D/NIO CHRONO - - JULY 1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01720R001000070001-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 23
• Document Creation Date: December 12, 2016
• Document Release Date: June 25, 2002
• Sequence Number: 1
• Publication Date: July 1, 1975
• Content Type: LIST

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-low' VW
24 July 1975
MEMORANDUM FOR:
Room 513 Key Building
SUBJECT : Certification of FY 1975 Obligations
This is to certify that all obligations reported
to the Office of Finance during Fiscal Year 1975 which
remaindd unliquidated as of 30 June 1975 were valid and
properly documented in accordance with HHB 30-1, para.
20a(1).
STATINTL
G orge Carver
D/DCI/NIO
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THE DIRECTOR OF CENTRAL INTELLIGENCE
WASHINGTON, D. C. 20505
23 July 1975
MEMORANDUM FOR: The Honorable James R. Schlesinger
The Secretary of Defense
SUBJECT Implications of Current East European
Grain Crop Forecast
1. During the past month, our OER colleagues have
lowered by almost ten percent their forecast of Eastern
Europe's grain crop, largely as a result of floods and
drought in that area. So far, the available evidence
suggests that the various countries involved will be able
to manage without increasing grain imports from the U.S.
or other Western nations. Before this season is over,
however, all that could be changed by further adverse
weather, or-by political considerations. Given the impor-
tance of this situation and the elements of uncertainty
involved in it, in OER pulled together a
mini-estimate as part o our backup material for the
President's discussions with East European leaders in
Warsaw, Helsinki, Bucharest and Belgrade.
2. I thought you might be interested in this piece
and in a complementary article on the current overall East
European economic situation published on 23 July in OER's
Economic Intelligence Weekly. Copies of both of these
notes are appended for your information.
25X1A
'' George Carver., Jr.
Deputy for National Intelligence Officers
GACarver, Jr./kes
Original - Addressee w/atts
1 - NIO/USSR w/o atts
1 - D/NIO Chrono w/atts
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of Central Intelligence
NIO n 1722/75
23 July 1975
MEMORANDUM FOR. Mr. Colby
SUBJECT . Support for the President's
Trip: Implications of Current
East European Grain Crop
Forecast
Bill,
STATINTL
Floods and drought have reduced OER's
Eastern Europe grain crop forecast by almost
10% in the last month. So far the policy
implication is that the various countries
involved will :manage without increasing US
or other Western grain imports, but weather
(or politics) ma yet this season change
all that. Sol in OER has
pulled together a mini estimate as back-up
for the President's discussions with East
European leaders in Warsaw, Helsinki,
Bucharest and Belgrade.
National. Intelligence Officer
for USSR/EE
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of Central Intelligence
23 July 1975
STATINTL
MEMORZ NDUM FOR:
SUBJECT East European Grain Situation:
Implications for the President's'
Trip
Denis and Bob,
Here is a free-will offering on the
current outlook for the Eastern European grain
crop, and our best guess on grain import im-
plications. We were 1roved by the recent flood/
drought combinations in the area to think the
estimate might be of use in connection with
the President's trip and discussions with
STATINTL East European leaders. of CIA's
Office of Economic Research wrote the piece.
I also call to your attention a piece
on the current overall Eastern European
economic situation, published this horning
in OER's Economic Intelligence Weakly, A
copy is attached.
STATINTL
National Intelligence Officer
for USSR/EE
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Of Central Intelligence
23 July 1975
hMITJF I DUM FOR: Mr. Helnnat Sonnenfelcit
Counselor of the Depertr rit
of State
SUBJECT . East European Grain Situation:
Implications for the President's
Trip
Hal,
Here is a free-will offering on the
current outlook for the Eastern Europea: ; grain
crop, and our best guess on grain im x r_t i_nr
plicaLions. We were roved by U .,e recen flccd/
drought combinations in the area to think the
estimate might be of use in connection with
the President's trip and discussions with
STATINTL East European leaders. of CIA's
Office of Economic Researc 1 wrote the piece.
I also call to your attention a piece
on the current overall Eastern European
economic situation, published this morning
in OER's Economic Intelligence ~~c ekly. A
STATINTL
Nationq Intelligence Officer
for USSR/;))
Attachments
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I . Ha rt-man
A4 i nr~
Mr.
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Secret
EASTERN EUROPE: ECONOMIC SITUATION REPORT
Poor crop weather in July in Eastern Europe portends a disappointing
agricultural performance in 1975 and an almost certain slowdown in economic
growth. The various Communist regimes had already been braced for a difficult
year because of prolonged Western recession and the substantial rise in the price
of Soviet raw materials.
Agriculture: Floods in the South, Drought in the North
The East European governments had been counting on a grain crop even greater
than the record 90 million tons of 1974. However, rains, floods, and drought
combined forces in early July to dim these hopes. With the harvest under way,
torrential rains and flooding hit Romania, Yugoslavia, Hungary, and Czechoslovakia,
causing considerable damage to grains. Meanwhile, grain crops in East Germany
and fodder crops in Poland were threatened by drought. We have lowered our
estimate of the region's grain crop to 86 million tons.
Impact of Western Recession
Recession among major non-Communist countries has held back Eastern
Europe's export sales in 1975, with the decline in volume being hidden by price
increases and revaluations of currencies.
Yugoslavia purchased three-fourths of its imports from the West in 1974 and,
with its more open and less centrally planned economy, is particularly vulnerable
to economic developments in the West. Exports to its major Western markets
declined in the first quarter compared with a year earlier while imports continued
to increase rapidly. Belgrade imposed import restrictions in June. It has requested
debt rescheduling on a selective basis, being able so far to finance only two-thirds
of the hard currency requirements we estimate for 1975. Growth of industrial
production slackened in late spring as a result of earlier import restrictions and
deliberate efforts to rein in new investment. In spite of government efforts to
curb imports and investment, inflation is still running at 25%. A unique factor
in the inflation problem in Yugoslavia is the ability of local worker councils to
press for higher wages.
Romania, as an exporter of petroleum and a beneficiary of higher world prices,
continued its rapid industrial growth through the first quarter. Growth of exports
to the West was about the same as in 1974 but, like the others, Romania was
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having difficulty in marketing such goods as textiles and chemicals in the West.
Also, Romania is no longer self-sufficient in crude oil and will require increasing
imports to utilize its refining capacity. Bucharest in July imposed price increases
for various consumer goods and services, ranging from 25% for natural gas to 103%
for heating oil.
Poland, with the advantage of growing foreign demand for raw materials such
as coal and sulfur, has been less affected than the others by world economic
problems. Prices for its exports to the West actually increased more in 1974 than
prices for its imports. Warsaw is having little difficulty in obtaining Western credits,
having secured at least $2.6 billion so far in 1975. The largest deal is the $1.7
billion in government-guaranteed credits from France arranged during Giscard
D'Estaing's visit to Warsaw in June. The regime is still managing to satisfy consumer
demand sufficiently to avoid widespread discontent. Adverse consumer reaction
to scattered meat shortages last winter and again in June underline the continuing
pressure on the regime to step up supplies of quality goods.
Hungary, which purchased less than half of its imports from the West in 1974,
already has lowered its goals for economic growth and levels of consumption for
the next five years. Poor in mineral resources, Hungary is more heavily dependent
on trade for its economic progress than are the other East European countries.
Exports to the West declined in the first quarter and continued to decline in April
and May. The government has been tightening restrictions on imports. Hungary
was the only East European country to reduce orders for Western machinery and
equipment in January-May 1975 compared with a year earlier.
Bulgaria, Czechoslovakia, and East Germany are less dependent on Western
imports and have generally been less affected by the recession.
Eastern Europe: Imports from the Non-Communist Countries
Percent of Total Imports
56
48
27
24
21
79 77
74
1970 73 74 1970 73 74 1970 73 74 1970 73 74 1970 73 74 1970 73 74 1970 73 74
Bulgaria Czechoslovakia East Hungary Poland Romania Yugoslavia
Germany
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Eastern Europe: Trade with the West'
Imports-
Exports
Jan-Mar
Jan-Mar
Jan-Mar
Jan-Mar
1973
1974
1974
19752
1973
1974
1974
19752
Total
10,521
15,311
3,080
4,421
7,828
9,485
2,110
2,337
Bulgaria
408
717
122
243
299
325
83
89
Czecho-
slovakia
1,118
1,417
289
385
963
1,139
238
299
East
Germany
1,580
2,020
414
559
1,413
1,819
396
457
Hungary
929
1,526
308
461
939
1,115
235
233
Poland
2,605
3,723
778
1,084
1,589
2,029
489
543
Romania
1,164
1,809
362
581
919
1,187
237
306
Yugo-
slavia
2,717
4,099
807
1,108
1,706
1,871
432
410
1. Austria, France, Italy, Japan, Sweden, Switzerland, United Kingdom, United States, and West Germany.
Data are from Western sources.
2. Preliminary estimates.
Eastern Europe: Trade with the United States'
i
Imports
Exports
Jan-Mar
Jan-Mar
Jan-Mar
Jan-Mar
1973
1974
1974
1975
1973
1974
1974
1975
Total
839
1,130
302
374
471
807
178
192
Bulgaria
6
22
2
11
5
8
6
9
Czecho-
slovakia
72
49
13
12
35
46
8
11
East
Germany
28
21
6
2
10
14
3
3
Hungary
33
56
20
30
16
75
7
13
Poland
349
395
104
141
182
266
68
69
Romania
116
277
72
74
56
130
28
18
Yugo-
slavia
235
310
85
104
167
268
58
69
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Trade with the United States is dominated by Poland and Yugoslavia, the
only countries having Export-Import Bank financing and most-favored-nation status.
Romania found its access to Export-Import credits suspended under the 1974 US
Trade Act; a Romanian-US trade agreement now awaits legislative action in the
Congress.
The stiff price increases for Soviet oil and other raw materials in early 1975
have had their greatest impact on Hungary, Czechoslovakia, and East Germany.
Poland with its coal and Romania with its oil have been less affected. Bulgaria
has fallen in between. Yugoslavia had been paying world market prices for its Soviet
raw materials and has not been affected by the price hikes. The impact on the
hardest hit countries has been mitigated - at least in 1975 - by various Soviet
concessions. For instance, the Hungarians have benefited from Soviet long-term
credits and above-plan deliveries of vital raw materials.
Near-Term Prospects
We expect the East European regimes to search for additional financing in
Western money markets while dampening consumption at home. Indebtedness to
the West is high and growing, although not yet a serious problem (except in
Yugoslavia). Poland alone may avoid an economic slowdown this year.
(Confidential).
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23 July 1975
IMPACT OF FLOODS AND DROUGHT ON EASTERN EUROPE'S
Rains, floods, and drought combined forces during
July to dim Eastern Europe's hopes for bumper harvests.
--With the harvest underway, torrential rains
and flooding hit Romania, Yugoslavia, Hungary,
and Czechoslovakia, causing damage to grains.
--Meanwhile, grain crops in East Germany and
fodder crops in Poland are threatened by drought.
We have cut our estimate almost ten percent in
the last month and now project this year's grain harvest
at about 86 million tons compared with 90 million tons
in 1974. This projection, however, assumes normal
weather for the remainder of the growing and harvesting
seasons.
The presently expected shortfall in grain production
is not likely to trigger increases in grain imports. We
project East European grain imports for FY 1976 of 8 to
8-1/2 million tons compared with about 9 million tons
last year. The decline in imports is explained largely
by the expected absence from the grain market of Yugoslavia
and Bulgaria.
Yugoslavia will experience about one-half of the
expected 4 million ton decline in output, but stocks from
last year's bumper wheat crop, and a policy of further
belt-tightening, will probably keep Belgrade out of the
grain market this year. In FY 1975, Yugoslavia imported
about 0.5 million tons of grain. Bulgaria is also not
expected to need imparts. Last year, a drought forced
Sofia to import about 0.8 million tons of grain to feed
livestock.
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The USSR is expected to supply the usual amount
of wheat -- almost 4 million tons -- in FY 1976 and is
unlikely to supply additional grain because of the floods.
The Soviets would probably be responsive to emergency
requests for grain by their regular East European cus-
tomers -- Czechoslovakia, East Germany, or Poland, which
together account for almost all of the normal Soviet
sales. Among the flooded countries, Hungary, Romania,
and Yugoslavia are not normally Soviet customers for
grain. Of these, only Romania is now expected to be
in the grain market and her maverick relationship to
the USSR would work against a Soviet offer.
Eastern Europe imported about 2-1/2 million tons
of grain from the United States in FY 1.975 and is ex-
pected to import a similar quantity in FY 1976. Poland,
Romania, and East Germany will be the major buyers of
US grain. Except for Romania which has already requested
emergency shipments of 200,000 tons of feed grains, the
flooding is not expected to increase demand for US grain
at this -time. Demand will increase, however, if drought
conditions persist in East Germany and Poland and result
in crop losses beyond what is now forecast.
Both Poland and Romania are seeking CCC credits for
grain. Warsaw plans to increase its grain purchases to
as much as 1.2 million tons annually of wheat, barley,
and corn to support its growing livestock sector. Romania's
plans are less certain. Drought had caused two poor har-
vests in a row and this year a good harvest was necessary
to replenish depleted feed stocks. Bucharest might also
purchase wheat for resale to its export customers as it
did in 1974.
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CONFIDENTIAL
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?3 July 1975
STATINTL
NOTE FOR:
for your information, the Senate Select staffers
have now decided to focus in on the FOCUS B exercise.
They have formally requested the opportunity to review
all of the various papers which taken together comprise
the FOCUS effort. The DCI has responded that he sees
no reason that they not have access to these papers.
Of course, at this time none of the material will be given
to the staffers but: will be reviewed in the presence of
a Human Sources Committee member. Should the staffers
any of the
decide that they want retention copies of
papers, they will have to submit specific requests along
this line. Additionally, should they wish to meet with
any of the NIOs who have participated in the
exercise, a request will have to be levied throug ~i nels.
STATINTL
Georg- A. Carver, Jr.
Deputy for National Intelligence Officers
DOClose:kes
Cys - Addressees
1 - DOC Chrono
i - D/NIO Chrono
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STATINTL
 MjRR 0R01720R0RjRP04170d0 _2 - 751"
11 July 1975
STATINTL
NIO/USSR
SUBJECT Designation as Acting D/DCI/NIO
1. As you know, I plan to take a week's leave beginning
at COB Friday, 11 July. Per the attached notice, you are hereby
formally designated Acting Deputy to the Director of Central
Intelligence for National Intelligence Officers during my absence.
2. In this capacity, you will have both the right and the
obligation to sit for me as a member of the Agency's appellate
body on Freedom of Information Act appeals, the Information Review
Committee.
STATINTL
Geo ge Carver, Jr.
Deputy for National Intelligence Officers
cc: DCI
DDCI
Chairman, IRC
D1DCI y~i~b CL461& ~/
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11 July 1975
SUBJECT Designation of Acting D/DCI/NIO
STATINTL
Effective COB Friday, 11 July 1975,
NIO/USSR, is designated Acting Deputy to the Director of Central
Intelligence for National Intelligence Officers. He will serve
in this capacity until I return from leave, which I plan to do
on Monday, 21 July.
STATINTL
Geo ge A. Carver, Jr.
Deputy for National Intelligence Officers
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-NIO
8 July 1975
STATINTL
You will think our manners here at the Agency are
something awful. I refer to your friendly letter of
May 21 addressed to George Carver.
Part of the trouble has been the rush of events here
and part of it has been a lot of head scratching and
mulling.
But I am afraid that the final decision has been that
we are going to have to continue our old tradition which
will not allow us to participate in the project you have
suggested.
Perhaps times and customs will change; you will have noted,
'of ~+ course, that the Director has appeared on national tele-
vision.
With thanks.
Sincerely,
Angus MacLean Thuermer
Assistant to the Director
STATINTL
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7 July 19 7 5
Note For: The Director
Attached is a self-explanatory note
to Mr. Hills confirming the NIE arrange-
ments agreed to at the White House session
1 July.
STATINTL
George /D Carver, Jr.
CI/NIO
cc: DDCI
STATINTL
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