(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R001100760001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: January 12, 2017
• Document Release Date: August 19, 2010
• Sequence Number: 1
• Publication Date: September 28, 1984
• Content Type: MEMO

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-S Ezl
DIRECTORATE OF INTELLIGENCE
28 September 1984
Romania-USSR: Improving Ties
Summary
In recent weeks, Romanian President Ceausescu
has demonstrated once again his willingness to act
independently of and to embarrass the USSR: he
defied the Soviet-led boycott of the Olympic games
this summer, and has indicated his determination
to proceed with a trip to Bonn in mid-October
despite the postponements--at Soviet behest--of
similar visits by East Germany's Honecker and
Bulgaria's Zhivkov. Such free wheeling behavior
contrasts with increasing signs since the first of
the year that the two countries may be moving
closer in the areas of economic and interparty
relations than attaany time since Ceausescu came to
power in 1965.
This memorandum was prepared by East European
Division, Office of European Analysis. It was coordinated with
the Office of Soviet Analysis. Comments s are
welcome and should be addressed to Chief, East
European Division, Office of European na ysis
EURM84-10201
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Signs of Warming Trend
The greatest movement has come in recent economic agreements
and understandings which, if realized, will significantly
strengthen economic links between the two countries. Foremost
among them is an agreement "in principle," reportedly reached
during a visit by Ceausescu to Moscow in June, for the Soviets to
increase oil sales to Romania substantially over the next several
years. Soviet sales would 25X1
quadrupit six or seven million tons annually by 1990, or about
60
percent of current total oil imports. The sales rportedl
the Romanians have
agre ur er in Soviet coal, iron ore, and natural
gas extraction in return for additional deliveries of these
commodities on a long term basis. Details have already been
worked out on a gas deal, which provides for Romanian assistance-
-with equipment and manpower--in developing a natural gas field
in Turkmenia and for Soviet delivery of an additional 0.5 billion
cubic meters of natural gas on top of the 1.5 billion cubic
meters now being supplied annually. The Romanians reportedly
also agreed to coordinate their 1986-90 plan more closely with
the Soviets.
In the political realm, Soviet diplomats in Bucharest have
told US and West German Embassy officials that Ceausescu agreed
earlier this year to Soviet demands for a "radical" improvement
in party-to-party relations as a prerequisite for improved state-
to-state ties and broader economic cooperation. Specifically,
the Romanians agreed to improve Moscow's currently very limited
access to senior Romanian party cadre, to consult with the
Soviets on ideology, to increase the frequency of party-to-party
exchange visits (to about 20 groups a year), and to exchange
faculty members and lecturers for party schools. Ceausescu also
has agreed, according to the Soviet diplomats, to raise no
obstacles to the renewal of the Warsaw Pact treaty in 1985 and to
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Purchase of Soviet oil at CEMA prices--long sought by the Romanians--
involves no bargain since CEMA oil prices currently match the world level. If
world prices increase, however,_ the CEMA price would lag behind world levels
for at least several years. 25X1
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increase military cooperation, both in the Warsaw Pact and
bilaterally.
The Soviet sources may have overstated the magnitude of
Romanian team spirit, but it does appear that Bucharest has been
more cooperative toward the Soviets over the past several
months. On INF, an issue that has provoked sharp disagreement
between the two countries the past several years, Bucharest has
generally moved closer to Moscow's line. Although Ceausescu has
steadfastly refused to endorse Soviet countermeasures to NATO
deployment of INF, he has on several occasions--both privately
and publicly--asserted that NATO INF deployments "forced" the
Soviets to take countermeasures and that NATO deployment must be
halted and missiles already deployed in Western Europe must be
withdrawn before INF negotiations can be resumed. In addition,
the Romanians in March--in a--rare_d_isp.lay_of solidarity with
their Warsaw Pact allies--presented NATO Embassies in Bucharest
with a Pact proposal for a freeze and subsequent reduction of
military spending. Finally, the behavior of the Romanians at the
CEMA summit in June appeared unusually tame; their subsequent
press treatment of CEMA issues has been bland or favorable. ^
Romanian Motivation
Romania's deteriorating economy is the main force behind its
move toward a closer relationship with the USSR. Bucharest wants
Moscow to help it alleviate energy and raw material shortages
which have been largely responsible for the decline in economic
growth the past three years to its lowest level since World War
II. Hard currency problems--caused mainly by overexpansionary
policies, increasing dependence since the late 1970s on costly
oil imports, and lagging hard currency exports--forced debt
reschedulings in 1982 and 1983 and have led the regime to impose
harsh stabilization measures the past two years. Bucharest has
slashed imports from the West by half, which has further slowed
economic growth and led to a severe decline in living
standards. Popular morale has plummeted and, although there has
been little overt antigovernment activity recently, criticism of
Cea_u_secu has become widespread, even within government ranks.
Ceausescu also may be looking eastward because he feels he
has been treated shabbily by the West. The recent debt
reschedulings were humiliating to him, and he has expressed anger
both at "interference" in Romanian economic decisionmaking by
Western bankers and the IMF and at criticism of Romanian human
rights policies at MFN hearings. Ceausescu may have decided to
seek relief from the USSR in order to reduce the risks associated
with too much economic dependence on the West.
In addition, Ceausescu appears to have become uncomfortable
with the tensions that had developed in Romanian-Soviet relations
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since 1981 as a result of clashes over INF, defense spending, and
ideological differences. It has long been his practice to seek
accomodation with Moscow following periods of strain. He may
have viewed the death last winter of Andropov, with whom he had
particularly difficult relations, as an opportunity to put
bilateral ties on a better footing. The Romanians both privately
and publicly have expressed their pleasure at the succession of
Chernenko, whom they view as a proponent of Brezhnev's more
tolerant approach. The apparent waning of the ailing Chernenko's
authority in recent months and the possibility of another Soviet
succession before long introduces an element of uncertainty,
however, as the Romanians do not appear to have had much contact
with leading contenders, such as Politburo member Gorbachev. F ___125X1
Soviet Motivation
The Soviets appear to have discarded Andropov's tough,
almost combative treatment of the Romanians, which may have
goaded Ceausescu into even greater defiance and thereby damaged
Moscow's efforts to increase bloc unity, in favor of a more
conciliatory policy. Moscow may have concluded that a positive
approach in the economic sphere would render Romania more
cooperative politically, thereby making it easier other members of the bloc.
Moscow may also be laying the groundwork for increasing its
influence in Bucharest after Ceausescu leaves the scene. By
helping the Romanians out now, the Soviets may hope to earn some
good will which they could spend later. Increased contacts could
provide the Soviets with better insights into the Romanian
political scene and, possibly, opportunities to coopt key figures
in the new leadership.
Prospects
Moscow and Bucharest clearly want to improve relations and
the evidence suggests they have established a basis for doing
so. In addition, the arrangements worked out so far this year
have the potential--depending on their magnitude and the degree
to which they are fulfilled--to increase Romania's economic
dependency on the USSR and to increase Soviet influence in
Bucharest. F_ I
There is reason, however, to question the strength and
durability of the current warming trend. Details remain to be
worked out on many of the agreements made the past several
months, and the negotiations could bog down on the issue of
Romanian contributions. Romania reportedly has had difficulty
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coming up with the hard goods to pay for 1.5 million tons of
Soviet oil already contracted for this year, which suggests it
may be hard pressed to meet obligations associated with
significant future increases.
The political and military concessions reportedly made by
Ceausescu could even be more ethereal. The agreement to allow
increased Soviet access to the Romanian leadership and more
frequent exchanges could be so hedged with restrictions that
Ceausescu could easily prevent significant "influence peddling"
by the Soviets. There are already indications of Bucharest's
refusal to alter its previous independent behavioral patterns.
Participation in the summer Olympic games and Ceausescu's
decision to proceed with his Bonn trip are only the most visible
examples. Despite several bows to the Soviet INF position, the
Romanians have continued from time to time to take a line
somewhat at variance with that of the Soviets. Bucharest also
intends to introduce a resolution on INF at the fall session of
the UN General Assembly which--in its present form--calls for the
total elimination of both NATO and Soviet INF in Europe--a
formulation likely to annoy Moscow. According to a variety of
sources, Romania also appears to have worked from time to time in
recent months with East Germany, Hungary, and Bulgaria to urge a
more moderate stance by the Warsaw Pact on East-West relations.
In`addition, the Romanians have continued to pursue good
relations this year with the USSR's main adversaries--the United
States and China. The Romanians have requested a visit by
Secretary of State Shultz, and Ceausescu's personal emissary--
Vice President Manescu--held high-level talks in Washington this
week, possibly to test the waters for a future Ceausescu visit.
Romania and China also have maintained a heavy schedule of
exchanges, including First Deputy Prime Minister Dinca's visit to
Beijing in June and visits to Romania by the Chinese Chief of
General Staff in July and President Li Xiannian in August. 25X1
Romania and the USSR also have good reason to limit any
improvement in bilateral relations. Ceausescu cannot afford to
be seen as betraying Romanian sovereignty because that would
eliminate his sole remaining source of domestic legitimacy. It
would also put him at the mercy of Moscow, which has little
reason to like or trust him. The Soviets, for their part, would
prefer not to expend substantial and increasingly scarce
resources to bring Romania into line, particularly when their
more loyal East European allies have had to accept reductions in
Soviet subsidies the past few years. j 25X1
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