During his trip to the Far East last October,
Minister of Interterritorial Coordination Santos
visited Jakarta, where he expressed support for
earlier statements by President Costa Gomes
and Foreign Minister Soares that Portugal would
not oppose annexation by Indonesia. Santos
said that he considered such a union a "logical"
step. He declared, however, that Portugal
wants an orderly and peaceful transition that
would. provide the people of Timor with the
maximum opportunity to express their own desires.
February 21, 1975
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One result of the Lisbon consultations
might be a decision to set a timetable for
Timorese elections and establish guidelines
for the political parties that will be author-
ized to operate in the territory. Just last
month the two largest political parties on
Timor formed an alliance to work for independ-
ence. At least three other parties have been
established, one of which advocates annexa-
tion by Indonesia.
Santos stated that after the April elections
in Portugal, a constituent assembly would be
elected in Timor within 12 to 18 months. The
assembly would prepare a constitution and decide
the island's future status.
Portugal is likely to be reluctant to
hasten the process of annexation by Indonesia,
because such action would contradict Lisbon's
own stated concern for self-determination.
Lisbon's acquiescence in Timorese demands for
independence would precipitate Indonesian
military intervention.
Portuguese leaders have given the impression
that an "orderly transition" can be best achieved
in cooperation with Indonesia. Such an approach
would require extensive collaboration between
Lisbon and Jakarta. At a meeting in New York
last fall, Foreign Minister Malik agreed in
principle to personal contacts for the purpose
of promoting cooperation and consultation.
As the first step, Indonesia is due to send
a delegation to Lisbon soon to set up a diplomatic
mission.
The Portuguese, meanwhile, have indicated
that the bulk of their 1,000 troops would be
returned to Portugal this spring ("by Easter").
They plan to leave behind a few hundred technicians
to tra recruits, who now number about
3,000. t~~ I
February 21, 1975
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Greek Defense Minister Optimistic on NATO, US
Greek Defense Minister Averoff continues to be
optimistic about the future of relations with NATO
and the US and about Prime Minister Karamanlis'
ability to consolidate his power in Athens.
Averoff told Ambassador Kubisch on Tuesday
that Athens is disposed to maintain a close
relationship with NATO and the US, but that the
humiliation suffered by Greece in Cyprus would
necessitate a modification of Greek ties to its
western allies. The defense minister added that a
return to the status quo ante in Cyprus would permit
Athens to re-enter NATO's integrated military command.
Since a return to status quo ante is not possible,
he said, Greece will seek a relationship similar to
the French, but one tailored to the Greek situation.
Averoff said he thought the French are more "in"
than "out" of NATO.
Averoff expressed satisfaction with the first
round of discussions last week between US and Greek
officials on the status of US facilities in Greece.
He acknowledged that the facilities served Greek
interests and predicted that the talks would turn
out well.
In last week's negotiations, Greek officials
seemed to concentrate on eliminating the more
visible aspects of the US presence, such as the
home port at Piraeus and the air base near Athens.
On the domestic side, Averoff said that the
shake-up in the armed forces would be completed by
June, barring some major disaster. He noted that
there was some disaffection in the services arising
from the government's relaxed attitude toward student
demonstrations. He added, however, that his contacts
within the officer corps have kept him aware of
stirrings in the armed forces.
February 21, 1975
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EC Commission Outlines Goals for 1975
EC Commission President Ortoli, in his annual
report to the European Parliament this week,
issued a ringing call for the Nine to revitalize
the Community and regain Europe's independence of
action and international standing.
Ortoli was harshly critical of the EC's
relative ineffectiveness and poor showing in inter-
national forums during the past year or so. He
commented--correctly--that it has "failed miser-
ably to speak with a single voice on vital issues"
and that "dissension and bickering have ruled us
out of a game in which the stakes are Europe's
interests and its future." He contrasted such
failures with the international role played by the
US, adding however, that friendship with the US
should not "blind us to the reality that we must
defend our own interests with the same firmness
that the US displays."
This bleak picture of the Community, accord-
ing to Ortoli, has improved only slightly of
late. He mentioned as examples of progress the
Nine's renewed recognition of their economic
interdependence, the creation of the regional
development fund and new policies to assist under-
developed countries.
The principal elements of the Commission's
1975 program were outlined--in order of priority--
as follows:
--The achievement of greater independence for
Europe in order to obtain more control over its
own destiny. Reliance on external sources of
energy and raw materials supplies is an important
restraint on independence and formulation of an
EC common energy policy is thus a top priority
objective.
eebruary 21, 1975
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--The re-establishment of economic and social
equilibrium in Europe.
--The development of a new relationship with
the underdeveloped countries, based on long-term
economic cooperation, in order to both ensure raw
material supplies and continued progress by the
lesser-developed states.
--Resumption of progress toward European
economic and monetary union by the creation of
such new instruments as a strengthened monetary
cooperation fund, a medium-term research institute,
and additional machinery in the energy field.
--Further steps toward Europe=an political
union.
According to an EC Commission official,
many of the initiatives which Ortoli intends to
propose to the Council in order to advance this
year's program objectives are only in the plan-
ning stage. Moreover, Ortoli apparently intends
to push ahead with any politically acceptable
measures which might renew impetus toward achieve-
ment of the Coanmunity's major long-term goals.
Such an approach is in marked contrast to Ortoli's
previous method which was based on a carefully
planned and phased program.
February 21, 1975
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