CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025100090001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: October 29, 2003
• Sequence Number: 1
• Publication Date: August 25, 1973
• Content Type: REPORT

Approved For Release 2003/11/04: CIA-RDP79T00975AO25100090001-3
Top Secret
Central Intelligence Bulletin
Top Secret
C 2C4
25 August 1973
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25 August 1973
Central Intelligence Bulletin
CONTENTS
ARGENTINA: Prospects for divisive political strug-
gle are growing. (Page 1)
CHILE: Contending political forces still digesting
Prats' resignation. (Page 3)
WEST GERMANY: Trade surplus up sharply this year.
Page 4)
CYPRUS: Makarios intensifies drive against General
Grivas. (Page 5)
INTERNATIONAL MONETARY DEVELOPMENTS: Dollar down
marginally. (Page 6)
YUGOSLAVIA: Major political clash expected at Ser-
bian party congress next month. (Page 8)
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ARGENTINA: The country is moving into an elec-
toral campaign that could further fragment its fragile
sense of community. It has already lost its best
chance for political stability in years--a national
unity slate backed by the military.
Beyond Peron's rejection of a national unity
slate, the major source of disappointment and con-
cern is Isabel Peron's nomination for the vice presi-
dency. While there is hope that General Peron has
a "master plan" and that a suitable succession even-
tually will be revealed, there are increasing rumors
that Isabel and Lopez Rega, Peron's ambitious private
secretary, are manipulating the aged leader. The
Peronist youth and leftists in general are particu-
larly critical of the former dictator's "reactionary"
inner circle. The opposition will try to exploit
this sensitive issue, which already is threatening
the unity of the diverse Peronist movement.
The campaign for next month's elections is
likely to end the tenuous spirit of conciliation
that followed Peron's return. Radical Party leaders,
angry at his apparent duplicity, are launching a
tough, partisan race. While they have no chance of
winning, the Radicals and the other major opponent,
Francisco Manrique, may succeed in humiliating Peron
by pulling his vote below the 49 percent received by
his surrogate, Campora, in the March elections. Some
army officers believe that Peron will be forced into
a run-off.
Peron's initial favorable response to a joint
ticket with his long-time Radical opponents won wide-
spread acclaim and was hailed as the first step to-
ward ending the long cycle of political and economic
crises. After stringing the Radicals along for weeks,
Peron abandoned the plan, perhaps in part because
Radical leader Balbin wanted more out of the deal
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than Peron was willing to concede. Under the pres-
sure of electoral deadlines, Isabel Peron was put
on the ticket in what ostensibly was a temporary
expedient. With the campaign now under way, how-
ever, hope is fading that she will be replaced.
Many suspect that Peron is back to his old tricks
and that the national unity theme was a smoke screen.
Nevertheless, Peron probably will receive a
comfortable majority in the elections on 23 Septem-
ber. Most still entertain hopes that the "master
manipulator" can still pull the country together.
One military leader summed up the attitude of many
toward Peron when he said "he is all we have so we
must make the best of it."
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Central Intelligence Bulletin 2
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C CHILE: Contending political forces are still
digest ni g General Prats' resignation. Two other
pro-government army generals also have resigned, and
the situation remains tense.
There was more violence in Santiago's streets
yesterday, when anti-government secondary-school
students staged a protest march. President Allende
and the Christian Democrats sharpened their verbal
duel over a controversial congressional resolution
on respect for legal processes. A cabinet shake-up
may be in the offing for Monday, when a new defense
minister is slated to be named. There are conflict-
ing,reports on the status of Admiral Montero, the
navy commander and the last remaining service chief
in the cabinet.
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Now that some powerful constraining influences
in the army have resigned, discontent undoubtedly
will be manifested more openly. Increased contact
between army dissidents and their like-minded navy
and air force colleagues should help overcome inter
service suspicions, but the formulation of new joint
political demands on the President seems likely to
precede settling on a plan for an outright coup.
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WEST GERMANY: A record trade surplus for July
boosts the cumulative surplus for this year to $6.8
billion, an increase of almost 60 percent over the
same period last year.
The $1.3-billion surplus in July reflects con-
tinued strong export performance. Exports will
probably continue to rise through the rest of this
year because of the high level of orders booked by
West German industry since last summer. The sur-
plus was fueled by sluggish import growth, caused
largely by importers not buying foreign goods in
anticipation of this June's mark revaluation. Im-
ports should pick up, however, in the next few
months. The government's anti-inflation program
is not.likely to dampen demand for imported goods
until some time next year. The trade surplus in
1973 will probably total nearly $11 billion--anincrease of more than 20 percent over last year's
surplus.
Although the substantial appreciation of the
mark against other currencies since the beginning
of this year has not yet begun to affect the volume
of West German trade, it is squeezing the profit
margins of German exporters and will reduce their
competitive position in world markets.
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CYPRUS: Unrest continues in the Greek Cypriot
community, although violence declined somewhat this
week. Meanwhile, the intercommunal talks with the
minority Turkish Cypriots remain deadlocked.
General Grivas' organization, locked in a power
struggle with President Makarios, now has extended
its bombings of selected targets on the island to
property belonging to Communists. This could trig-
ger retaliation by the Communists or by other left-
ist supporters of President Makarios.
Grivas continues to hold the kidnaped justice
minister, but a newspaper sympathetic to Grivas is
playing up the decrease in activity by Grivas' sup-
porters as a "truce" offer in order to allow Makarios
time to accede to Grivas' demand to give up the pres-
idency. Makarios, of course, has no intention of
doing this and is determined to end the threat from
Grivas by the end of this year; he continues to ar-
rest Grivas' leading assistants and appears to have
plans to arrest the General himself eventually.
Athens generally has been reluctant to enter
the dispute openly. Yesterday, however, President
Papadopoulos publicly urged the terrorist leader to
end his campaign, perhaps believing, like Makarios,
that Grivas is on the run. Grivas does appear to
have lost some ground in his struggle, but his forces
probably are only crippled, not crushed, and more
violence is likely.
The persistent dissension among the Greek
Cypriots overshadows the intercommunal discussions.
Turkish and Greek experts have been participating
in the discussions since earlier this year, and
both sides describe their sessions so far as fruit-
less. The rival communities blame each other for
the deadlock. The talks will proceed at least
through September, but progress, particularly on the
key question of autonomy for the Turkish Cypriot
community, is doubtful.
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Changes in the Dollar Value of Foreign Currencies
Since 19 March
(in percent)
24 August 17 August 27 July 11 July 6 July
Mark
+14.7
+14.2
+23.1
+17.6
+25.1
French franc
+ 5.0
+ 5.0
+12.5
+11.6
+19.9
Sterling
- 0.2
0.0
+ 1.9
+ 3.6
+ 3.9
Yen
- 0.1
- 0.1
- 0.2
+ 0.2
+ 1.1
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INTERNATIONAL MONETARY DEVELOPMENTS: The dol-
lar lost only slight ground against European cur-
rencies yesterday despite the announcement of a
record West German trade surplus and the release of
US trade data showing a smaller surplus than dealers
had anticipated. In previous months, unfavorable
trade announcements have caused the dollar to plum-
met in value. Rising US interest rates and a general
feeling that the dollar had been undervalued in the
last selling spree have helped keep the dollar well
above the lows reached in early July. The dollar-
de-
showed little change from the enO of last week
spite considerable fluctuation.
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YUGOSLAVIA: Conservatives and moderates in
Belgrade appear headed for a collision when the city
party meets early next. month. Demands for a thorough
purge of liberals could strain the cohesion of the
parent Serb party leadership.
The meeting in the most important local ap-
paratus in the republic was called to evaluate im-
plementation of Tito's standing order that the party
root out all forms of liberalism. The proceedings
will implicitly reflect on Serb party boss Viaskalic,
who was selected by Tito last fall when more prominent
Serbs declined the leadership post.
A moderate, Vlaskalic has steadfastly opposed
witch-hunts throughout the republic, but conservative
critics within the military and veterans groups in
Serbia's northern province of Vojvodina are pushing
for a more widespread purge. The national party
weekly, Kommunist, indicated on 20 August that vac-
illations in Belgrade harm the entire Serb party.
Local party leaders will have to take correc-
tive measures ranging from self-criticism to a purge
of errant party officials. Extreme conservatives,
however, will press for more sweeping dismissals
in order to discredit the moderates.
If the city leadership falters in handling the
meeting, the federal party may have to intervene.
The Vojvodina party organization is already in po-
litical turmoil that has strong overtones of Serb
nationalism. Kosovo, Serbia's other province, is
a potential powder keg of Albanian-Serb animosities,
and its Albanian leaders, who are also hold-overs
-
from the liberal era, are also vulnerable to con
servative purge demands.
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