STAFF NOTES: WESTERN EUROPE CANADA INTERNATIONAL ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500010048-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 21, 2016
• Document Release Date: March 17, 2009
• Sequence Number: 48
• Publication Date: August 14, 1975
• Content Type: REPORT

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Western Europe
Canada
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Secret
International Organizations
State Dept. review
completed
Secret
No. 0247-75
August 14, 1975
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WESTERN EUROPE -- CANADA - INTERNATIONAL ORGANIZATIONS
This publication is prepared for regional specialists in the Washington com-
munity by the Western Europe Division, Office of Current Intelligenc with
occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
` the authors of the individual articles. 25X6
CON TEN TS
Unemployment Worsens in France . . . . . . . . . 3
Turkish Leftists Arrested . . . . . . . . . . . . 8
Leaders of Principal Socialist Party in Spain
Expound Attitudes and Goals . . . . . . . . . . 9
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Unemployment Worsens in France
Unemployment in France, already at a post-
war high, will likely jump another 40 percent by
yearend--a disquieting increase in a country with
vivid memories of the 1969 crisis sparked by stu-
dents and discontented workers. Paris anticipates
a much smaller increase, counting on the psychological
impact of the $3.5 billion reflationary package
scheduled for announcement in September. We judge
that even if businessmen raise production in expecta-
tion of strengthening demand, forces already in
motion will drive unemployment up for another four
or five months.
Unemployment Trends
The number of unemployed has jumped 95 percent
in the past year to 878,000, or 4 percent of the
labor force at mid-1975. Last fall saw the steepest
rises, with the recent monthly increases at about
40,000. Most of the latest increments represent
young entrants into the labor force rather than
layoffs. People under the age of 25, the same age
group that manned the barricades in 1968, now
account for 36 percent of the unemployed, up
substantially from a year ago. The percentage
of males among the unemployed has also risen
during this period, from 47 percent to 53 percent.
About one-tenth of the jobless come from the ranks
of the 2 million foreign workers, mostly Algerians
and Portuguese, who constitute a like share of the
labor force.
Of those now out of work, only 70,000 have
been laid off and hence qualify for the new
program that guarantees jobless workers practically
100 percent of take-home pay. Faced with strong
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pressure from government and unions, French firms
have made great effc is to hold on to their employees.
Shortened workweeks, advanced vacation schedules,
and normal attrition have been used to avoid layoffs.
As a result, industrial employment declined only
1.3 percent from July 1974 to April 1975, while
industrial production plummeted by 13 percent.
Because hourly wages continued their rapid rise,
we estimate that unit labor costs rose 21 percent
during this period.
Prospects in the Labor Market
We believe that the number of jobless will
top 1.2 million by December, possibly reaching
1.5 million, or almost 7 percent of the labor
force, and that unemployment will remain well above
prerecession levels through 1976.
On the labor supply side, a sharp spurt in
the labor force is likely before the end of the
year. About 820,000 young people will reach
working age this year, of whom 650,000 are expected
to enter the labor force. Traditionally, school
graduates begin their job search after the August
vacation period. Retirements and withdrawals
from the labor force should number 300,000 to
350,000 this year, possibly half of them falling
in the second part of 1975.
On the demand side, the near-term outlook for
job opportunities is bleak. The increase in public
spending expected to be announced in early September
will not directly affect production until next year.
The government is pinning its hopes on an improve-
ment in the immediate climate of business. We
believe this is wishful thinking. Because most
firms have hung on to excess workers, they can
readily increase produciton in the initial stages
of economic recovery through fuller use of current
short-timers and underemployed persons.
Otherr government efforts to create jobs are
not likely to have much effect on the demand for
labor. Extension of the 1974 ban on the immigration
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of foreign labor will curb the growth of the labor
supply; it will not release jobs for Frenchmen. With 25X1
production sluggish, the program announced in June
to subsidize the hiring of young workers will hardly
make a dent in the crop of new graduates.
FRANCE: Unemployment Indicators
(Seasonally adjusted)
110 Trends in Industrial Employment
I and Production (Index: 1973=100)
105
100 t EMPLOYMENT
boor Trends in Total Unemployment and
I .job Vacancies (Thousand persons)
800
PRODUCTION 600
95 UNEMPLOYMENT
400
90
200 \ NB
VACAANCIES
I I 1 I I
J F M A M J J A S 0 N D J F M A VA
1974 1975
588825 8.75
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Turkish Leftists Arrested
Twenty-six members of the radical left Turkish
Revolutionary Peoples' Workers' and Peasants' Party
(TRPWPP) have been arrested in connection with their
occupation of the US Exchange Retail Store at Izmir
on August 7. The party's action to protest the
continued US presence in Turkey was well-coordinated
and may be part of a larger effort by Turkish radicals
to stir up anti-Americanism.
Although the party is small and was outlawed in
1971, it remains one of the best organized revolu-
tionary groups in Turkey. It has a history of
violent activities and is reported to control and
direct several radical leftist groups that were
involved in the recent student and political vio-
lence in Turkey. In March of this year a TRPWPP
cell was uncovered in Ankara with a cache of mili-
tary weapons and documents associated with plans to
assassinate Turkish political leaders.
Leftist political parties and unions now have
more room to maneuver since martial law--imposed
last year during the Cyprus war--was terminated
earlier this month. With the arms embargo continu-
ing to irritate Turkish-US relations, leftist
groups may try to initiate further protests or
attacks against US facilities and personnel in
hopes of creating the impression of widespread
anti-US sentiment. So far, however, no groundswell
of anti-Americanism has developed.
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Leaders of Principal Socialist Party in Spain
Expound Attitudes and Goals
Felipe Gonzalez, secretary general of the
Spanish Socialist Workers' Party (PSOE)--the
largest of the five illegal Socialist groups
in Spain--told Ambassador Stabler in Madrid last
month that the PSOE believes that efforts to
bring about democracy in Spain by reforming the
Franco regime will not work out. His party
believes that a complete break with the existing
regime will be necessary. This would be followed
by a transitional phase leading to a constituent
assembly which would draft a democratic constitu-
tion.
Gonzalez stressed that the PSOE, like most
other opposition groups, is aware of the need to
avoid any upheaval or "traumas" during the transi-
tion, but he noted that the longer the present
situation with a gradually deteriorating Franco
at the helm persists, the greater the possibility
of a trauma when Franco goes. The PSOE doubts
that Prince Juan Carlos, Franco's designated
heir, can provide the leadership or attract
sufficient support to see Spain through the criti-
cal transition period.
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Gonzalez played down the possibility of
violence, however, saying the PSOE favors a
pragmatic step-by-step approach in the post-
Franco era, which would not destroy the postive
institutions--he cited schools--Franco has built.
He added that he and other young opposition
leaders, although born after the Civil War, are
very much aware of, and still influenced by the
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war. Thus they are conscious of the need to
proceed with caution in order to avoid a similar
experience.
Gonzalez and the three colleagues who
accompanied him stated they believe the PSOE has
a solid working class base and a significant
political potential. One member of the delegation
told the Ambassador that in a free election the
PSOE might have almost as much electoral strength
as Marin Snares' Portuguese Socialist Party mustered
in the Portuguese elections last April, and that
the Spanish Communist Party would do no better
than the Portugues Communists (12-13 percent).
The PSOE leaders emphasized they are opposed
to the Communist-dominated Democratic Junta and
firmly support the newly formed rival Democratic
Convergence coalition. Gonzalez believes this
coalition will be capable of carrying on a dialogue
with all sectors of society, including the capitalists
and the military, in order to secure a peaceful and
orderly transition to a democratic system. Gonzalez
also stated that the PSOE feels that any post-Franco
democratic system must be open to all political
parties, including the Communists.
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