FACTS BEHIND PRESENT ECONOMIC SLUMP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R002000130001-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: February 22, 1999
• Sequence Number: 1
• Publication Date: April 14, 1955
• Content Type: REPORT

Approved For Release 19 9/ 9/24: CIA-RDP83-00423RO0200013Q 1-4
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PREPARED AND DISSEMINATED BY
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CENTRAL INTELLIGENCE AGENCY
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COUNTRY
REPORT
Belgium
SUBJECT
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DATE DISTRIBUTED
Y. ~ U Jun 55
't Facts Behind Present Economic Slump
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RESPONSIVE TO
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DATE OF INFORMATION (Date or dates, on or between which,
events or conditions described in report existed)
Mar 55
SOURCE
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1. It is of special interest at the moment March 19557 that while
all other countries in Europe are experiencing greater and greater
prosperity, Belgium appears tohave arrived at a point of general
economic stagnation. This is very significant.
2: The facts are that Belgium's factories and productive equipment were
little damaged during World War II. At the war's end, the heavily
damaged countries placed large orders for goods in Belgium. The
country enjoyed unprecedented prosperity. Belgium obtained business
particularly from dollar-short countries which did not have the
currency to buy in the US. Belgium earned lots of dollars too,
especially from Latin America where lower import duties than prevail
in the US kept some Belgian products more competitive than they would
be in the US. So Belgium has built and Belgium has bought and
Belgium has provided itself with more US autos, phonographs and other
equipment per capita than any other European country. Oddly, Belgium
has not invested much in new plant facilities.
3. During the past three years or so, Germany (FR), the UK, Sweden,
France, the Netherlands, Norway, and Denmark have made good progress
in their economic rehabilitation efforts. Italy too, is producing
more. Business is at or near peak prosperity levels in most of these
countries at the present time. It is growing. In Belgium, business
has leveled off. The rate of business in Belgium is still high but
Belgium's terms of trade are negative. This means Belgium is living
beyond its means. It is buying more than it is selling. If the
siutation continues, Belgian purchases of US manufactured goods are
bound to taper off. Coin-operatee phonographs will be among the
first to be hit, if they have not been already.
4. The reasons for the situation are many. Among them is the fact that
much of Belgium's productive equipment is old. In the countries
where there was war devastation, the productive equipment, in a large
measure, is new. New equipment means higher productivity. Germany (FR),
Italy, Netherlands and other countries now can outproduce Belgium
per machine and per man hour in many fields. On top of it all,
Belgian costs are generally higher than that of other European
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 Approved For Release 19%V/ 19/24: CIA-RDP83-00423R00200013Q, 1-4
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countries. Belgian products, therefore, are not as competitive as
many from Germany (FR), the UJK, Netherlands and Italy.
5, A move is underway in Europe today to free trade among Western (OEEc)
European countries up to at least 90% of the list of products produced
by each of them. The tendency and foreseeable trend, therefore, is for
more intensive inter-European, trade. It is, in part, an answer to the
uncertainty prevailing within these countries over long range access to
dollar markets.
There is no solution which will be satisfactory to all parties concerned.
However, the solution which will protect the company's interests to the
maximum and, long range bring the greatest possible returns, is the best
one. It seems to me that other coin-operated phonograph manufacturers
have acknowledged this principle by licensing manufacture in Europe.
Such a move is not in the direct interests of the US export firms which
handle the sale of machines to foreign countries. It is a solution
which likely they oppose. But what alternative is there? Procrastination
can spell losses. One does not want to be too late in getting into
the newly expanding inter-European markets.
PE ACT-BATE HIfe-TIR M1E Us
This unevaiuated information is suppi' A2g
the possible interost of your anaiy
does not warrant dissemination by
report.
Approved For Release 1999/09/24: CIA-RDP83-00423R002000130001-4