NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010028-7
• Release Decision: RIPPUB
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• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: August 5, 2005
• Sequence Number: 28
• Publication Date: August 17, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Tuesday August 17, 1976 CI NIDC 76-193C
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National Intell' Daily Cable for Tuesday, August 17, 1976.
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The NID Cable is for the purpose o informing
senior US officials.
CONTENTS
GREECE-TURKEY: Aegean
LEBANON: Situation Report
Page 1
Page 1
Page 4
FRANCE: Socialist Defense Policy
MALTA: Elections Next Month
WEST EUROPEAN DROUGHT: Sizable Crop Losses
DENMARK: Parliament in Emergency Session
THAILAND: Praphat
CHINA: Representation Issue in Intelsat
JAPAN: Yen Rises
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GREECE-TURKEY: Aegean
Turkish Prime Minister Demirel announced
yesterday that the research ship Sismik I will begin surve in
in a third re ion of the Aegean on Thursday.
either Demirel nor Energy Minister Kilic
has yet disclosed the ship's itinerary, but the government has
committed itself to do so 48 hours before the ship's departure
The International Court of Justice met yesterday in
closed session to consider Greece's unilateral appeal. The Court
is likely to take several weeks before ruling on the Greek re-
.quest for interim measures and several months to decide on the
substance of the dispute. The UN Security Council will resum
its debate on the issue today.
LEBANON: Situation Report
Arab negotiators have renewed attempts to reinvigorate
the Syrian-Palestinian accord on Lebanon signed in late July.
There appears to be no coordination, however, among the several
Arab efforts to restart negotiations. At the same time, Chris-
tian forces have stepped up their offensive against Palestinian
positions in the mountains east of Beirut.
A Palestinian delegation talked with Syrian officials
over e weekend about the Syrian-Palestinian agreement, with
no apparent result. The accord and its accompanying cease-fire,
which were to have gone into effect early this month, have never
been implemented because of disagreements over the composition
of a quadripartite truce committee and Christian reluctance to
stop fighting.
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The commander of the Arab League security force met
yesterday with Christian leaders and with Palestine Liberation
Organization chairman Yasir Arafat in an apparent attempt to
give the impression of diplomatic movement in the wake of
League negotiator Hasan Sabri al-Khuli's return to Cairo.
I I Al-Khuli arrived yesterday, ostensibly for consulta-
tions wi h League officials who insist that he has not given up
his mediation mission. He is known, however, to have been dis-
heartened and may be reluctant to go back to Lebanon.
The Christians reported "fierce" fighting around
Aynturah and Mutayn in the mountains, and a Christian radio
broadcast predicted that forcible "liberation of the mountain
area" is imminent unless Palestinian forces agree to withdraw
peaceably.
Other Christian broadcasts announced yesterday that
Syrian forces had captured the town of Hammana on a key road
junction just north of the Beirut-Damascus highway. The Pales-
tinians have denied losing the town. We have no other indications
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of Syrian participation in the fighting in this area. Capture 25X1
of the town would cut off su pl routes to Palestinian positions
in Aynturah and Mutayn.
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I Moscow has reportedly agreed to provide additional
military aid to Namibia's South-West Africa People's Organiza-
tion.
A delegation of organization members, led by presi-
portedly with Defense Minister Ustinov in Moscow last week. The
visit was sponsored by the Soviet Afro-Asian Solidarity Commit-
dent Nu3oma, met with Soviet party secretary Ponomarev and re-
tee. the main pur-
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pose o e visit--pernaps a reason it t
publicity--was to ask for additional arms.
the Soviets granted the request.
The arms talks may have been timed to coincide with
non-white delegates to the conference want to invite represen-
a constitutional conference now being held in Namibia. Some
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 Moscow may reason that additional military support at
this time would ensure that SWAPO would reject any overture to
participate in the conference, which the Soviets view as a South
African attempt to forestall Namibian aspirations for indepen-
dence.
tatives of SWAPO to participate, and the press has suggested
that South African Prime Minister Vorster might. back such a
move.
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The Soviets, by increasing their military support,
may also be attempting to weaken Nujoma's dependence on Chinese
arms. Using their success in Angola as evidence, the Soviets 25X1
may be counseling Nujoma to put himself squarely on Moscow's
track in order to ensure maximum Soviet sup ort for his efforts
to expand guerrilla operations in Namibia.
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FRANCE: Socialist Defense Policy
//The French Socialists will probably press for
a moderate line on defense issues--not much different from that
of the present government--when they meet with the Communists
and left Radicals next month to revise their "common program
for governing."//
//Socialist party leader Francois Mitterrand
wants to commit the left to such a line to reassure French
voters and the US that the left alliance would not be a threat
to French and West European security if it comes to power in
the next parliamentary election in 1978.//
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//The Socialists are divided on defense policy,
but Mitterran is strong enough to impose his views on the party
factions. The left Radicals apparently also will support him.//
//Mitterrand's proposals include:
--Retention of the program's plank supporting conscription
for six months service instead of a year.
--Opposition to any French commitment of forces to the
"forward battle area."
--Rejection of any moves to station France's Pluton tacti-
cal nuclear missiles in West Germany or to reintegrate
formally French forces into NATO.
--Retention of the call for immediate signature of the nu-
clear test ban and nonproliferation agreements and for join-
ing the Vienna disarmament talks--the only points on which
Mitterrand's proposals contradict present government pol-
icy.//
//Mitterrand and his advisers anticipate few
problems with the Communists on these proposals. The Communists
are likely to oppose strongly other provisions of the defense
plank, which call for:
--Maintaining at least the current level of defense spend-
ing "unless world conditions change."
--Continued improvement of France's strategic nuclear
forces until a "major East-West disarmament agreement" is
reached. This is directly opposite to the common program's
current position.
--Support for increased military cooperation with other
West European countries, including greater standardization
of armaments and tactical coordination with NATO.//
//The Communists proposed last June that the left
e ine more clearly its stand on France's relationship to the
Atlantic alliance. They interpreted statements at that time by
President Giscard and the French Chief of Staff as moving France
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closer to NATO, and they noted efforts by NATO members to dis-
courage Communist participation in West European governments.
The Communist spokesman assured his leftist allies, however,
that his party would not demand that the program call for total
withdrawal from NATO.//
//The Communists are committed to opposing any
renc strategy that emphasizes the Soviet threat--as they be-
lieve the recent government statements do--but at the same time
the Soviet arms build-up has become one of the party's principal
concerns.//
I In a major policy speech before the party's central
committee in June, Communist foreign policy expert Jean Kanapa
said any future leftist government in France should:
--Be ready to renegotiate the terms of France's relation-
ship with NATO.
--Propose a nonaggression agreement with the Warsaw Pact
nations and join the US-USSR accord on the prevention of
nuclear war.
--Practice "total independence" from East and West and
guarantee France's security with an "authentically na-
tional" defense policy.
//While Mitterrand has been sharply critical of
President Giscard on some security issues, the similarity of
some of his proposals to Giscard's policy will generate addi-
tional speculation that the two men are signaling that they will
be able to work together if the left wins in 1978. Giscard's
policies also agree with Mitterrand's on other issues, such as
European unity, on which the Communists and Gaullists have also
found some common ground in opposition.//
//The government's presentation of the 1977
mi i ary u ge to the Assembly in October will provide another
forum for exposing any new approaches by the major parties.//
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The dissolution of Malta's Parliament last Friday pre-
pares e way for a new legislative election on September 17 and
18. The approximately 220,000 voters--including for the first
time 18- to 21-year-olds--will select the 65 members of the new
legislature. The previous one had 55 members.
The campaign will probably turn into a referendum on
Prime Minister Dom Mintoff's nonaligned foreign policy. The eco-
nomic impact of the withdrawal of British forces--to be com-
pleted by March 31, 1979--is also likely to be a key issue.
The election will be determined in large part by
Mintoff's success in convincing the voters that his widespread
contacts with world leaders and his diplomatic posturing can
secure the international commitments needed to keep Malta afloat
economically.
I Recognizing this, Mintoff has been engaged in an al-
most Frantic effort to extract West European guarantees of
Malta's neutrality and assurances of economic assistance. He has
had little encouragement from West European leaders, who are ir-
ritated by his non-stop appeals for economic aid and concerned
by his carefully cultivated ties to Libya.
Whichever party wins the election, Malta must seek
outside help. //The opposition Nationalists have indicated that
if they win, they will restore Malta's pro-Western orientation
and allow at least a token NATO presence on the island in ex-
change for economic aid.// 25X1
WEST EUROPEAN DROUGHT: Sizable Crop Losses
The continuing drought in Western Europe has led to
sizable crop losses and threatens to close some industrial
plants.
We now estimate West European grain production in the
1976-1977 marketing year at 124 million tons, down 5 percent
from last year's meager harvest. Total EC grain production is
estimated at just over 92 million tons, 5 million tons below
last year.
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I I Recent rains and more moderate temperatures have
brought relief to some northern areas, but no real shift :has
occurred in the weather pattern prevailing since March. The US
National Oceanographic and Atmospheric Administration forecasts
below-normal rainfall during August for most of northern Europe
and southern UK.
Because of the additional loss of grain and forage
crops, we now project 1976-1977 West European net imports of
grain at a record 32 million tons, 12 million tons more than
net imports in 1975-1976.
I I The EC, which accounts for the bulk of the increase,
wi. suffer an estimated $1.7-billion net foreign exchange loss.
Reduced EC feed grain exports to third countries will slash
earnings by more than $650 million. Total EC imports of grain
in 1976-1977, now estimated at 27.6 million tons, will cost at
least $1 billion more than the predrought estimate.
I I Forage crop and pasturage losses have been even more
serious than those of grain. Losses of 25 to 50 percent of the
first hay cutting have been reported in some areas. Short for-
age supplies have already boosted grain feeding requirements,
which will continue to increase during the fall and winter
months if rainfall remains below normal.
Forage crop shortages and the high cost of feeding
grain concentrates have increased cattle slaughtering as pro-
ducers cull their herds. An authoritative West German publica-
tion projects total EC cattle slaughter in 1976-1977 at 20.6
million head, up 2 percent from 1975-1976.
I Much depends on continued rainfall, needed to boost
late cuttings of hay and fall pastures. Since producers will
make every effort to maintain herds, the crucial decision pe-
riod on marketings will occur in late fall when winter feeding
capabilities are better defined.
So far, major Community efforts to offset the impact
o the drought on agricultural production and farm income have
been limited to maintaining beef prices in the face of increased
slaughtering and lowering restrictions on grain imports from
third countries. Because EC storehouses are already bursting,
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the ceiling for subsidized private stockpiling of beef also has
been increased. Restrictions on imports of potatoes and feed
grains, principally corn, have been eased.
I I At the national level, drought-related increases in
the cos of living probably will range between 1 and 3 percent.
Some fruit and vegetable prices already have risen substantially
in local markets, but the increases are not large or widespread
enough to affect the overall cost of living markedly. Prices of
bread and cereals, sugar, and beef are less likely to increase
substantially because markets are strictly regulated by the
Community.
I I Higher food prices will add to already high rates of
in a ion. In only three West European countries--West Germany,
the Netherlands, and Switzerland--is inflation running below
10 percent.
I I If world market prices for grains remain below the
EC's minimum import price--as we expect--the Community can keep
the lid on domestic grain prices by permitting more imports.
Beef prices are low now because of excess slaughtering. Beef
stockpiles are large, and prices may not increase much even in
the face of increased production costs and reduced output later
in the year.
Industrial activity has been affected primarily by
reduced river levels. Hydroelectric output is down appreciably
in France, Italy, Spain, and Portugal. Industries that rely on
river water for cooling, such as steel plants and thermal elec-
tric stations, have had to cut production. Western Europe's ex-
tensive inland water transport system has been disrupted as
well.
I I If dry weather persists, as expected, some industrial
p ants may have to shut down or not fully reopen after the tra-
ditional August vacation. In Britain, for example, a number of
chemical companies in South Wales may face a 50-percent reduc-
tion in water supplies starting in September.
I An additional fall in river levels could completely
stop barge traffic on some inland waterways and force further
interruptions in electricity supplies. 25X1
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DENMARK: Parliament in Emergency Session
Prime Minister Anker Jorgensen has called an emer-
gency session of Parliament today to consider proposals to deal
with Denmark's mounting economic problems. The governing Social
Democrats lack a majority, and Jorgensen reportedly plans to
call an early election if his proposals are turned down.
1 //The principal elements of the government's pack-
age
ures to reduce spending and to limit wage increases
to 6 percent. In addition to providing some tax relief and a
profit-sharing scheme for workers, the legislation includes such
controversial provisions as early retirements and limits on
overtime pay. The Social Democrats also may propose a surcharge
of as much as 20 percent on cigarettes, alcoholic beverages,
coffee, sugar, and gasoline in hopes of reducing Denmark's
sizable balance-of-payments deficit.//
So far, Jorgensen can count on support from only
three small parties among the 11 represented in Parliament. The
government's main opposition comes from the Liberal Party of
former prime minister Hartling. The Liberal Party--the second
largest--objects mainly to the concessions to labor, particu-
larly the profit-sharing scheme.
//Economics Minister Haekkerup has predicted that,
it Parliament fails to reach a compromise on the economic pack-
age and an early election is called, Denmark is likely to face
a monetary crisis similar to the one it experienced last spring.
The government, however, probably has sufficient foreign ex-
change reserves to avoid a major devaluation of the krone. Even
so, the Liberals might not want to take responsibility for
forcing an election if this would risk further delays in eco-
nomic recovery.// 25X1
THAILAND: Praphat
The Thai government stated today that there is "no
substantial evidence" that deposed deputy prime minister Pra-
phat returned to Thailand from exile on Sunday. The statement
followed an emergency cabinet meeting called to discuss the
situation; it flatly contradicts Prime Minister Seni's state-
ment yesterday confirming reports of Praphat's arrival.
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//The government is concerned that Praphat's un-
authorized return could set off student protests. The former
military ruler was considered excessively corrupt 25X6
and was the focus of a student uprising in I~J/j which
brought down then-prime minister Thanom's military regime.//
I I Praphat's return could reunite the now fragmented
s-u en movement. Student groups have been meeting since Seni's
announcement yesterday. According to press reports, a student
demonstration is scheduled to take place today.
//Government officials are worried about the pos-
sibility of support for Praphat within the military, which has
shown increasing impatience with what it views as an ineffective
civilian government.//
CHINA: Representation Issue in Intelsat
China again will attempt to challenge Taipei's Intel-
sat me ership at the organization's meeting next month in
Nairobi.
At the last meeting in February 1974, the issue was
never brought to a vote because of a procedural error. This
time, Peking will probably be able to muster enough third-world
support to oust Taiwan.
I While Peking almost certainly will replace Taiwan as
an n e at member, it is not yet clear whether the Chinese
will allow Taiwan to continue as a nonmember user.
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I Since 1971, when Peking replaced Taipei in the UN
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the Chinese have gradually ousted the Nationalists from a num-
ber of international organizations. Peking has not, however,
appeared anxious to undermine Taipei's domestic econo or its
foreign trade. F 7 7 7
The Japanese yen closed at 290 to the dollar in
Tokyo yesterday, up sharply from 292.35 on Friday. The tightly
controlled yen has risen over 2.5 percent since July 1, and
nearly 5 percent since the beginning of the year.
Demand for yen built last
exchange mar : traders looked for currencies likely
to appreciate in the wake of an anticipated realignment of the
joint European float. Bank of Japan intervention yesterday was
estimated at over $10 million.//
//The yen's rise over the last two months is gen-
era. y attributed to Japan's large trade surplus so far this
year. Even though the surplus is expected to decrease during
the second half of 1976, we estimate Japan will have a trade
surplus of nearly 8 billion this year, ccompared to $5 billion
in 1975.//
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