POLAND: IMF MEMBERSHIP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86M00886R001200250004-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: August 26, 2010
• Sequence Number: 4
• Publication Date: October 17, 1984
• Content Type: MEMO

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THE WHITE HOUSE
WASHINGTON
October 17, 1984
MEMORANDUM FOR THE HONORABLE GEORGE P. SHULTZ
The Secretary of State
SUBJECT:
Poland: IMF Membership (S)
. System II
91053
,orc oct.&04
The President has reviewed and concurs with your recommendation
that Poland's application for IMF membership should not be
reactivated until the two prominent Solidarity activists,
Bogdan Lis and Piotr Mierjezewski, have been released and the
Polish Government has been informed of our concern and hope
for the release of the remaining political prisoners and of
our expectation that Wladyslaw Frasyniuk and Jozef Pinior will
be freed shortly. If the Polish Government does not comply
with these requests, we would not consider the amnesty to be
completely and reasonably implemented and thus, would not
reactivate Poland's application for IMF membership. (S)
However, once it has been determined that the Polish amnesty has
been completely and reasonably implemented, the following steps
should be taken:
a) State and Treasury should coordinate the ?preparation and
release of a public statement on the implementation of the
Polish amnesty.
b) State should inform our Allies, the Vatican, and the
Polish Government of our decision to reactivate Poland's
application for IMF membership.
c) Treasury should inform the IMF that conditions for
reactivating the membership application have been
satisfied, normal procedures that apply to any country
seeking membership should be followed, and the request
would be considered by the U.S. on its merits, including
Poland's ability and willingness to fulfill the
obligations of membership. (S)
State and Treasury in consultation with other appropriate
agencies should also undertake a review of Polish developments
and devise both a contingency plan to respond to ISossible
SECRET/SENSITIVE
Declassify on: OADR
SECRET C-30
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significant deterioration in Polish internal developments and
guidelines on how best to manage the remaining sanctions to
achieve our policy goals. The interagency recommendations
should be forwarded to the NSC by c.o.b. October 26. (S)
FOR THE PRESIDENT:
n_ Robert C. McFarlane
cc: The Vice President
The Secretary of the Treasury
The Secretary of Defense
;,,he Director, Central Intelligence Agency
SECRET/SENSITIVE
Pr. p PT
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? . ?
SECRET
The Director of Central Intelligence
WashigtorOk.20505
National Intelligence Council
NIC No. 04804-84
21 August 1984
MEMORANDUM FOR: Acting Director of Central Intelligence
FROM: George Kolt
National Intelligence Officer for Europe
SUBJECT: Poland and IMF Membership
1. In response to the Polish government's recent release of most
political prisoners, the USG has agreed to lift two sanctions: the bans
on scientific and cultural exchanges and on Polish airline flights to the
US. The US has also suggested that it might be ready to drop its
opposition to the renewal of Polish negotiations with the IMF over
membership. I suggest that you discuss the IMF issue with the Secretary
of State and with Mr. McFarlane. My personal belief is that it would be
premature to support Poland-IMF negotiations now.
2. The Polish application to join the IMF has been in abeyance since
December 1981 when the imposition of martial law forced an IMF delegation
to leave Warsaw. Simultaneously the USG made the renewal of these
negotiations (as well as the lifting of the other sanctions it imposed)
contingent upon Jaruzelski meeting three basic conditions. The USG has
gradually lifted its sanctions as Jaruzelski moved to satisfy the form
although not the essence of these conditions. Thus, he
--lifted Martial Law . . . but in such a way as to keep most of
its control features alive in new legislation.
--Freed the majority of political prisoners . . . but on
conditions that seem to guarantee there will be new political prisoners
before the year is out.
All paragraphs are
classified SECRET
SECRET)
CL BY SIGNER
DECL OADR
DERV MULTIPLE
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--Has been fairly conciliatory towards the Church . . . but
remained steadfastly opposed to any sort of dialogue which might put
limits on his power.
3. Still, we are now at a stage where we are discussing measures
that would again allow some Western credits to flow into Poland - in the
IMF case about $2 billion in the next 18 months. Those inside and
outside government who argue that the US should drop its opposition to
the renewal of IMF negotiations believe the Polish government needs new
credits so badly it could be made to accept IMF conditions that would in
effect bring about economic and political reform.
4. I agree that in some circumstances outside sources of financial
support can influence fin East European governments actions. Indeed, the
USG sanctions probably have had an effect in mitigating and undoing some
of the worse aspects of Jaruzelski's crime of 13 December 1981. But I
do not think that IMF negotiators can now push the Jaruzelski regime
into a positive direction:
The regime's top priority remains golitical control. It
is highly ;unlikely to agree to any economic reforms which
could undermine that political control.
As we wrote in our recent NIE on Eastern Europe, ". . .the
West almost certainly will not itself be able to create
the conditions that give rise to East European moves
toward economic flexibility and independence. Postwar
history . . . suggests that the initiative for change in
Eastern Europe must arise in the main from within."
Polish society is certainly more than ready for
initiatives for change. But the regime is not. Although
there probOly are some proponents of change within the
government; I do not think that even the support of IMF
negotiatiots would allow them successfully to press their
arguments in the security minded Jaruzelski regime.
5. The proponents Of INF negotiations would undoubtedly reply that
the USG would only be agreeing to the start of negotiations: IMF
membership -- and money -- would come only if the Polish government
would meet the IMF conditions. But we must keep in mind that, once
negotiations start, the IS government, in effect, will pretty much lose
control of the process tb the international servants in the IMF. And,
when the issue comes up for a vote, it will be harder to recreate a
United Western opposition to Polish membership (IMF membership issues
are decided by majority rules, with each nation voting shares based on
its financial contribution. Thus the US controls 19.2% of the vote).
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6. In sum, I do not think that the time is ripe for the USG to
support the renewal of negotiations over Polish membership in the IMF.
Proposed talking points for your discussion of this issue with the
Secretary of State and with Mr. McFarlane are attached.
Attachment
1. Talking Points
2. DDI Report Dtd 28 June
Poland and the IMF
84;
d.(r?
ccic
?17N
-George Kolt
SECRET
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NIC No. 04804-84
21 August 1984
MEMO FOR: Acting DCI
FROM: George Kolt
NIO/EUR
SUBJECT: Poland and IMF Membership
Distribution:
1 - DCI
1 - DDCI
1 - ER
1 - C/NIC
1 - VC/NIC
1 - NIO/E (w/o att 2)
1 - D/EURA (w/o att 2)
1 - EURA/EE (w/o att 2)
1 - NIO/EUR chrono (w/o att)
1 - NIO/EUR sub file
NIO/EUR/GKOLT (21 August 84) 25X1
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? ?e ? " SECRET
NIC No. 04804-84/1
21 August 1984
Propose'd Talking Points for ADCI Meeting
with Secretary of State Shultz and
National Security Advisor McFarlane
--The USG has suggested it would consider dropping its opposition to
the renewal of negotiations over Polish mebership in the IMF if the
Polish government implemented its pledge to free all political prisoners.
--In my judgment this would be a mistake:
- First, Jaruzelski is freeing prisoners under conditions
that seemingly guarantee there will be more arrests before
the years is out.
Second, I disagree with the argument that IMF negotiators
could push the regime toward meangingful economic and
consequently political reform. As we wrote in our ?recent
NIE on Eastern Europe, "the initiative for change in
Eastern Europe must arise in the main from within."
JaruzelskilTegime's top priority is political control.
Although there probably are some proponents of change
within the government, I do not think that even the support
of IMF negotiators would allow them to successfully press
their arguments in the security-minded Jaruzelski regime.
Third, we Must keep in mind that once IMF negotiations
start we are likely to loose almost all control over the
process to the negotiators and to other nations.
--In sum, I believe IMF negotiations at this time are unlikely to
yield the results we would want. Thus, I do not think the time has come
to drop our opposition to these negotiations.
SECRET1
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