CZYREK'S VISIT: WARSAW'S PRESSING AGENDA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00114R000302830001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 27, 2016
• Document Release Date: March 7, 2012
• Sequence Number: 1
• Publication Date: March 3, 1987
• Content Type: MEMO

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DOC NO Z
OIR 3
P & PD J
DIRECTORATE OF INTELLIGENCE
3 March 1987
Czyrek's Visit: Warsaw's Pressing Agenda
The Jaruzelski regime is pleased with the lifting of US
sanctions, and now wants to test quickly US willingness to take
concrete steps that will result in real economic gains. Politburo
member Josef Czyrek's visit to Washington represents the highest
level bilateral talks here since martial law was declared. The
high-level congressional and administration appointments set up for
Czyrek are viewed in Warsaw as indicating Washington's intention to
fully normalize relations and cooperate in helping Warsaw achieve
its broader goals.
Czyrek probably will present a list of specific requests for US
economic assistance, especially for debt relief and new credits. To
buttress his appeal for US assistance, he will highlight several
"positive" political developments, such as the creation of new
institutions that the Poles claim will encourage broader
participation in the political process. Czyrek is likely to insist,
however, that Warsaw will proceed at its own Pace and with clear
limits on its toler
ance of dissent.
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was requested by Mr. Martin Weni k i,uLVYCdrl tinalysls.
D
Affairs, State Department. Comments
andcquestionssareuwelcome and
should be addressed to
Division Chief, East European
EUR-M-87-20028
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Central Intelligence Agency
This memorandum was Prepared by
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Czyrek's Goals and Approach
Czyrek is the ranking foreign affairs expert in Poland and
reportedly the most influential civilian in the Polish party. His
close ties to Jaruzelski and his reputed high standing in Moscow
make him an ideal emissary for the delicate task of convincing US
officials that Poland's political liberalization is genuine and
further political concessions should not be necessary to obtain
Czyrek will argue that Poland, for its own domestic purposes, is
irrevocably committed to broad political dialogue and national
reconciliation; he will point to the Social Consultative Council,
which met for the second time last Friday, as proof of the regime's
determination to broaden its political base. We believe Czyrek, who
has a reputation for avoiding confrontation, will seek to fend off
US criticism of the regime's political record with protestations
that reform takes time and that the "new team" led by Jaruzelski is
o
i
d
pen m
n
ed about further reforms.
Czyrek probably views his main task as shifting the focus of
US-Polish bilateral contacts from Polish political matters to
measures for rebuilding Poland's depressed economy, and to make a
personally favorable impression so as to build a US constituency for
economic assistance -- especially measures to deal with Poland's
serious financial problems. In keeping with the regime's repeated
assertion that the formal repeal of US sanctions should be
accompanied by positive actions,, we expect Czyrek will present a
list of specific requests for US economic assistance, probably
including:
o Debt Relief Warsaw wants US support for a long-term solution
to Poland's current stalemate with the Paris Club over 1986
and 1987 maturities. Warsaw may seek to reopen bilateral
rescheduling agreements to obtain more concessionary terms --
including greater US flexibility on repayment schedules and
reduced interest rates on arrears.
o Softened Conditions Warsaw probably will ask the US to use
its influence within the IMF to secure softer IMF conditions
in negotiations over a standby agreement expected to begin
this year. The Poles probably are'interested in extending
the time periods for meeting proposed IMF conditions,
especially on price reforms, currency devaluation, and
increased current account surpluses.
ILLEGIB
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o New Credits The Poles will lobby for new CCC and Ex-Im Bank
credits arguing that open credit lines are necessary to help
the Polish economy get back on its feet. Improved domestic
grain production in recent years will reduce Poland's need
for CCC credits, but vast capital goods import requirements
may prompt the Poles to table requests for larger Ex-Im
credits, which were relatively small prior to 1981. Czyrek
may also complain that reserve margins required on US bank
loans to Poland discourage new commercial lending.
o S & T Cooperation Warsaw will pursue a generous US
contribution to the Science and Technology cooperation
agreement currently under negotiation. Poland desperately
needs assistance in development of high technology industrial
processes, environmental research, pollution control, and
medical reseach and development. Environmental assistance
could be the politically most cost effective US aid to
Poland. Ecological programs would be a relatively
inexpensive, highly visible means for providing assistance
that would improve the lot of average citizens while pointing
out a fundamental shortcoming of the Marxist economic system
-- its inability to deal effectively with the negative social
consequences of rapid industrial development. Environmental
assistance would also provide opportunities US business
in areas of nonsensitive technology. ~ or-1 25X1
Warsaw has publicly asserted that the sanctions had a direct
cost to Poland of more than $15 billion. Restitution of this amount
has been one of the Polish preconditions for a normalization of
relations with the US. The Czyrek delegation may use this figure as
a starting point in appealing for US assistance.
The Polish estimate is based on highly questionable methodology
and is greatly exaggerated. Analysis of Western trade data
indicates that Polish exports to the United States -- and other
developed Western countries -- began to decline sharply prior to the
suspension of Poland's Most Favored Nation (MFN) status on 1
November 1982. Slumping industrial production caused by domestic
political unrest and the inferior quality of Polish exports, rather
than the repeal of MFN status most likely accounted for the decline
in exports to the West. The ban on official credits undoubtedly
reduced Poland's access to hard currency imports used in export
production, but Poland's abyssmal creditworthiness almost certainl
would have choked off the flow of new credits anyway. 25X1
Defending the Regime's Political Record
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Aware of the de Facto linkage of economic aid to continued
liberalization, Czyrek will highlight several "positive" political
developments in Poland for his audiences by arguing that:
o Poland is already a pluralistic society due to the
government's persistence in creating new institutions and
"platforms" designed to encourage genuine political dialogue
with all social sectors.
o "New initiatives" such as the national ombudsman program
currently under discussion in Poland show-that political
liberalization is an ongoing process.
o Church-State relations are "good and improving," and
therefore demonstrate that Poland has room for Catholics as
well as Marxists. It is possible that the regime will soon
reach a fundamental accomodation with the Church --
exchanging legal recognition of the Church for Church
cooperation with the new "reform" institutions and muting of
its politically active clerics.
o The new trade unions have replaced Solidarity as the watchdog
of worker rights and are gradually gaining acceptance in the
workplace as they show their willingness to oppose government
oli
i
d
p
c
es
eemed injurious to worker rights.
As a corollary to an upbeat focus on the future, Czyrek can be
expected to repeat regime arguments that the Solidarity era is over
both for the union and the government. In the regime's view, it
took the tough step of repudiating the party's past mistakes and it
has no intention of repeating them. The regime's political appeal
to the US should thus, according to spokesmen like Czyrek, rest on
the regime's efforts to make new beginnings which the US also wishes
and whi
h f
c
avorable US attitudes can abet.
By noting that the Solidarity era is over, the regime is
signalling that there are clear limits to its toleration of dissent.
Czyrek will insist that the government earnestly hopes to avoid new
arrests and trials and, in deference to domestic and foreign
political pressures, will ignore minor irritants by the opposition.
He will attempt to trivialize the government's tactics of punitive
fines and property confiscations aimed at keeping the lid on
opposition activity. If pressed, Czyrek will likely argue that such
fines are lenient and justified measures which the government must
use to maintain social peace and which should not offend US
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- --
s
s
t
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Czyrek may convey Warsaw's readiness to deal with specific
political issues. He could, for example:
o Indicate that the regime will "review" the treatment of the
Krakow-7 "leaflet bombers", widely regarded in the West as
the last "political prisoners." in Poland. Quick action on
the case, however, is unlikely, lest it appear Poland "caved
in" to foreign pressure.
o Show a forthcoming attitude toward the postponed visit by
Senator Kennedy, if it is conducted "privately."
o Offer in the regime's name new willingness to cooperate on
terrorism and narcotics trade.
o Welcome a "balanced" visit by AFL-CIO leader Kirkland.
o Submit an agenda of political visits and cultural exchanges
to maintain the momentum of US-Polish dialogue.
o Offer to settle any outstanding access problems for USIA
activities in Poland.
Outlook
The removal of US sanctions has improved the political climate
and bolstered somewhat the confidence of Western businesses and
banks to increase commercial ties with Poland. Advertising
expenditures and representative office openings by Western firms
have reportedly grown rapidly in recent months. Warsaw is now
reportedly in the final.stages of negotiations with Italian and
Japanese automobile makers over a $1.3 billion project to modernize
the Polish automobile industry. Such a deal would mark the first
major official credits granted to Poland since 1981. The West
Germans and others may offer Poland additional limited credits as a
gesture of approval for recent political developments. 25X1
Despite marginal improvements in economic relations with the
West, Poland will continue to face serious economic problems for the
next few years, ensuring that the US will retain some leverage for
influencing political developments. As long as it is in arrears,
Warsaw is not financially eligible for US government credits, and
few other lenders will be interested in making new loans at a time
when Warsaw is trying to reschedule existing committments and has
not yet concluded an IMF standby agreement. Many creditors probably
believe that in the absence of major economic reforms, new credits
would only worsen the already unmanageable debt problem. 25X1
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We do not believe that restoration of MFN status will bring
about a significant increase in Polish exports to the US in the near
term. The Poles have done little to modernize their economy,
develop new products, or improve product quality and marketing
techniques, making it unlikely that Warsaw will recover markets lost
to more competitive Newly Industr-ializing.Countries._ Moreover,
continuing financial problems will restrict Warsaw's ability to
obtain the hard currency required to boost export production.
According to Poland's deputy foreign trade minister, exports to the
US should expand by $30-$50 million annually over the next two
years. Consumer goods such as clothing, footwear, and glassware
b
bl
f
pro
a
y o
fer the best prospects for export increases.
The regime will not share political power with its opponents,
but we think it will continue its search for symbolic and cosmetic
reforms which it believes will broaden its appeal and thus help it
sell its economic reform program. The opposition probably hopes the
normalization of ties with the US will make repression by the regime
more difficult, creating more room at the margins for it to
maneuver. To the extent that it articulates popular and viable
economic and political options to government policy, the opposition
will be able to keep genuine domestic pressure on the regime to
maintain its gradual pace of reform. The Church may increasingly
stake out a middle ground -- between the party and Solidarity and,
with the right inducements, may cautiously back some regime efforts
-- such as the Consultative Council -- to reach national
ILLEGIB
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SUBJECT: Czyrek's Visit: Warsaw's Pressing Agenda
External Distribution:
Mr. Martin Wenick
Director, Eastern European Affairs
Room 5220
Department of State
Mr. Thomas W. Simons
Deputy Assistant Secretary for European Affairs
Room 6219
Department of State
Mr. Richard Solomon
Directory, Policy Planning Staff
Room 7311
Department of State
Ms. Rozanne Ridgway
Assistant Secretary
Room 6226
Department of State
Mr. Barry Lowenkron
Policy Planning Staff
Room 7316
Department of State
Mr. Fritz Ermarth
National Security Council Staff
Room 368
Old Executive Building
Mr. Walter Raymond
National Security Council Staff
Room 351
Old Executive Building
Mr. Harvey Shapiro
Deputy Director, Office of East-West
Trade Policy
Room 4450
Department of Treasury
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SUBJECT: Czyrek's Visit: Warsaw's Pressing Agenda
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