WESTERN EUROPE REVIEW
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Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP79T00912A001600010009-3
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RIPPUB
Original Classification:
S
Document Page Count:
25
Document Creation Date:
December 20, 2016
Document Release Date:
August 2, 2005
Sequence Number:
9
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Publication Date:
November 1, 1978
Content Type:
REPORT
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National
ro*iediftr Release 2006/03/17 : CIA-RDP79T00912AO0160001
Assessment
Center
Western Europe
Review
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State Department review completed
Secret
RP WER 78-014
1 November 1978
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WESTERN EUROPE REVIEW
1 November 1978
CONTENTS
West European Stance on Arms Collaboration . . .
At a meeting of the Independent European Pro-
gram Group, the West Europeans are likely to
welcome the latest US proposal to share weapons
production more equitably.
Turkey's Justice Party: Stand-Pattism in the
Ascendancy . . . . . . . . . .. . . . . . . . . 12
Suleyman Demirel, Turkey's most durable
politician, confirmed and perhaps even
strengthened his domination of the Justice
Party at its convention two weeks ago.
Italy: The Politics of Economic Issues . . . .
The firmness of the Andreotti government's
support will soon be tested by parliament's
consideration of several complex economic
issues.
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Sweden: A Look at the New Government . . . .
The new minority Liberal government will
attempt to put its own stamp on programs
already under way and to test the polit-
ical climate in preparation for parlia-
mentary elections next fall.
. . .
22
. . .
25
. . .
28
Austria: Referendum on Nuclear Power Plant .
Voters are likely to approve the start-up
of the country's first nuclear power re-
actor in a referendum on 5 November.
Socialists Meet in Vancouver . . . . . . . .
This year's Socialist International Congress,
to be held in Vancouver from 3 to 5 November,
will consider the general theme of "Peace
and Development."
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West European Stance on Arms Collaboration
At the biannual plenary meeting of the Independent
European Program Group (IEPG) next week, the West Euro-
peans are likely to welcome the latest US proposal to
share weapons production more equitably. At the same
time, the representatives will be looking for additional
signs that the US is serious about its commitment to a
"two-way street" in arms production and sales.
Background
The West European interest in a more balanced rela-
tionship was kindled in part by NATO's desire to adjust
its defenses to offset changes in the military capabili-
ties of the Warsaw Pact, particularly its enhanced capa-
bility to mount an unreinforced attack as well as its
deployment of increasing numbers of new weapons. The
latter trend is of general concern because it is eroding
the qualitative edge which NATO has traditionally relied
on to offset superior Pact manpower. On the other hand,
the Pact's increased ability to launch an attack with
little warning is regarded with particular concern by
West Europeans who would bear the brunt of it.
West Europeans see the issue of arms collaboration
in the broadest possible terms. To them, the need for
improved cooperation in this area involves political and
economic objectives and relationships as well as mili-
tary ones. Their concern about blunting the East's
ability to launch an unreinforced attack, for instance,
has more to do with a desire to feel comfortable about
pursuing closer relations with the East than with an
expectation that such an attack is imminent or likely
in the near term.
The Arms Dialogue
For West Europeans, key tests of the US commitment
to a "two-way street" in the arms trade are increased
purchases of West European weapons and sharing of US
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technology. At a recent meeting of the Conference of
National Armaments Directors (CNAD), West Europeans wel-
comed new US proposals designed to reduce procurement
costs and share more of the weapons trade. They saw the
proposals as a sign of good faith, but wanted additional
details on what weapons categories might be involved and
how the proposals relate to the issue of increased arms
collaboration among West Europeans.
While the Allies share the US interest in reducing
arms procurement costs by harmonizing development plans
and production schedules, they also want to maintain and
enhance a West European arms production capability in
order to sustain their political influence in the Third
World and improve their leverage vis-a-vis the US and
the USSR. Since the onset of the discussions about im-
proving the West European share of the arms trade, the
Allies have questioned the willingness--or even the
ability--of the US to depend on foreign suppliers for
important technology or for entire weapons systems.
The West Europeans are taking a hard look at cer-
tain issues:
-- West Europeans see the first element of
the US proposal, bilateral memorandums
of understanding between individual
countries and the US, as a way to facili-
tate fair competition by avoiding "buy
American" legal requirements. Seven
Allies have signed such a memorandum
and others appear likely to do so in
the future. The West Europeans want
to ensure, however, that in the event
of conflict between a bilateral project
and a multilateral one undertaken by
the IEPG, the IEPG project will have
precedence.
-- The Allies see co-production of specific
weapons and equi ment, which involves
the sharing of technology, as a posi-
tive idea. But they would like the
concept extended to permit the produc-
tion of West European systems--like the
Franco-German Roland missile--by other
West European countries.
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-- West Europeans have welcomed the US pro-
posal for the eventual purchase of en-
tire "families" of West European arms
by the S. But they would like to know
which weapons the US is prepared to iden-
tify for West European production, and
they want assurances that, in the future,
US industries will not be able to nullify
or undercut an agreement. They are also
anxious to know how national arms produc-
tion capabilities will be preserved.
Another important issue is a need to take the in-
terests of the smaller Allies into account. This is
likely to be the task of the next country to chair the
IEPG beginning in the spring of :L979--perhaps Norway,
a small country with a significant production capability.
The smaller Allies are wary of agreeing to production
subsidies and dual production arrangements without ob-
taining assistance to maintain and develop their own in-
dustries. These views are taken seriously by the other
Allies. At the recent CNAD meeting, the British repre-
sentative declared that the IEPG may as well disband if
the interests of the smaller Allies cannot be accommo-
dated.
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Turkey's Justice Party: Stand-Pattism in the Ascendancy
Suleyman Demirel, Turkey's most durable politician,
confirmed and perhaps even strengthened his domination
of the Justice Party at its convention two weeks ago.
Senator Kamran Ivan, who had hoped to make a respectable
showing against Demirel in the race for chairman, got
only 88 votes from the 1,550 delegates and lost his seat
on the governing board. Demirel's overwhelming victory
conceals serious problems, however. Although the right-
of-center party is still Turkey's second largest and
Demirel remains popular with the peasants who are its
most numerous constituents, the party's electoral base
seems to be shrinking. To no small degree the shrinkage
is due to a growing belief that the party under Demirel
lacks dynamism. But beyond that, Demirel and his party
are caught between the forces of urbanization and modern-
ization on the one hand, and a traditionalist reaction
to those forces on the other. Turks who put a high value
on the modernizing process appear to be drifting toward
Premier Ecevit's Republic People's Party, while tradi-
tionalists voters are turning toward the more radical
parties on the right--particularly the fast-growing,
neofascist and pan-Turanist Nationalist Action Party.
Thus, although the Justice Party will probably hold on
to most of the peasant vote, it may suffer slow erosion
on both the left and the right.
Not even Ivan himself expected that his challenge
would lead to Demirel's immediate ouster. Because there
had been a strong undercurrent of dissatisfaction at
some of the provincial congresses, however, many observers
thought Ivan might attract. two or three hundred votes at
the national convention. A tally of this size probably
would have forced Demirel to appoint Ivan and some of
his followers to key positions; it might even have set
the stage for Demirel's eventual deposition.
Inan's crushing defeat greatly reduces his own
political prospects, but the complacency now evident in
the Demirel camp seems ill-advised. In the first place,
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Ivan was hardly the ideal challenger. As a Kurd with a
foreign wife, he drew hostility from his nationalistic,
ethnocentric Turkish colleagues, and his dry and didactic
speaking style was no match for Demirel's patented brand
of peasant folksiness. Even those who had been highly
critical of Demirel in private often found themselves
succumbing to his oratory and voting for him. The min-
uscule vote for Ivan, in other words, is not an accurate
measure of Demirel's strength within the party.
Nor do the party's electroal prospects warrant com-
placency. The convention delegates, most of whom were
middle aged, almost seemed to assume that simply because
the party had been in power for 12 of the last 14 years,
it would be back in government again before long. They
could be right, but at the moment the trends do not favor
them. The party's share of the vote has been declining
over the years: whereas Demirel was able to form an all-
Justice Party government in the late 1960s, he has re-
cently needed the support of smaller rightist groups--the
pan-Turanist, neofascist Nationalist Action Party and
the Islamic fundamentalist National Salvation Party--to
achieve a legislative majority. The need to keep these
fractious partners mollified, in turn, was one of the
chief factors contributing to Demirel's reputation as a
do-nothing premier. To complete the vicious circle, it
was this reputation that prevented the party from arrest-
ing its slow decline, thus making a coalition with parties
such as the NAP and NSP even more necessary.
Moreover, Turkish businessmen, long a prime source
of financial and electoral support for Demirel's party,
are becoming increasingly disenchanted. They would like
to see a "grand coalition" between Ecevit and Demirel,
on the theory that such a coalition could better solve
Turkey's enormous and internal security problems. But
knowing that neither politician is willing to consider
the idea, recognizing that business is doing fairly well
under Ecevit, and doubting that a Demirel government would
serve them any better, many of them are drifting away
from the Justice Party.
In the first several months after his government
fell last December, Demirel gave few signs that he was
coming to grips with these problems. His energetic
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performance at the party convention and in the few weeks
preceding it has heartened many party stalwarts. More-
over, the sheer strength he showed at the convention will
make potential dissidents think twice before breaking
with him. But if he fails to maintain the momentum he
has generated, and especially if he fails to stimulate
a search for new constituents, the party's long-term
prospects are not bright. With a politician of Ecevit's
skill to its left and two strident parties to its right,
the Justice Party will have trouble just maintaining its
present strength--much less gaining on its opponents--
without more vigorous direction from the top.
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Italy: The Politics of Economic Issues
The firmness of the Andreotti government's support
will soon be tested by parliament's consideration of
several complex economic issues closely linked to Italy's
broader political problems. Many of these issues, such
as pension reform and wage restraint, impinge directly
on the conflicting interests of the Christian Democratic
and Communist parties--the two major components of Prime
Minister Andreotti's parliamentary majority. After a sum-
mer of inconclusive polemics on ideological matters, such
questions may provide the first indications of the par-
ties' commitment to the current governing arrangement
and of their willingness to make politically difficult
choices on sensitive economic issues. Meanwhile, some
of Andreotti's opponents apparently hope to exploit these
problems and create strains that might eventually bring
down the government.
The pivotal role of economic issues in political
developments reflects the high priority the government
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SECRE
has attached to its three-year economic stabilization
program--the so-called Pandolfi Plan--which is designed
in part to curb the growing public sector deficit, expected
to hit $40 billion this year.
One of the government's proposals for trimming the
deficit involves a reduction in total pension payments
over a period of five years--unifying various Italian
pension programs into a single system. The draft bill,
for example, seeks to impose a maximum ceiling on all
pensions, raise the lowest ones, curb "double dipping,"
and slow the rate at which all pensions increases auto-
matically with the cost of living.
Organized labor has already reacted negatively and
announced its intention to lobby for changes when parlia-
ment takes up the plan. An especially sensitive problem
is treatment of Italy's self-employed and agrarian work-
ers--traditionally supporters of the Christian Democratic
Party. Presently, they make only token contributions to
their pension funds, forcing the burden of financing the
system onto industrial workers--the electoral base of the
Communist Party; the Christian Democrats, more than any
other party, have used the pension system as a source of
political patronage and power.
While the draft bill. does propose increased social
security contributions by the self-employed and agrarian
workers, the labor unions demand that such contributions
be raised enough to make the pension system solvent.
Labor's position will make it difficult for the left,
particularly the Communists, to support the bill in its
present form. They will probably push at least some of
labor's proposals in an effort to make pension reform
cut more deeply into Christian Democratic interests.
Limiting excessive pension benefits for Christian
Democratic supporters probably constitutes part of the
quid pro quo the government needs to obtain the support
of the Communist labor leaders in convincing the rank
and file to accept lower wages--the other key part of
the government's economic plan. The Communists and
their labor allies are already experiencing difficulty
urging wage restraint on the 5.5 million workers--about
half of Italy's unionized. labor force--negotiating new
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contracts this fall. For example, the metalworkers, who
often set the pace for other unions, have called in their
initial bargaining position for a reduction in working
hours and pay raises which could result in an annual in-
crease of 17 to 18 percent in labor cost by 1979.
Moreover, unions representing striking hospital
workers have threatened to organize a general strike of
public sector employees if the government refuses to
grant the hospital workers an immediate pay hike. An-
dreotti refused and scheduled an emergency parliament
debate this week on wage restraint in the public sector.
The odds are in favor of a compromise, but Andreotti's
forcing of the wage issue has created a difficult dilemma
for all of the parties, particularly the Communists.
Party chief Berlinguer has clearly signaled the desire
to continue supporting government economic policy but,
in the event of a government-labor deadlock on wage
policy, he would come under strong pressure not to desert
the unions.
The Pandolfi Plan's relationship to Italy's proposed
entry into the European Monetary System (EMS) has also
become a topic of political concern recently. The An-
dreotti government insists that the EMS, in its final
form, must take account of Italy's relatively weak econ-
omy and high inflation rate. Italy's EC partners, for
example, must assure Rome of adequate support measures--
such as flexible exchange rates and the transfer of real
resources during the transition period--to close the
gap between Western Europe's more prosperous and less
developed economies. On the domestic side, the govern-
ment emphasizes that enactment of the Pandolfi Plan is
the key to successful Italian participation in the Euro-
pean Monetary System.
Many political leaders, particularly the Communists
and the Socialists, are concerned about the link between
the Pandolfi Plan and the European Monetary System. In
their view, there is an inadequate trade off between the
benefits Italy might receive from participation in the
monetary system--such as a reform of the EC's common
agricultural policy and the transfer of economic resources
to aid Italian industrial development--and the austerity
measures Italy would have to adopt in order to participate
fully.
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Sweden: A Look at the New Government
Sweden's new minority Liberal government, which re-
placed the two-year-old coalition of the Moderate, Center,
and Liberal parties, will attempt to put its own stamp
on programs already under way and to test the political
climate in preparation for parliamentary elections next
fall. The three nonsocialist parties have a parliamen-
tary majority and the Liberals probably can count on sup-
port from their former coalition partners on many issues.
But there are areas of disagreement, particularly over
nuclear power development and economic austerity programs.
On both these issues, Prime Minister Ola Ullsten and his
Liberals may have little choice but to look for support
from Olaf Palme's Social Democrats--precisely the devel-
opment the Center and Moderate parties fear, and pre-
cisely the one for which Palme has been waiting.
The Nuclear Issue
Disagreements over nuclear power development brought
the previous coalition down. Former Prime Minister
Falldin withdrew from the coalition when he failed to
persuade his partners to deny research and development
funds for continued nuclear power development. Falldin
and his Center Party had made an issue of the risks in-
herent in nuclear power production and waste storage
during the 1976 election campaign and had promised to
initiate a phase-out of the program by 1985. During his
tenure he compromised to some extent, allowing two re-
actors to be loaded and accepting the eventual operation
of two more under strict technical safety restraints.
Some powerful Center leaders, despite polls which showed
a decline in support for their party and an increase in
support for the pro-nuclear Social Democrats, maintain
that the party must stick to its moral guns.
The Center Party may find it hard to persuade voters
to focus on the nuclear issue in the next election, in
part because extensive safety measures legislated in the
last several years have eased fears. Polls this fall
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on the nuclear power issue indicated a turnaround in pop-
ular attitudes toward the government program. The 57
percent who opposed nuclear power production in 1976 has
shrunk to 37 percent, while the proportion in favor has
increased from 26 to 53 percent.
The Economic Issue
The Liberals and Moderates may well clash over eco-
nomic policies. Gosta Bohman, leader of the conservative
Moderate Party and Minister of Economy during the coali-
tion's tenure, designed a policy of economic restraints
combined with a plan for restructuring industry. The
program is credited with bringing about a mild economic
recovery this year. Bohman's program will cause job
redundances this winter in the shipbuilding and steel
industries, however, and Ullsten may try to preserve
jobs by propping up the unprofitable shipyards. In so
doing, he would undermine Bohman's plan to foster high
technology industry and deny aid to uncompetitive in-
dustries. The Liberals may feel, however, that they
have no choice if they are to win support from labor.
The Liberal's traditional support for social welfare
programs could also tempt them to tinker with Bohman's
austerity program. Although Bohman had envisaged some
easing of the constraints during the election year, the
improvement in the economy may not be sufficient to ac-
commodate Liberal objectives.
Political Factors
The nonsocialist parties fear that Liberal inclina-
tions will lead the new government to look to the Social
Democrats in the Riksdag--the two parties would have a
significant parliamentary majority. The Center Party's
singlemindedness on the nuclear power issue probably
makes a return to the tripartite coalition impossible,
and both policy differences and personal antipathies will
make it hard for the Liberals and Moderates to get to-
gether. Ullsten may therefore find himself looking toward
Palme's Social Democrats.
By courting the Liberals and holding out the possi-
bility of forming a postelection coalition, the Social
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Democrats hope to bar a return to a center-right, non-
socialist government formula. More immediately, Palme
sees a tacit alliance with the Liberals as a means of
reining in the radical wing of his own party. In pushing
ideas such as "economic democracy," the radicals tend to
alienate the nonideological, swing voters who are in
part responsible for the party's present high standing
in the polls. F7 I 25X1
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Austria: Referendum on Nuclear Power Plant
Austrian voters appear likely to approve the start-
up of the country's first nuclear power reactor in a
referendum on 5 November, but this will not end the in-
creasingly divisive debate over nuclear energy. The
government of Chancellor Kreisky, who has hinted he
would resign in the face of a negative vote, still faces
the problem of locating an acceptable foreign repository
for the spent fuel from the reactor. Lack of a reposi-
tory has held up operations at the plant since it was
completed in January. Moreover, antinuclear sentiment
now is such that it has spawned sharp differences among
the governing Socialists and has forced the government
to scrap plans for a second reactor.
Although nuclear energy has been a contentious issue
from the start, it became even more so earlier this year
because of the government's maladroit handling of the
Zwentendorf power plant, located 70 kilometers northwest
of Vienna and built at a cost of $410 million. In Janu-
ary, Kreisky flatly rejected a referendum as an unsuit-
able device to decide the disposition of the plant. The
same month the government's premature announcement of a
spent fuel storage site near the plant evoked strong
protests from a public that had been led to believe that
Austria's nuclear waste from the US-supplied enriched
uranium would be stored in the US, as proposed by Presi-
dent Carter last October.
The Chancellor, who has publicly declared that
Zwentendorf would not start up until the spent fuel
question is settled, subsequently tried to get the So-
viets to accept the spent fuel, but was rebuffed by Pre-
mier Kosygin. The Austrians also made overtures to (and
received positive responses from) Iran and Egypt, but
demurred when it became clear that such plans were po-
litically unacceptable to the US.
In May, Kreisky reversed his stand on the referen-
dum alternative, a move that was clearly in response to
widespread public criticism of the government's inde-
cisiveness and to calls for action by antinuclear
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adherents in all three major political parties. The
Chancellor's decision came on the heels of talks with
US officials in Washington which, according to the So-
cialists' parliamentary leader, left the Austrian Gov-
ernment in a "very difficult situation" with no basis
for deciding what to do next.
In subsequent parliamentary action, the Socialists
attempted to line up broad support for its proposed ref-
erendum, but were stymied by joint efforts of the oppo-
sition People's Party and the strongly antinuclear Free-
dom Party to cast the referendum as a vote on the general
question of nuclear power. Although generally pronuclear,
the People's Party refused to cooperate with the govern-
ment because the Socialists had two years earlier spurned
a People's Party offer to cooperate on the nuclear issue.
The smaller Freedom Party, taking a cue from the success
of the antinuclear Swedish Center Party in the recent
Swedish parliamentary election, simply acted to exploit
a popular issue. In the ensuing maneuvering on the par-
liamentary floor in June, the Socialists used their abso-
lute majority to ram through their version of the refer-
endum, in the process provoking bitter confrontations
between pro- and antinuclear supporters and with the
opposition parties. Ironicially, Kreisky had heretofore
eschewed using his parliamentary majority to authorize
the start-up of the Zwentendorf plant to avoid such
polarization.
Despite the turbulence in parliament, both the
Socialists and the Federation of Trade Unions--the most
active nonparty supporter of nuclear energy--initially
expected the referendum easily to garner the two-thirds
majority necessary to start-up Zwentendorf. In Septem-
ber, the polls indicated that the vote would run about
60 percent for, 20 percent against, with the rest unde-
cided. More recently, however, Socialist leaders have
become concerned because the anti-Zwentendorf sentiment
seems to be gaining momentum and because they fear a re-
peat of the low turnout of Socialist voters that occurred
in the Vienna election early last month, resulting in a
setback for the Socialists. Although they continue to
believe that only 10 to 20 percent of the electorate
oppose Zwentendorf, a large turnout of antinuclear voters
could make for a very, close vote.
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In the meantime, the Socialists are trying to ex-
ploit divisions within the People's Party, hoping either
to improve the referendum's chances of approval or, fail-
ing that, to set up a scapegoat for Zwentendorf's con-
tinued shutdown. Kreisky obviously looks at the referen-
dum as a major test for his Socialist government while
the People's Party is seeking a headstart on next year's
general election. Although the issue of US nuclear policy
remains in the background, neither party is likely to
hesitate bringing it to the fore should there be politi-
cal mileage to be gained.
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Socialists Meet in Vancouver
This year's Socialist International (SI) Congress,
to be held in Vancouver from 3 to 5 November, will bring
together Socialist luminaries from around the world to
consider the general theme of "Peace and Development."
A great deal of spirited debate will be heard and con-
ference organizers will take pains to avoid the appear-
ance of disunity, but the International is still far
from becoming what SI President Willy Brandt hoped it
would--a Western-oriented "third force."
The conference agenda includes such topics as the
world economy (north-south relations and multinational
corporations), disarmament, Southern Africa, and human
rights. Latin America, the Caribbean, and the Asian-
Pacific region will be considered in separate meetings.
Just before the main SI Congress, the International Coun-
cil of Social Democratic Women will meet on the theme of
"Violence in Society."
The Dutch Labor Party (PVDA) intends to use the
conference to launch an international campaign against
President Carter's decision to manufacture components
for the neutron bomb. PVDA Deputy International Secre-
tary Relus Ter Beek is expected to address the neutron
issue in a speech to the congress on disarmament. Ter
Beek hopes to have the support of the Belgian and Luxem-
bourg Socialist parties as well.
The congress is likely to continue discussions of
past conferences, encouraging Third World countries to
pursue a goal of political and economic development that
is neither capitalist nor Communist, but socialist in
the Western sense. In past deliberations, the SI has
emphasized the concept of national and individual eco-
nomic rights as an extension of political and human
rights.
The support of liberation groups has recently been
a source of tension within the Socialist International
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European Socialist Leaders
Mario Soares (Portugal), Anker Jorgensen (Denmark), Willy Brandt (West Germany)
and is likely to figure prominently in discussions at the
For some Socialist Party leaders the congress will
primarily be a chance to be seen rubbing elbows with
other Socialist notables. Canadian New Democratic leader
Ed Broadbent is looking forward to participating in the
opening ceremonies with Brandt to provide useful exposure
in advance of the Canadian general elections which Prime
Minister Trudeau says may take place next spring. In
the case of Italian Socialist leader Craxi, ties to the
International have been emphasized not only as a means
to increase his party's prestige in Italy, but also to
underline its differences with the Communist Party.
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Other Socialist leaders--often with Brandt as their
spokesman--seem to look beyond immediate political con-
siderations and to envision a future in which the Social-
ist International might exert greater influence. In
fact, the convening of an SI congress outside of Western
Europe for the first time is a reflection of the desire
of these leaders to increase the involvement of non-Euro-
pean parties. Despite such efforts, however, the Social-
ist International is still an organization in search of
a role. 25X1
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Secret
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