NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030200010071-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: June 16, 2005
• Sequence Number: 71
• Publication Date: July 14, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday July 14, 1977 CG NIDC 77-162C
.A-
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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National Intelligence Dail Cable for Thursday, July 14, 1977.
T e NID Cable is tor e purpose
senior US ofticials.
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SPAIN: New Government Program
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PERU: Economic Team Resigns
YUGOSLAVIA-USSR: Admiral Mamula
CZECHOSLOVAKIA: Dissident Activity
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SPAIN: New Government Program
I I Spanish Prime Minister Adolfo Suarez outlined on Mon-
day a government program that pre-empts leftist positions on
most of the significant issues facing Spain today. The new gov-
ernment's clear commitment to dialog and the opposition's ap-
parent intention to react responsibly augur well for the im-
mediate future. Labor is likely to be the major stumbling block;
even if the opposition parties are won over, they may be hard
put to convince the workers to accept the austerity measures
that are a key part of the package.
I I Suarez has again stressed his willingness to negotiate
with all representative parties. Even before announcing the
broad outline of his new government's program on Monday, he
consulted with Socialist leader Felipe Gonzalez. On Tuesday, he
met with Santiago Carrillo and other leaders of the Communist
Party.
I IFelipe Gonzalez told reporters that the new program,
including the currency devaluation of 20 percent, was accept-
able. Pointing out that many of the government's proposals coin-
cided with Socialist demands, he observed wryly that in fact,
"some points sound like what we said during the election cam-
paign."
I ICarrillo praised Suarez for involving the opposition
in the process of determining policy and said his party would
definitely be able to support some of the measures outlined. He
added that Suarez had seemed receptive to some of his own sug-
gestions for social reforms and long-range economic planning.
In addition to the important economic proposals,
Suarez' program coopts the left on a series of pressing polit-
ical issues. The government announced its intention to:
--Submit as quickly as possible a draft constitution and
consult fully on its details with all parties represented
in parliament.
--Open the door, pending revision of the constitution, to
a measure of autonomy for all regions, devolving as much
power as possible under current law to the provincial coun-
cils.
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--Begin administrative decentralization and democratization
immediately.
--Hold municipal elections before the end of the year.
I IThe government also indicated that it would apply
soon for 1-ull Spanish membership in the EC--a move that enjoys
popular support--and that it favors a debate in parliament on
the merits of joining NATO. The left opposes membership in NATO
but has stated that it would accept a democratic decision by
parliament.
I Criticism of Suarez' program has centered primarily
on its vagueness, particularly in such crucial, areas as wage
and price controls--an area presumably left open for negotiation
with the opposition. Wage restraint is a highly sensitive issue
and its resolution may determine the success or failure of the
economic program.
I I In an effort to obtain a commitment: from labor to hold
own wage demands, Suarez will probably hold out to the unions
various benefits hinted at in his program out:l.ine--higher unem-
ployment compensation, measures to reduce unemployment, and re-
form of the social security service.
Labor will need considerable inducement to accept
restraints on the annual wage hikes--often in excess of 25
percent--that have become customary as successive governments
have sought to deal with labor unrest by buying off the work-
ers.
The three major unions--the Socialist General Union
of Workers, the Communist-dominated Workers Commissions, and
the socialist-oriented Workers Syndical Union--earlier this
month rejected the possibility of a formal "social pact" with
the government, although they left open the possibility of ne-
gotiating more limited agreements. The unions are leery of a
pact in part because they lack the discipline to make it stick.
I lUnion membership appears to be increasing rapidly,
but . probably not much more than 5 percent of the 13 million
workers are now organized. In the wake of their recent legaliz-
ation, the major unions are now competing fiercely for member-
ship, and are concerned that open cooperation with the govern-
ment will make them less attractive to many workers than the
more radical organizations that advocate labor militancy.
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PERU: Economic Team Resigns
//The Peruvian government probably will relax its
new economic austerity program, which has provoked violent pro-
tests and the resignations of several top economic policy-
makers. A move to ease the austerity measures may jeopardize
negotiations for a badly needed loan from the International
Monetary Fund to finance Peru's current-account deficit and
debt repayment obligations this year. The president of the
central bank was among those to resign early this week because
of strong opposition among key cabinet ministers to the pro-
gram; Zast week the finance minister resigned for the same
reason. //
I I The austerity program, which was implemented last
mon , was designed to comply with IMF loan conditions. The
$50-million to $100-million IMF loan is also a prerequisite
for $300 million in loans from foreign banks.
The austerity measures have triggered violent pro-
tests among students and workers that have resulted in at
least five deaths, scores of injured, and hundreds of arrests.
I I Several cabinet ministers--led by Minister of Indus-
try an Tourism General Ibanez O'Brien--believe that the aus-
terity program has reached the limit of public: tolerance. They
also view IMF loan conditions as an infringement on Peru's eco-
nomic sovereignty.
The new minister of economy and finance, General
Alcibiades Saenz, has promised to announce modifications in
the austerity program within 10 days. Saenz probably will re-
lax restrictions on public expenditures, increase the growth
of the money supply, and discontinue periodic currency devalua-
tions. To appease students and workers, Saenz may also rein-
troduce limited food subsidies and perhaps call for a partial
rollback in petroleum and transportation prices.
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//The new economic team almost surely will press
for much easier conditions from the IMF, citing the recent vio-
lence as evidence of the unacceptable social costs of current
IMF demands. If the Peruvians fail to negotiate the IMF loan
agreement, they will receive no balance-of-payments loans from
private foreign banks.//
//If Lima is to maintain its stated policy of
avoiding default on any portion of its $900-million debt ser-
vice obligations due this year, it will have to slash imports
by as much as 25 percent below the depressed 1976 level. Import
cuts and increased public spending would likely double infla-
tion to over 100 percent, and create additional problems for the
new team and perhaps another round of public protest.//
The USSR's desire to obtain additional access to Yu-
goslav ship repair facilities will probably be raised with Yu-
goslav Admiral MamuZa, assistant federal secretary of national
defense for naval affairs, who is visiting the Soviet Union
this week. The visit reciprocates one made by Fleet Admiral
Gorshkov, commander in chief of the Soviet navy, to Yugoslavia
last August.
The Soviets reportedly sought additional repair and
maintenance facilities for ships of their Mediterranean squad-
ron during official visits to Yugoslavia last year by party
leader Brezhnev and Admiral Gorshkov. Although the Yugoslavs
apparently resisted those pressures for increased Soviet ac-
cess to Yugoslav ports, the Soviets have probably not given up.
I I Other naval matters Admiral Mamula is likely to dis-
cuss wit the Soviets include requests for assistance to the
Yugoslav submarine construction program and missiles for a new
Yugoslav patrol boat.
CZECHOSLOVAKIA: Dissident Activity
Czechoslovak dissidents have issued another document
sharply critical of the Czechoslovak government, but their
cause has clearly Zost much of the momentum it had early in
the year.
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I The latest Charter 77 release--the twelfth in a
series o documents issued since the dissidents' general man-
ifesto on human rights was issued in early January--describes
cultural and literary censorship in Czechoslovakia. According
to the dissident study, the authorities since 1968 have banned
350 to 400 writers from publishing. As a consequence, member-
ship in the official writers union has fallen by more than 50
percent.
I Earlier dissident releases provided documentation on
how the government engages in a wide range of politically in-
spired economic and social discrimination.
I IThe Charter 77 dissidents have tried to use periodic
press re eases to maintain pressure on the regime and to keep
their cause in the public eye. These activities, however, have
not expanded significantly the group's support beyond the in-
tellectual circles in Prague where it originated. Many of the
dissidents have been silenced by persistent official harass-
ment and a variety of economic and social pressures.
For the moment, the focus of Charter 77 activity ap-
pears to have shifted to Western Europe. In mid-June, one of
the most prominent Czechoslovak dissidents, former party sec-
retary Zdenek Mlynar, took up exile in Austria with his wife
and child.
Since his arrival in Austria, Mlynar has carried the
Charter 77 standard in Western Europe by helping to launch a
White Paper on Czechoslovakia, reportedly to be sent to all
participants in the 1975 Helsinki conference. Mlynar also met
of the Husak regime, they are good Communists.
recently with Italian Communist leaders to help bolster the
Czechoslovak dissidents' claim that, despite their criticism
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