POLITICAL UPDATES ON EC COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T01298R000200260001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: September 29, 2009
• Sequence Number: 1
• Publication Date: August 26, 1985
• Content Type: REPORT

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Attached irc. the political updates you requested
on- the -ten EC countries. ''er your -r-equest, we have-
kept each country section short. I hope Ambassador
Yeutter finds the background on' the political
situation in each EC country useful for his West
European trip. If we can be of any further assistance,
don't hesitate to call me. I can be reached on
Deputy Chief
Western Europe
26 August 1985
E U R A
Office of European Analysis
Distribution:
1 - DDI Registry (7E47)
1 - ExDir
1 - NI0/WE (7E62)
1 - 0D/EURA
1 - DC/EURA/am
2 - EURA Production Staff
4 - IMC/CM
1 - C/EURA
1. - Division i e
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Political Updates
on
EC Countries
(Countries are listed by order
of GNP level)
EUR M85-10150
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lvt:5L ,r:?mCI ny
The governing parties have recently patched over differences
on several issues--tax cuts, social legislation, and jobs
creation programs. While unemployment remains doggedly high, at
over 2 million workers, inflation is low and GNP growth is a
moderate 2.5 percent. The press has speculated that the
Christian Democrats may replace Kohl with another candidate, but
id
s
we cons
er thi
unlikely. The party has no obvious alternative
and any challenger would provoke bitter infighting.
France
President Mitterrand's Socialists have enjoyed an absolute
majority in the National Assembly since coming to power in May,
1981. Although the government originally followed expansionist
economic policies -- which led to accelerated inflation and an
increased current account deficit -- it reversed course in mid-
1982. Since then, slower growth has reduced inflation and
increased unemployment, and with the improved world economic
climate the current account has moved to near balance. Despite
the improvement in some economic indicators, public hostility to
the Socialist government has grown; voters have rejected leftist
candidates in.,municipal and regional elections, and polls show
that Mitterrand has become the most unpopular president of the
Not s.uror3sana1vtnr+r~.,,.;...wL. -,_~J,A
on a weep
a conservative . overnment and .Mi,:tterrand_., whnae tar.m .aYari:,.~~.., ?? ..;:
n sca,r,dians -are Iike.l.y to win a majority of seats. This`
could force an unprecedented constitut'iona-l rnnfrontati b t
I eyisia,z;!ve :exec-tions. The opposition parties-=Gaullists,
d f - '
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opp d r (' ommitteed tO
continuing their austere economic policies and will probably
attempt -- but we expect will not succeed -- to engineer a
coalition of moderate leftists and centrists to form a government
after the electio,-s. In_.add_itio_n to the govern4e-nt1 -s o-th-er
problems, recent Hess revelations about French intelligence
involvement in bombing the Greenpeace ship Rainbow Warrior in New
Zealand last month have rocked the government an are i ely to
result in high-level dismissals and resignations.
25X6
Italy
Socialist Prime Minister Craxi's five-party government-
Christian. Democrats, Socialists, Republicans, Social Democrat's,
and Liberals -- passed the two-year mark in mid-Auqust, making it
n n P of Tta1 %,l a ,.. --,.,. 1..-4 s_ _
IV or-ms of thewage
indexation program.
ren um
to repeal recent oovernm - d f'
ion-wi a-. MU" 1,C, .p a.1
elections 'and..de.feated a Communist-inspired national ref d
yr ...r w - . . .. ....... ~. r.~> >..a.'- - C. I a IC.'
dpp,asitionary - a strong setback nat' 'd
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i r' on
(, t ;l
Communists also threatens to brinq to the fore longstandinq
disagreements and rivalries among the governing partners. The
Christian Democrats and Republicans, the two biggest gainers in
the municipal elections last springs have-be-g-un --to `cafe under -
Craxi's leadership. A number of Christian Democrat _ leaders are
convinced that their party's new vitality at the polls entitles
them to renew their claim to the premiership. The Republicans,
on the other hand, increasingly are unhappy over the government's
handling of the economy and insist that Craxi must work harder at
reducing the State deficit and improving the collection of
taxes. Some of these issues could come to a head when Parliament
reconvenes at the 'end of September. Discussions of next year's
budget will be particularly difficult because of the divisions
within the coalition on economic policy, and a shuffling of
The Netherlands
The government of Prime Minister Ruud Lubbers has been in
power since November 1982, and it probably will survive until the
next general election, due May 1986. The center-right government
is composed of Lubbers' Christian Democrats and Liberals, who
together command a slim four-seat majority in the 150-member
Second Chamber. The Labor Party, traditionally the largest in
the Netherlands, controls 47 seats and is projected to win a
plurality in.th_e general election next year.
The principal problem facing the Lubbers cabinet is whether
.it should accept cruise missiles. The government has said it
will make a decision on 1 November and presently is leaning
toward accepting deployment. Nonetheless, a majority of the
Dutch are against deployment, and many Christian Democrats fear a
".yes" in November probably will give the opposition Labor Party a
potent campaign issue. The Lubbers government is also struggling
with a huge public debt and a bloated public sector. The
government's austerity measures appear to have turned the economy
around to some extent but unemployment, at 17.2 percent, remains
a problem.
Re1gium
e
m s and rancophone Social Christians and Liberals,
controlling 113 seats in the 212-member Lower House. The
.J .....' ._
Martens,. a' Fl .1.,11YCU
eming, is holding together a shaky coalition of
Fl
i h
a r ;q-, r?: S, , I ~,,.y u -~ ~: c, ,~ .a e r 1 n 1, U .r. i em i s n. (U U 1;,c
tl ?;
Fre.ncfi~speaklng regi.ons,' and .this div.is o.n infuses all s: u
....... 1
n n .r. t.. T
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agree on major issues; consequently they do not pose a major _q il 11
challenge to the ruling coalition at the moment. Recent opinion
polls show the Martens government losing ground, but the chances
are better than even that the current coalition will return to
Power ter the general election, scheduled for 13 October.
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The Martens government accepted 16 cruise missiles in March,
thus effectively defusing the INF issue in Belgium. The
electoral campaign in the runup to the general election is likely
to focus on communal and economic issues,. particularly on the
austerity measures imposed by the government. The economy has
recently shown modest growth, but Wa1lonia (Frenchspeaking) in
particular remains depressed. Unemployment, at 13.5 is
the main economic issue facing the government. 25X1
Denmark
Denmark has been governed by a Conservative Party-led
minority coalition under Prime Minister Poul Schlueter since
September 1982. The coalition -- which also includes the
Liberals, Center Democrats, and Christian People's Party -- holds'
79 out of 179 seats. The government has a voting majority on
most economic issues due to the support of the centrist Radical
Liberal Party (RV). On foreign policy issues, however, the-RV is
less likely to-back the government, thus enahlinq the opposition
Social. Democrats -(SDP), the nation's largest party, to paralyze
government decisionmaking. Although the SDP supports NATO.
membership and good relations with the US, it also wants a Nordic
nuclear free zone and opposes INF deployment and SDI
participation. 25X1
The Schlueter government's popularity has grown durino the
past three years, while that of the SDP, Denmark's traditional
ruling party, has dropped due to weak leadership and internal
infighting. Since 1982 the government has revived the stagnant
economy, but has been less successful in reducing Denmark's
current account and budget deficits. The coalition government
probably will'be able t fice until the next election
in 1987 or early 1988. 71 25X1 ,
Greece
Andreas Papandreou is the leader of Greece's 'firs't socialist
government and h
d
ea
s the Panhellenic Socialist Movement
(PASOK). He was first elected Prime Minister in October 1981 on
a strongly nationalistic platform which included withdrawing
Greece from NATO'and removing the US -bases from Greece. While
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the_ c ' I a ; I t 1 Y r e I d i. ~ 0 1 1 S 4V i L Lil 1c sL 'i:1Vt ',U i i vt'ii +:l
Papandreou, the foundations have remained intact. He signed a
Defense and Economic Cooperation Agreement with the US in 1983
and has not removed Greece from NATO or the EC. In June of this
year he was reelected on a considerably watered down platform and
his victory was so decisive as to free him of the need for
Communist support.
During Papandreou's second term, the economy is likely to be
his major problem. InflatioM is already three times the average
of Greece's EC partners, unemployment is rising, and a growing
foreign debt may force Papandreou to seek debt rescheduling. We
do not expect Papandeou to implement a major austerity program
because it would hurt his most important constituents -- farmers
and blue-collar workers. He may, however, seek better relations
with the US to attract new investment and restore business
confidence.
Ireland
The current centrist government of Prime Minister
Garret FitzGerald has been in office since 1982. The coalition ?
is composed of the Prime Minister's Fine Gael Party and the Labor
Party, which together control 86 out of 166 seats in Parliament
(Fine Gael has 70 and Labor 16). A general election does not
have to be held until November 1987, but the current coalition
will be hard pressed to last its full term. The latest opinion
poll shows the coalition trailing the opposition Fianna Fail
party by 14 points.
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25X6
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Prune Minister lacqur,s Santee has lead the center-left.
cn,1lirinn ;inc0 June 19q'r. Nis Christian Social Party r.nnI- rul,
25 seats ire the Chamber f Deputies and joined with the Socialist
Party, controllinq 21 s +s, to form a majority. Although
tensions have recently risen between the coalition partners over
foreign policy issues, the government will probably last out its
full term -- the next general election does not have to be called
until June 1989. Socialist leader and Foreign Minister Jacques
Poos is more critical of US policies on arms control in the Third
World and sometimes irritates his Christian Social partners with
Santer's major foreign policy problem is his inability to
obtain a civil air agreement with the United States. The Prime
Minister has been pushing hard for a favorable accord which he
believes Luxembourg deserves in return for being a loyal ally of
the United States. Santer is also concerned about Soviet
attempts to use Luxembourg as a transshipment point for
restricted Western technology. Luxembourg officials are
particularly worried about growing US-EC trade tensions and
probably will press other EC countries to compromise on trade
issues -- Luxembourg holds the Presidency of the EC until
-7-
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