DETERIORATING ECONOMIC SITUATION/ FOREIGN EXCHANGE RESTRICTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R000600650004-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: February 27, 1999
• Sequence Number: 4
• Publication Date: June 10, 1953
• Content Type: REPORT

Approved For Release 199W49/1O : CIA-RDP83-00423R000600650004-0
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1XTELL A4 it
SUBJECT: Deteriorating Economic Situation/ Foreign-
Exchange Restrictions
PLACE ACQUIRED:
(By Source)
DATE ACQUIRED.
(By Source)
DATE OF INFO End Apr 53
25X1A6a
25X1A2g
DATE: 10 June 1953
Supplement to:
Responsive to:
contains information affecting the national defense of the United
States, with n itle 18, Sections 793 and 794, of the U.S. Code,
as amended. Its tr ri.smission or its contents to or receipt by an
unauthorized person is prohibited by law, The repr report is
prohibited. 25X1A2g
This UNEVALtJTATED INFORMATION is su or the possible interest of your analysts,
It does not warrant dissemination b eport, 25X1X6
1. While the political picture seems to be stable and has not undergone any changes
worthwhile mentioning curing the last few years, the economic situation of this
country has followed a downward tendency which seems to have aggravated during
the last ten months. Strangely enough this tendency has started with the end of
the reparation payments to Russia, when the industries specially created for that
purpose had. to slow down production or stop it entirely, The Finnish Government
tried to overcome the increasing menace of unemployment by large investments for
public welfare (schools, hospitals, roadbuilding etc.) but it has only partially
25X1X succeeded. All Finnish products for exports are far too high priced and not
competitive due, to exaggerated wages for labor.
2. Last yearts heavy devaluation was designed to overcome the price difficulties,
but its effects have not lasted longer than a few months. At present the
Government is planning drastic steps to master the situation and there are rumors
of an imposed price-cut of about 20%. However, the socialists refuse to out the
wages at the same time. There is also some talk about a new devaluation, although
the last one was not an encouraging experiment.
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3. At the Bank of Finland no foreign currencies whatever are available
at present+ with the only exception of Russian Rubles. If we could use them as
payment, the Bank would have no objection to the granting of import licenses for
our products. They would be compelled to oppose applications in any other cur-
rency. This situation can of course change any time, but for the moment hopes in
this direction seem rather remote.
4. On the other hand the Bank of Finland has created some time ago an export dollar
account, from which dollars are available for essential imports at a premium of
about 30%. If we thought we could use them for imports of our tools, the Bank
would not raise any objection, but it was up to the licensing authorities to decide
whether tools could be imported for such dollars or not. Thesa- dollars are created
through exports at a substantial loss 20 to 40 % according to necessity) to the
dollar zone. The Bank pays the loss on such exports and sells these dollars at
cost for imports.
RETURN TO CIA Eli ,... .,j ou orma a~ asg (FoEe y (gig {
LIBRARY yo 4r i , not arrant by parL
for the use within the USA of CIA an a IntelligencesPonents of
State, Army, Navy, A r t to be transmitted overseas without the
concurren5Ap i" &CP 'IMI s@fIh 0o0H0o000 Ia
of Collection and Dissemination, CIA.
 - , Approved For Release 1999/09/10 : CIA-RDP83-00423R000600650004-0
5.
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He explained that the Finnish factories produced now sufficient tools of the
most current types for the needs of this market and that the present economic
situation in Finland does not permit them to issue any licenses in any currency
for any country for such tools. For the purchase of special tools, not pro-
duced here, there is a modest amount reserved in both the Swedish and British
trade agreements with Fir d and any needs have to be covered from these sources.
An occasional exception is made for precision tools from Switzerland or Germany
through compensation deals.
25X1A2g
SP,ciUUridM%6on
Approved For Release 1999/09/10 : CIA-RDP83-00423R000600650004-0
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