UNREST IN ROMANIA: CAUSES AND IMPLICATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00228R000100070004-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 21, 2016
• Document Release Date: July 11, 2008
• Sequence Number: 4
• Publication Date: March 1, 1982
• Content Type: REPORT

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Directorate of Top Secret
Unrest in Romania:
Causes and Implications
An Intelligence Assessment
State Dept. review
completed
Top Secret
EUR 82-10016C
arc
270
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? a.a.wanac v~
Too Secret
Intelligence
Unrest in Romania:
Causes and Implications
An Intelligence Assessment
Iltformation available as oJ'4 March 1982
has been used in the preparation o.1'this report.
This assessment was prepared by~
East European Division,
ice o uropean Analysis. Comments and queries
are welcome and may be directed to the Chief. East
European Division, EURA
This paper was coordinated with the Office of Soviet
Analysis and with the Acting National Intelligence
~
Officer for USSR/EE.
Top Secret
EUR ~2-10026C
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Figure 1
Vienna S
Austria
Czechoslovakia
,Budapest
Hungary
Romania
BelgradeV
Yugoslavia
~ie~rean
Sea
roman
Sea
Greece
Sofia
?Bucharest
Bulgaria
Adrrarlc
Sea ?
o_~
Boundary representation ~s
not necessarily authoritative.
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Toa Secret
Unrest in Romania:
Causes and Implications
Key Judgments The maverick regime of President and Communist Party chief Nicolae
Ceausescu is being undermined by economic stagnation and growing
unrest. Ceausescu's inability to reverse these negative trends could erode
his power over time, although his long dominance of the Romanian
political scene does not appear threatened at present. In any event, as
Ceausescu becomes weaker at home, he will find it more difficult to
continue the strategies by which he has carved out a unique degree of
autonomy for Romania within the Warsaw Pact.
Ceausescu's internal policies, among the most dogmatic in Eastern Europe,
are the source of most of his troubles. His policies of rapid industrial
development-at the expense of the agricultural and. consumer sectors-
and tight control over all decisionmaking have imposed severe strains on
the economy in the last few years as energy, raw materials, skilled labor,
and foreign exchange have come into increasingly short supply. As living
conditions have deteriorated over the past 18 months, unrest-though
intermittent and lacking national organization-has intensified
dramatically.
Ceausescu shows no signs of altering the basic strategy he has followed for
nearly two decades, possibly because substantial deviation from it could
undermine his credibility among his subordinates and jeopardize his
authority. He has opted for a stopgap approach that has aimed at
containing unrest but left its economic causes unresolved. Living condi-
tions, therefore, will continue to deteriorate, threatening to spread unrest to
wider segments of the population.
Neither general upheaval nor the emergence of an organized opposition on
the scale of Solidarity in Poland seems to threaten Ceausescu at this time.
Rather, a gradual decline into increased social and economic turbulence
seems likely, which could in turn radicalize Romania's workers and
exacerbate latent discontent among ethnic minorities. The intertwining of
worker protests and minority unrest could be the ultimate undoing of the
Ceausescu regime.
Ceausescu's mounting domestic problems already are undercutting his
independent foreign policies. He would like to continue playing an active
role internationally, both to shore up his position at home and to gain
sympathy and help from the West and the Third World. But Ceausescu
also tries to accommodate the Soviets to gain more favorable economic
treatment, including increased access to Soviet energy and raw materials.
25X1
iii Top Secret
EUR 82-/0026C
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His courtship of oil-rich Arab states must be tempered if he is to retain the
"honest broker" role that has netted him so much publicity in the past.
Ceausescu will likely have little luck in reconciling these mutually
antagonistic goals, and his foreign policy will become increasingly erratic.
Ceausescu's inability to stem unrest could eventually raise the prospect of a
breakdown in party control and lead his followers to replace him, ushering
in a period of leadership instability and increased vulnerability to Soviet
pressure. Moscow would not pass up an opportunity to exploit the
weaknesses inherent in a divided, transitional leadership to restore Roma-
nia to a subservient position.
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Top Secret
Unrest in Romania:
Causes and Implications
The Key Issue: Romanian Independence
Romania's pursuit of an independent foreign policy
under President Ceausescu has caused difficulties for
the Soviets in the past. By resisting pressure for
further integration into the Warsaw Pact and the
Council for Mutual Economic Assistance (CEMA),
Bucharest has obstructed Moscow's efforts to expand
use of these organizations as instruments of control
not only over Romania but also over the other Soviet
client states in Eastern Europe. Moreover, the Roma-
nians have deprived the Soviets of unanimous support
within the Warsaw Pact on a number of important
international issues-such as the invasions of Af-
ghanistan and Kampuchea-and have collaborated on
occasion with the Yugoslavs, the Chinese, and the
Italian and Spanish Eurocommunists in opposing
Moscow's claim to leadership of the world Communist
movement. Bucharest has further annoyed the Soviets
by actively cultivating relations with the West and
identifying itself with nonaligned Third World coun-
tries.
Ceausescu has strong political incentives at home to
avoid compromising his independent principles. Any
betrayal of Romanian sovereignty would destroy a
major prop of his regime and undermine his standing
with the people and with other members of the
leadership. But Ceausescu has been careful to balance
anti-Soviet actions in one area with conciliatory be-
havior in another and to avoid actions that might
provoke the Soviets to retaliate.
Ceausescu has been buttressed in his independent
stance by his awareness that, short of an outright
military move, Moscow has only limited means to
bring pressure to bear. The Soviets have few assets
within the Romanian leadership who can press Mos-
cow's line. Over the years, Ceausescu has ruthlessly
removed most of the men who played significant roles
during the era of domination by Moscow.
Ceausescu apparently believes he has room to expand
economic ties with the USSR without risking his
independence. As Romania's economic problems have
worsened over the past 18 months, Bucharest has
made several appeals for assistance from Moscow and
its other CEMA partners. Prime Minister Verdet told
the last two CEMA Council'sessions that Romania
has become more willing to cooperate with the other
members. In addition, Romania's current five-year
plan projects a larger share of trade with its CEMA
allies. A desire for increased deliveries of raw materi-
als-especially energy-is behind Romania's over-
tures to the East. 25X1
Moscow, however, has repeatedly rebuffed Ceauses-
cu's requests for increased oil deliveries at preferential
terms, hinting only that more favorable economic
treatment might be forthcoming if Bucharest would
first demonstrate greater support of Soviet interests.
The Soviets, who are suffering resource shortages of
their own, seem to accord higher priority to defending
their own hard currency position and aiding Poland
than to "buying" more submissiveness from Bucha-
rest. While the economic support needed to prop up
the Ceausescu regime is small compared to total 25X1
Soviet resources, Moscow is acutely aware that its
means are stretched thin.
In addition, the Soviets have surprisingly limited
economic means to force the Romanians to be cooper-
ative. Moscow appears unable to wring greater loyalty
from the Romanians by threatening a cutoff of raw 25X1
material deliveries. Bucharest has diversified its
sources of key raw materials and now relies heavily on _
the USSR only for coking coal (some 33 percent of its
consumption) and iron ore (about 40 percent). Roma-
nia pays close to world prices for these materials, at
least partly in hard currency or hard goods (that is,
goods that could be sold for hard currency). Unlike its
CEMA partners, moreover, Romania satisfies only a
small portion of its oil needs (about 10 percent) from
the USSR, and for that it must pay world prices in
hard currency or hard goods.
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While a cutoff of raw material deliveries could cause
serious economic dislocations, the Romanians could
probably make up enough of the losses from suppliers
in the West and the Third World to get by. A trade
boycott by Moscow, moreover, if it led to greater
unrest in Romania, would appear to run counter to
the USSR's interest in maintaining stability on its
The Pattern of Unrest
Public unrest over deteriorating living conditions has
reached unprecedented levels and is undermining the
Ceausescu regime. Incidents in key industrial and
regional centers have so far remained sporadic, un-
coordinated, and containable, but they have grown in
scope, number, and intensity.
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Tou Secret
Unrest has hit Romania in three waves of increasing
severity over the past year and a half. The first, in the
summer of 1980, was limited to brief work stoppages
at a number of industrial centers and concerned local
economic grievances-food shortages and pay cuts for
nonfulfillment of unrealistically high production quo-
tas. The regime appeared to have little difficulty in
defusing these relatively minor disturbances.
The second wave, in the early months of 1981,
involved a broader range of participants and issues. In
addition to several industrial strikes, there were re-
ports
of student protests, anti-Ceausescu demonstrations,
and an attack on a provincial government office-all
provoked, in large part, by unhappiness with the
continuing food shortages.
o itica issidents tried to exploit the unrest by
distributing leaflets calling for a general strike and
demanding free trade unions for workers and farmers.
These efforts foundered, but regime officials were
concerned.
The latest disturbances, which took place last fall,
were marked by considerable violence. The most
serious incident, a strike by over 2,000 coal miners in
the city of Motru in the southwest part of the country,
was apparently triggered by the introduction of bread
rationing and antihoarding regulations. It mush-
roomed into a major protest involving street demon-
strations in several towns, the storming of a local
party headquarters, and, according to an Embassy
source, the killing of a local government official.
The regime was able to restore
order, but not so easily as in the past.
Figure 3. Bucharest shoppers queue up at fish market.
25X1
erasion o eausescu, his family, and his programs
Grumbling, open criticism, and even
countr s Baking tour last fall
Ceausescu encountered hostile crowds durin a cross-
Cause of Unrest 25X1
A faltering economy lies at the heart of current
unrest. The growth of national income has slowed in
the past two years to an average of 2.3 percent per
annum, the lowest rate since the 1950s, and prospects
are poor in the near term for a turnaround.
with prices for some staples rising even more.
The populace is bearing much of the burden of the 25X1
economic slowdown. Pressure for increased productiv-
ity; long work days in unsafe conditions; persistent
shortages of food, housing, and consumer durables;
and the lowest living standards in Eastern Europe
outside of Albania account for the Romanian workers'
traditionally low morale. But Bucharest has leaned 25X1
even more on consumers recently in hope of weather-
ing its economic crisis. In the past year, higher prices,
longer lines, new credit restrictions, and tax increases
have worsened the average Romanian's lot. As food 25X1
shortages grew more severe, the regime instituted
rationing for many items. In mid-February, food 25X1
prices were raised by an unprecedented 35 percent,
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25X1
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Figure 4
Romania: Selected Economic Indicatorsa, 1976=82
0 1976-78b 79 80 81 82` 0 1976-78b 79 80 81 82`
`t Based on official Romanian statistics.
b Average annual rate of growth.
c Planned.
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Top Secret
The regime argues, with some justification, that
Romania's economic problems are the result of fac-
tors over which it has had no control: OPEC pricing
policies, bad weather, high global interest rates, and
even an earthquake. For the most part, however, the
current economic situation can be blamed on Ceauses-
cu's personal mismanagement of the economy. Over
the past 17 years, Romania has focused on rapid
development of heavy industry, with emphasis on
steel, chemicals, machine building, and petroleum
refining. Over a third of national income has been
reinvested in the economy-the highest rate in East-
ern Europe-with half of all investment funds fun-
neled to industry. This development strategy produced
high economic growth until recently, but it has im-
posed severe strains on the economy.
The strategy assumed that Romania would be able to
pay for large purchases of Western equipment and for
imports of crude oil and other materials with profit-
able exports to the West of finished manufactured
goods, refined oil products, and petrochemicals. Ex-
ports have lagged, however, because of high domestic
costs, poor quality control, the economic slump in the
West, and developments in the oil market that severe-
ly limited the profitability of refining and petrochemi-
cal activities worldwide.
Energy. Domestic production of primary energy, espe-
cially crude oil, cannot satisfy Romania's growing
industrial requirements, including demand for the
feedstock needed to maintain exports of oil products
and petrochemicals. Crude oil production peaked in
1976 at 294,000 barrels per day (b/d) and then
declined to 230,000 b/d by yearend 1980. The slide
has stopped, but probably only temporarily as oil
reserves are rapidly being depleted. One high Roma-
nian official candidly admitted a couple of years ago
that established reserves would be exhausted in 10
years.
Crude oil production could pick up again if Romania
finds substantial amounts of oil in the Black Sea. Oil
has been found by Romania's one offshore drilling
platform and tests are under way to determine the
size of the find. But even if the reserves prove to be
large and commercially exploitable, it will take sever-
al years and some expensive Western technology to
bring the oil on line. In the meantime, Bucharest must
increase the crude oil recovery rate to stave off a
further decline in production, which also requires
costly Western help.
Growth in the production of other energy sources will
not compensate for the oil problem. Coal production
(mostly low quality brown coal and lignite) has grown
by about 8 percent per annum during the past four
years but still has fallen far short of overly optimistic
targets. Romania had originally hoped to reduce
natural gas output steadily over the next five years in
order to conserve reserves, but persistent shortfalls in
coal and oil output have forced a boost in gas
production. In any case, oil is essential for the refining
Domestic energy production difficulties have left Ro-
mania increasingly dependent on imports. A net ener-
gy exporter until 1973, Romania now relies on net
energy imports for one-fifth of primary energy con-
sumption. Oil accounts for most of the increase in
imports, with crude oil imports climbing to a record
319,000 b/d in 1980, triple the 1975 level. This sharp
increase is costly because Bucharest must pay for
most of its oil in hard currency at market prices,
whether it buys from OPEC or the Soviet Union.
Moreover, Romania is in the vulnerable position of
relying on the unstable regimes in Iran, Iraq, and
Libya for well over half of its crude oil imports.
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Labor. The recent large migration of workers from
agriculture to industry has intensified labor and social
problems. During the 1970s, the agricultural labor
force declined by 1.7 million-almost 17 percent of
the total labor force-and the share of labor employed
in agriculture fell from one-half to less than one-third.
Those workers remaining on the farms are aging,
poorly educated, and largely female; many are part-
Many of the former agricultural workers that now
make up a large part of the industrial labor force are
poorly educated and ill equipped to meet the demands
of work in a factory and life in an urban area. The
industrial sector complains of shortages of skilled
labor and poor worker discipline. For their part, the
workers are demoralized by serious shortages of hous-
ing and services in cities which cannot meet the
unprecedented increase in demand of the past decade.
Agriculture. Agriculture has become a key trouble
spot, with production of many foodstuffs no higher
now than in 1976. In fact, output peaked in 1979 and
then declined 6 percent over the next two years.
Romania-once considered one of the breadbaskets of
Europe-has become a net importer of food from the
West.
The poor agricultural performance is partly the result
of bad weather but is mostly due to Bucharest's
deliberate neglect of farming for the sake of industri-
alization. Investment has been meager, with agricul-,
ture's share of total investment below 15 percent for
most of the past decade. Mechanization has not
compensated for the loss of labor to industry, and
fertilizer use remains the lowest in Eastern Europe.
Large grain losses occur annually because of poor
irrigation, drainage, harvesting, transportation, and
storage.
Romania has yet to deal effectively with the various
organizational and structural problems brought about
by collectivization-especially the need to provide
Bureaucratic Rigidity. Economic performance has
been severely hampered by a highly centralized and
rigidly Stalinistic bureaucracy. Current attempts at
economic reform center on Ceausescu's "new econom-
ic mechanism" introduced in 1978, which called for
limited decentralization. These reforms have been
poorly implemented, and even strict adherence would
produce few benefits since central planning is still
dominant. In the absence of real reforms, the regime
addresses its most glaring problems by constantly
shuffling personnel and reorganizing ministries. Such
an approach is counterproductive; the bureaucracy's 25X1
stranglehold continues while expertise is not allowed
to develop.
Trade and Financial Di./fculties. Ceausescu's devel-
opment strategy has imposed serious strains on Roma-
nia's external financial position. Massive imports of
many goods-especially raw materials-are now re-
quired to sustain newly built industries. To obtain 25X1
these imports, Bucharest has expanded trade with the
West, thereby reducing its dependence on CEMA.
Since Ceausescu assumed power, CEMA's share of
total trade has fallen from 60 percent to about 33
percent, with the Soviets' share cut in half to just over
20 percent. Conversely, non-Communist trade jumped
from 35 percent to 60 percent, with the LDCs' share
rising sharply and now accounting for one-fourth of
total Romanian trade.
Romania continues to run a trade surplus with its
Communist partners, including the Soviet Union, but
its determination to expand economic relations with
non-Communist countries has led to a deterioration in
its hard currency position. Hard currency trade was
nearly in balance in 1976-77, but the deficit rose 25X1
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sharply exceeding $1.5 billion by 1980. During this
same period the current account deficit climbed from
about $300 million to $2.4 billion, and the hard
currency debt tripled to over $9 billion. Even more
alarming was the dramatic rise of short-term debt
between 1976 and 1980 from less than $50 million to
more than $2.1 billion.The worsening oil balance
played a key role in Bucharest's international finan-
cial position; the small oil trade surplus of 1976 had,
by 1980, turned into a deficit approaching $2 billion.
Bucharest faces hard times even if a rescheduling
accord is reached. Fuels and raw materials account
for three-fourths of Romania's hard currency imports,
and even a slight reduction in these imports would
lead to declines in production and exports. Imports of
machinery, which account for only 15 percent of total
imports, are already falling. Imports of food and
consumer goods account for the remaining 10 percent
and could be reduced only at the risk of increased
discontent. 25X1
Ceausescu's Response: More of the Same
Despite the potential for wider unrest, Ceausescu has
failed to come up with any new solutions to his
worsening problems. He is relying instead on a stop-
gap approach that combines coercion, concessions,
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and bureaucratic tinkering. The economic measures
taken so far are unlikely to increase productivity
significantly. Tightened central controls and frequent
reorganizations have depressed worker morale and
contributed to bureaucratic confusion. Although the
violent confrontations of last fall have not been re-
peated in recent weeks, discontent appears to be
simmering just below the surface.
Ceausescu now seems to be relying more heavily on
traditional tactics of exhortation and propaganda to
avert unrest. In numerous public addresses delivered
throughout the country over the past year or so,
Ceausescu has stressed how "well off ' Romanians
have become as a result of his beneficient policies and
their own hard work. He has called for even greater
worker discipline in the future. He has also staged a
number of demonstrations of support for his leader-
ship, including amonth-long "peace campaign" last
fall and workers' and peasants' congresses earlier in
party control.
In addition to these public spectacles, Ceausescu has
sought to improve the image of the official trade
unions and expand the role of the "workers' coun-
cils"-the vehicle by which workers ostensibly partici-
pate in the management of their own enterprises.
These efforts to enlist worker support for the regime
seem to have evoked little interest, however, probably
because both organizations clearly remain under strict
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and mismanagement.
In order to deflect blame for the failure of his policies,
Ceausescu has sought scapegoats among his subordi-
nates and shuffled his leadership team. Since last
February, the Central Committee secretaries for the
economy, agriculture, culture, and ideology have been
replaced, as have the principal government officers
responsible for economic planning, agriculture, labor,
energy, electric power, and finance. The regime has
made a show of severely punishing fraud, negligence,
The failure of these tactics alone to check growing
unrest has led Ceausescu to rely increasingly on
internal security forces and to ti hten the countr 's
alread re ressive controls.
Economic Tactics. Ceausescu has essentially opted for
a continuation of the economic strategy of the past 17
years. Some price adjustments are being made, appar-
ently at the prodding of the IMF, and growth targets
have been lowered in recent plans. But the emphasis
remains on developing heavy industry, with many
production targets still unrealistically high. The re- 25X1
gime boasts that Romania will be a medium-level
developed country by 1985 and predicts energy self-
sufficiency by the end of the decade.
The government tried first to improve food distribu-
tion last fall via a media campaign against speculators
ties-including prison sentences of up to five years-
for holding food supplies in excess of legally estab- 25X1
lished limits. A nationwide food rationing program
Agricultural incentives have been given more atten-
tion recently in an effort to boost food supplies. The
share of investment allotted to agriculture has in-
creased slightly in the 1982 plan, incomes have been
boosted for those working on cooperatives, and bo-
nuses have been introduced to encourage production
grain,- and vegetables.
discipline are to blame for shortcomings.
These minor changes are the only positive steps taken
since Ceausescu proclaimed the need for an agricul-
tural revolution a year ago. There are no stronger
signs that Ceausescu might be willing to alter his
development strategy., Bucharest has repeatedly
stated that Romanian agriculture has all that it needs
and that managerial incompetence and lack of work
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Administrative tinkering has largely worsened the
economy's problems. Tighter party control over the
agricultural sector has recently introduced another
layer of red tape, and a plan to make each county self-
sufficient in agriculture has further added to bureau-
cratic inefficiency. Recent ministerial reorganizations
did little more than expand the bureaucracy. A new
foreign trade law introduced in January 1981 was
intended to make foreign trading organizations act
more responsibly, but it had the adverse impact of
paralyzing many officials who were unfamiliar with
the law's technicalities.
Implications for the West
As financial difficulties have mounted, Romania has
sought Western help, with mixed results. Bucharest's
membership in the IMF-it is the only IMF member
from the Warsaw Pact-enabled it to secure a $1.3
billion standby credit last June, along with $196
million in compensatory financing to offset shortfalls
in exports in 1980. Bucharest recently failed to satisfy
the conditions set for the standby credit, however, and
this resulted in a suspension of loans. Last fall,
Romania asked the United States, the United King-
dom, West Germany, and France for substantial
financial assistance but came away emptyhanded.~
Ceausescu nevertheless is counting on his image as a
foreign policy maverick to convince Western nations,
especially the United States, to assist him in overcom-
ing his current economic difficulties. His call last fall
for the withdrawal and dismantling of Soviet missiles
in Europe in return for US nondeployment of INF
was apparently intended to win Western sympathy
and support.
Extensive Western financial support would encourage
Ceausescu to preserve-and possibly strengthen-his
independent position, but one shot of assistance would
not cure Romania's economic ills and he would have
to repeat his requests in the near future. Despite his
need for Western economic support, moreover,
Ceausescu would not make concessions that went
beyond what he perceived as the limits of Soviet
tolerance, particularly in view of heightened East-
West tensions over the Polish crisis.
Should Ceausescu fail to obtain the economic help he
needs from the West, he will probably turn increas-
ingly toward radical Arab states. Although a luke-
warm supporter of the Camp David accords and the
only Warsaw Pact country to have diplomatic rela-
tions with Israel, Romania has tilted slightly in recent
years toward the Middle East's more militant forces
in order to assure future oil deliveries. Bucharest now
imports just under one-half of its oil needs from North
Africa and the Middle East, mostly from radical Arab
regimes such as Libya, Iran and Ira .
Another important consideration for the West in
weighing future Romanian aid requests is the mean-
ing of a destabilized Romania for the Balkans, an
area where three of the four Communist states have
managed to slip away from Soviet control. Yugoslavia
would be exceedingly nervous over any instability that
might lead to increased Soviet influence. Moreover,
Belgrade would have reason to fear that serious
economic disarray in Romania would have unfavor-
able consequences for already shaky Western banker
confidence in Yugoslavia. The USSR's traditional
friend Bulgaria, concerned about possible spillover
from unrest in Romania, might press for Soviet
intervention.
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Top Secret
A reassertion of Soviet dominance over Romania,
especially if it resulted in renewed Soviet military
presence there, would threaten directly or indirectly
the security interests of many neighboring states.
Yugoslavia would be concerned over its continuing
viability as a "gray area" between the Warsaw Pact
and NATO and would urgently seek US and Western
assurances of increased support for its independence.
Unease would also be apparent in Rome, Vienna,
Athens, and Ankara because their security interests
require that Yugoslavia remain a buffer along the
25X1 borders of the Warsaw Pact.
Outlook
Despite the dismal record he has compiled thus far,
Ceausescu appears convinced that Romania's prob-
lems are only temporary and seems determined to stay
on his present course. Continuing refusal to make
needed policy changes will cause further economic
decline and erosion of Ceausescu's standing with the
populace. Although the deterioration of living stand-
ards is not expected to spark a sudden general chal-
lenge to the regime's authority, disturbances will
probably grow in scope, number, and intensity. Roma-
nia will become increasingly vulnerable to external
shocks, which could cause severe economic dislocation
and provoke major public disturbances.
Ceausescu's political isolation and unwillingness to
allow disagreement with his decisions will stifle con-
sideration of alternative approaches within his inner
circle. Ceausescu will remain wary of any reforms
designed to make the economy more efficient by
introducing market mechanisms, although he may be
forced to make some minor adjustments to satisfy the
IMF and other creditors. Aside from ideological
objections, he probably believes that reforms would
not yield benefits soon enough to help the regime and
could aggravate tensions in the interim. Many work-
ers, managers, and bureaucrats would feel threatened
by subsidy cuts, price hikes, reduced job security,
closer linking of pay to productivity, and greater
enterprise autonomy. Ceausescu will avoid any retreat
from his goal of industrializing Romania, as such a
move would probably be interpreted as an admission
of failure and an indictment of his economic policies.
This would undermine his position within the bu-
reaucracy and make him appear more vulnerable
thus encouraging challenges to his leadership.
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ects. Living standards will continue to slip.
The regime's standpat strategy offers little hope of
relief from the economic slide. Domestic economic
problems are deep-seated and resistant to the regime's
piecemeal approach. Energy difficulties probably will
mount, barring a .major oil find or a substantial drop
in world oil prices. Some minor improvements in
agriculture are possible, but output will still be insuf-
ficient to cover both domestic needs and export
objectives. Efforts to correct the hard currency imbal-
ance will result in still slower growth or even a
production decline. Bucharest will find itself forced to
scale back or postpone major industrialization proj-
The regime appears confident that the public will 25X1
accept deprivation with relatively little protest. In-
deed, the chances for major upheaval or the emer-
gence of an organized opposition, such as Solidarity in
Poland, remain slim at this time. The pervasiveness of
the security apparatus and the futility of past chal-
lenges to authority probably still inhibit most Roma-
nians. At present, only the miners and workers in
several heavy industrial lants seem to have a strong
sense of militancy. 25X1
The danger for Ceausescu is that unrest will persist
and spread, causing gradual destabilization through-
out the country. Many workers could become radical-
ized if turmoil and violence continued long enough.
Once workers became aware of their potential lever-
age and learned to coordinate protests, they could
exert enormous pressure on the regime. As economic
constraints tighten, Ceausescu will find it more diffi-
cult to respond effectively to successive crises. A
prolonged disturbance in one area could spark out-
breaks elsewhere, and the regime mi ht be unable to
put out all the fires. 25X1
If unrest deepens, intellectual and/or religious dissi-
dents probably will try to make common cause with
the workers, as they did last year with little success.
The regime has moved quickly to squelch the small
dissident movements that have emerged in recent
years-including a free trade union movement in
early 1979-through harassment, imprisonment, and
forced emigration. Dissidents thus are not now a
significant problem, but they are persistent and eager
to take advantage of worsened domestic conditions. ~
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Unrest stemming from economic grievances might
rekindle the latent discontent among Romania's siz-
able ethnic minorities-especially the Hungarians,
who comprise about 8 percent of the total population.
Although the minorities appear quiet at the moment,
they have occasionally become restive in the past over
perceived cultural discrimination and regime insensi-
tivity
Ceausescu's worsening problems at home will put
pressure on his maverick foreign policies. In his effort
to get aid from wherever he can, Ceausescu will
continue a multitracked policy with sometimes con-
tradictory goals. He will seek accommodation with
the Soviets in the hope of gaining more favorable
economic treatment, but he will be careful not to
compromise Romanian independence-the main
foundation of his domestic credibility. In order to win
sympathy in the West, Ceausescu will try to refurbish
his credentials as an independent world statesman.
And finally, he will pursue closer ties with oil-rich
militant Arab states while trying to preserve his
ability to talk to all the disputants in the Middle East.
This increasingly erratic foreign policy approach is
not likely to yield the desired economic payoffs.
Ceausescu may have difficulty maintaining the nearly
total dominance of the party and state apparatus that
he has exercised during the past decade and a half.
Resentment at all levels of the bureaucracy over
Ceausescu's autocratic and arbitrary ruling style,
combined with fear of becoming his next scapegoat
and concern that he may not be able to prevent a
breakdown in party control, might galvanize Ceauses-
cu's followers into moving against him. While there is
no evidence that such a move is actively being consid-
ered, Ceausescu's frantic juggling of his cabinet in
recent months indicates growing turmoil within the
leadership and suggests that Ceausescu may already
sense pressure building against him.
Should unrest intensify beyond the ability of
Ceausescu or his successors to control, the Soviets
would be forced to consider massive aid-coupled
with demands for major political concessions-or
military intervention. Either approach would impose
costs that Moscow would prefer to avoid. In the end,
however, Moscow's decision would be governed by the
need to restore order in a neighboring Communist
state. As a side benefit, reassertion of control over
Romania would improve Moscow's strategic position
in the sensitive Balkan region, which is now free of
Soviet troops. A return of Romania to a more subser-
vient position would, among other things, make it
easier for Moscow to move large numbers of troops
quickly into the region should Soviet security interests
so require.
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Top Secret
Appendix
Likely Key Players
in a Forced Succession
Ceausescu so overshadows his associates that it is
difficult to identify credible alternative leaders or
predict the future actions of any opposition within the
leadership. Certain individuals stand out, however, by
virtue of their backgrounds, connections, or portfolios
as likely to play an important role in any forced
succession.
Ceausescu's Inner Guard
Three main political groupings can be discerned that
could have a major bearing on the outcome of a move
to oust Ceausescu. One group, a handful of relatives
and cronies who occupy sensitive posts, is so closely
identified with Ceausescu that it would probably fall
with him in the event of his overthrow. This group
could be expected to fight tenaciously to keep him in
power. Its most prominent members include:
Permanent Bureau'
First Deputy Prime Minister
Ceausescu's wife, Elena, who has emerged since the
early 1970s as a key adviser and political power. She
controls personnel appointments within the party,
oversees the formulation of science policy, and has
major input into cultural and ideological policy. Her
rapid rise to prominence has evoked considerable
resentment within the ranks of the bureaucracy, and
her reputation for vindictiveness and ruthlessness has
made her one of the regime's most unpopular figures.
Permanent Bureau
Secretary for Agriculture
Deputy Prime Minister
Central Committee Secretary and Deputy Prime
Minister Emil Bobu, who may be the Ceausescus'
strongest supporter within the leadership. Brought to
Bucharest from the provincial apparatus in the mid-
1970s to head the Ministry of Interior, he later
became party secretary for cadres, military and secu-
rity affairs, and party administration.
sibility now is the agricultural sector, where he has a
virtual czardom.
Permanent Bureau
Secretary for Cadres
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Central Committee Secretary Iosif Banc, an ethnic
Hungarian, who ranks with Bobu as a particularly
close and valued henchman of the Ceausescus. Until
last fall Banc supervised economic affairs and headed
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a joint party-state body empowered to ferret out graft
and corruption in the bureaucracy and to ensure
compliance by all agencies with regime policies. His
enthusiastic-some say ruthless-performance of his
inspector chores has earned him an unfavorable repu-
tation among his peers. He now assists Mrs.
Ceausescu in the personnel area.
Secretary for Military and
Security Ailairs
Central Committee Secretary Ion Coman, who has
responsibility for military and security affairs. Co-
man's association with Ceausescu dates from their
service together during the early 1950s in the Army's
Higher Political Directorate. He became head of that
directorate soon after Ceausescu took over leadership
of the party, later worked with Ceausescu as chief of
the Central Committee section for military and secu-
rity affairs, and subsequently served as Minister of
Defense. He seems to dominate the current Minister
of Defense. He reportedly is in poor health.
Potential Power Brokers
A second grouping comprises several politically pow-
erful individuals who, although undeniably loyal to
Ceausescu, are not tied so closely to him that they
would necessarily be doomed to political extinction in
the event of a palace coup. They would be reluctant to
move against Ceausescu but could probably be con-
vinced to do so if the regime's viability and, hence,
their own careers seemed threatened. Their support
for an attempt to oust Ceausescu could be crucial to
its success. The most prominent include:
Prime Minister Ilie Verdet, who ranks number three
in the power hierarchy and is one of Romania's most
durable politicians. A Ceausescu protege, he is the
Permanent Bureau
Prime Minster
only one of the President's original "companions" who
has managed to retain high status and power through-
out the entire Ceausescu era. While his unquestioned
loyalty has been the main factor behind his longevity,
he does not appear as subservient as others in
Ceausescu's entourage. Verdet's long experience in a
number of key party and government posts in which
he has overseen personnel appointments and imple-
mentation of economic policy has afforded him broad
contacts. The Minister of Interior, for instance, is
reported to be close to him. Verdet's friendly,
straightforward manner, his competence, and his
tendency to remain in the background appear to have
won him a favorable image within the bureaucracy
and enabled him to avoid being tainted by the grow-
ing animosity toward the Ceausescus.
Permanent Bureau
Secretary for Party
Organization
Central Committee Secretary Constantin Dascalescu,
who is secretary for party organization
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Permanent Bureau Permanent Bureau
Minister ojForeign ,q/fairs Deputy Prime Minister
Minister oj'Foreign Trade
Foreign Minister Stefan Andrei and Foreign Trade
Minister Cornel Burtica, who represent to some ex-
tent the growing number of technical-scientific ex-
perts who have moved into the bureaucracy in the last
two decades. Relatively young (50), wcll educated
(graduate engineers), and pragmatic in outlook, they
are loyal to Ceausescu-to whom they owe their
positions-but do not seem to share fully his hardline
ideological views. Ceausescu's growing reliance on
more narrow apparatchiks and his seeming inability
to resolve Romania's worsening domestic problems
could convince them that their professional and eco-
nomic status is threatened and thus incline them to
back or acquiesce in an effort to oust him.
Rivals in Eclipse
A third group, consisting of former political
heavyweights who have fallen on hard times but still
retain some attractiveness as alternatives to
Ceausescu, is waiting in the wings and could play
major roles in inspiring a move against Ceausescu.
The main members of this group are:
Virgil Trofin, a longtime rival of Ceausescu's, who
may be regarded by the President as his chief threat.
His humiliating expulsion from the Central Commit-
tee last November, just two months after being fired
as energy "czar," may have been prompted by
Ceausescu's determination to remove him as a poten-
tial rallying point for disgruntled bureaucrats. A
gifted but outspoken administrator, Trofin was once
considered the number-two man in the hierarchy and
Ceausescu's heir apparent. Trofin's criticism of
Ceausescu's personality cult and autocratic policies
resulted in a series of demotions during the last
decade, but continuing support for him within the
bureaucracy apparently prevented Ceausescu from
moving against him as forcefully as he would have ~,
liked. The decision finally to purge Trofin and risk
unsettling the bureaucracy may reflect an awareness
by Ceausescu of increasing personal vulnerability.
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 Chairman, Central Union of
Consumer Cooperatives
Paul Niculescu, another of Ceausescu's early associ-
ates who attained high status in the late 1960s but
later fell into political decline. He would almost
certainly play a major role in apost-Ceausescu Roma-
nia. An impressive and somewhat charismatic figure,
Niculescu earned a reputation as a strong nationalist
and cultural liberal as Ceausescu's chief ideologist
and foreign affairs adviser during the late 1960s.
After several years in political limbo following policy
disagreements with Ceausescu, he returned to promi-
nence in the late 1970s as Minister of Finance, only to
be fired last spring as an apparent scapegoat for the
regime's balance-of-payments difficulties.
Chairman, National Council
for Water Resources
Ion Iliescu, now head of the relatively obscure Na-
tional Water Council, but a prominent youth leader in
the 1960s. Bright, dynamic, and unusually candid,
Iliescu is considered by many to be the most impres-
sive individual in the Romanian leadership. His im-
mense popularity with Romania's youth and his out-
spoken criticism of Ceausescu's autocratic leadership
reportedly led to his political decline, but his youth,
ability, and continuing popularity with many mem-
bers of the bureaucracy suggest he would be an
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