WESTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A001300330001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 19, 2016
• Document Release Date: August 16, 2005
• Sequence Number: 1
• Publication Date: July 15, 1975
• Content Type: NOTES

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Popular Democrats Expected to Leave
Portuguese Coalition . . . . . . . . . . . . . 3
Austrian Proposes Grand Coalition . . . . . . . 6
Group of 77 Prepares for UN
Special Session . . . . . . . . . . . . . . . 7
Spanish Communist Party Leader Expounds
on Post-Franco Spain . . . . . . . . . . . . . 9
Leaders of the Nine Meet in Brussels.
July 15, 1975
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Popular Democrats Expected to Leave
Portuguese Coalition
The Portuguese Armed Forces General Assembly
session scheduled for today has been put off until
Friday, possibly because of the likely departure
of the center-left Popular Democrats from the
coalition government tomorrow.
According to Popular Democratic leader Balsemao,
party head Guerreiro was told yesterday by Prime
Minister Goncalves that the government will not
accept the conditions presented to President Costa
Gomes last Friday by the Popular Democrats. The
conditions, which Guerreiro said would determine
whether or not the Popular Democrats would with-
draw from the government, included guarantees for
a free press, municipal elections, and Movement
support for the moderate-dominated constituent
assembly. Balsemao is convinced that Costa Gomes--
after consultation with the Revolutionary Council?
will reject the proposals when party leaders meet
with him tomorrow, leaving the Popular Democrats
no choice but to pull out of the government.
A withdrawal by the Popular Democrats--less
than one week after the Socialists pulled out--
could prompt military leaders to dissolve the
remains of the coalition government rather than
continue with only Communist support. One left-
wing splinter party usually sympathetic to the
Communists has called for the formation of a
"noncoalition revolutionary government" with
nonpartisan civilian participation. This concept
might appeal to the Movement as a complementary
structure for their planned pyramid of popular
assemblies. Another option would be simply to
appoint an all-military government.
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The outspoken opposition to these "direct
links" with the people through "popular assemblies"
appears to be aggravating divisions within the
military and has generated effcrts to reassure
the people that the military does not intend to
assume dictatorial powers.
In a televised discussion on Sunday that was
characterized as "defensive" by the Communist-
dominated press, four Revolutionary Council members
said that the plan is not definitive and needs
further discussion. They said the plan was designed
to increase political participation by the people
and would proceed at a pace determined by popular
July 15, 1975
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Austrian Proposes Grand Coalition
Austrian opposition leader Karl Schleinzer,
chairman of the Austrian People's Party, surprised
parliament during a recent debate by announcing
that if his party gets a plurality in the October
elections, he would try to form a grand coalition
comprising Austria's three major parties. The
People's Party is the second largest of the three
parties. Presently, Chancellor Kreisky's Socialist
Party has an absolute majority, thus excluding the
other two parties from government.
Recent polls indicate that the Socialists may
not be able to retain their slim lead after October.
Kreisky has said that he would not form a coalition
with any party, but has shown signs of concern that
the Socialists will fail to repeat the clear cut
victory they won in 1971. In June, the Chancellor
included Friedrich Peter, leader of the small,
right-wing, Liberal Party, in the delegation he
headed to West Germany. This gesture has given
rise to speculation that Kreisky may hope to per-
suade Peter not to join in a coalition with Schleinzer
in the event the Socialists fail to win a majority.
July 15, 1975
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Group of 77 Prepares for UN Special Session
At the UN Economic and Social Council,
now in its summer session in Geneva, the
caucus of developing states is putting the
finishing touches cn a proposed agenda for
the fall special session of the UN General
Assembly. The document is based on an Indian
draft and is intended to take into consideration
the criticism of earlier proposals by moderate
developing states and the industrialized
world. The text nevertheless includes many
of the same objectionable provisions that
have been at the root of the confrontation
between rich and poor states in the UN for
more than a year.
The Group of 77--the UN caucus of more
than 100 developing states--will meet on
Wednesday to approve the draft agenda and
will begin consultations with the major
industrialized countries by the end of the
week. Given the inability thus far of the
developed countries to come up with joint
positions to meet the demands of the developing
countries, many of the major industrialized
countries will feel they have little choice
but to negotiate on the basis of the draft
presented by the Group of 77. These developed
states will be reluctant to reject the draft
out of hand, believing that only through
negotiations will it be possible to prevent
the Spedial Session from turning into the same
brouhaha as previous UN meetings on development.
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The Group of 77 paper seeks:
--to establish regulations to control commodity
markets in favor of developing states,
through stockpiling, international funding
of market-intervention arrangements, and
facilities to compensate developing countries
for the loss of export earnings;
--to link the prices of raw materials exported
by developing countries to those of the
manufactured goods they import--i.e.,
indexation;
--to improve the access of developing countries
to markets in the industrialized world
through preferential trade arrangements;
--to provide special development assistance
to the poorest developing states;
--to implement a system providing for auto-
matic transfer of development resources
from rich to poor countries so that by 1980
the industrialized states would, at a
minimum, provide the equivalent of one
percent of their GNP in development aid;
--to allow debts of developing countries to
he extended or forgiven;
--to increase the level of representation
of developing states in international
economic fora such as the IMF and the
World Bank; and
--to improve access by the developing states
to advanced technology ava>lahl in
industrialized countries.
,July 15, 1975
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Spanish Communist Party Leader Expounds on
Post-Franco Spain
In a conversation last week with an official
of Time magazine, Santiago Carrillo, secretary
general of the Spanish Communist Party, endeavored to
give a reassuring picture of post-Franco politics
and the role his party will play. Carrillo's
remarks are in keeping with his efforts to under-
score his party's willingness to cooperate with
other parties in creating a democratic government.
He thus hopes to reassure Spaniards and foreigners
alike that they need not fear Communist participation
in the post-Franco government and thereby enhance
Communist chances of participation.
Carrillo predicted that the overthrow of
the Franco regime will be a relatively peaceful
process, but he refused to be specific as to
how this would be accomplished. His reticence
could stem from not wanting to reveal his strategy,
but it could also indicate that he has no specific
plan.
According to Carrillo, the Democratic Junta,
the popular front that he and ex-monarchist
Rafael Calvo Serer formed in Paris last summer,
will play a key role in the days following a
change in the Spanish regime. In keeping with
his moderate image, Carrillo claimed that the
Junta's objective is to restore civil liberties
and democratic institutions and not to impose
socialism. He did add that this will come later.
Carrillo expressed confidence that the junta
will eventually become a broad-based left-of-center
coalition with the allegiance of all socialist
factions. Available evidence, however, does not
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justify his optimism. The two principal socialist
groups were among the 16 clandestine political
parties and organizations that formally constituted
themselves into a Democratic Conference last June
as a rival to the Democratic Junta which they
refused to join because it is Communist-dominated.
Carrillo stated he is satisfied in his role
as secretary general of the party but admitted
that if the "comrades" ask him to assume a minis-
terial portfolio in the post-Franco government
he would agree to do so.
Carrillo's most caustic comments were aimed
at Prince Juan Carlos, whom Franco has designated
as his successor as chief of state. Carrillo
stated the prince is totally unacceptable and
will have to go. While he did not indicate how
this removal would be accomplished, Carrillo
maintained that Juan Carlos could not stay on
the throne more than "a couple of months."
Perhaps to reassure those who believe that
the monarchy is the institution most capable of
governing after Franco, Carrillo stated that Don
Juan, Juan Carlos' father who was passed over
by Franco, is acceptable as king and need not
have his rule subjected to a referendum immediately
after he take over.
Reflecting his personal disapproval of Por-
tuguese Communist Party leader Alvaro Cunhal and
the role he is playing in radicalizing the Por-
tuguese government, Carrillo berated the US for
having failed to take steps to prevent the
Lisbon regime from going as far as it has gone.
He claimed that the US should have found ways
while General Spinola was still president to
stop Cunhal from "appropriating the Portuguese
revolution." Carrillo is especially concerned
that a radical government in Portugal will hurt
his own chances of playing a role in post-Franco
Spain.
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Finally, when asked about his attitude toward
US bases in Spain, Carrillo said "Americans can
stay in Spain for as long as the Russians keep
troops in Czechoslovakia." Carrillo has long
been a prominent critic of the Soviet interven-
tion in Czechoslovakia, but in the past has
opposed US bases in Spain. His change of tune
may be an effort to soften US reaction should the
Communists succeed in becoming part of the ost-
Franco government. F7
July 15, 1975
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The continuing economic recession and
its impact on Western Europe will dominate
the discussions of the nine EC heads of
government when they meet in Brussels today
for their second so-called European Council.
No major new initiatives are in prospect
during the two-dav meeting.
Given the varyinq degrees of recession
and inflation affecting EC members, uniform
remedies are virtually ruled out. The leaders
may, however, agree to call on the US to
initiate additional measures to stimulate
the economy.
President Giscard, having requested
that the agenda include international monetary
problems, may again warn against the threat
of "uncontrolled floating of the dollar"
and urge a fixed relationship between the
community currencies and the dollar. He
will also press for EC acceptance of the
French proposal calling for a monetary conference
in October that would be attended by the
US, West Germany, the UK, France, Japan
and a representative of the EC as a whole--
a device to include Italy, now the EC chairman.
Rome has previously complained of exclusion
from "Big Five" meetings.
With the British referendum on EC membership
a success, the nine leaders will begin discussions
on the further development of the community.
They will hear an interim report from Belgian
Prime Minister Tindemans, who is charged
with preparing by the end of the year a
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so-called "wiseman's report" on the prospects
for European union. Giscard and German
Chancellor Schmidt may engage in a candid
discussion of this subject when they meet
in Bonn late this month.
Prospective community financial aid
to Portugal also is on the Brussels agenda.
The EC has appeared ready to offer a substantial
amount of aid on easy terms--variously reported
as between $500 million and $1 billion--
conditioned upon the development of democratic
institutions in Lisbon. Last week's political
changes have given rise to second thoughts
on the part of some members, notably France
and the UK, and the Nine probably will not
announce approval of a specific amount.
They will probably agree to go ahead with
a scheduled meeting on July 22 between the
EC Council and Portuguese Foreign Minister
Antunes.
The leaders will also try to develop
a common position on relations with the
less developed countries, particularly with
respect to raw materials, in the context
of this fall's special session of the UN
General Assembly. The EC is aware that
its proposals could form the basis for a
common policy for the developed nations.
The unwillingness of certain EC members
to be generous toward the third world becomes
evident when efforts are made to frame precise
offers. The Nine nevertheless would like
to preserve a "European identity" in the
matter of policy toward the developing nations,
particularly since they have been unable
to maintain a united front in international
energy matters.
Ongoing trade negotiations with certain
Arab states and the EC-Arab dialogue are
proceeding on schedule and the European
leaders are expected to do no more than
briefly review progress. The US request
for emergency financial assistance to Egypt
will probably also be considered.
July 15, 1975
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Secret
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