WEEKLY SUMMARY #12

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002000120001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: April 12, 2013
• Sequence Number: 1
• Publication Date: July 30, 1948
• Content Type: REPORT

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~ WEEKLY SUMMARY
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Number 12
Document No. Q Q 1
NO CHANGE in Class. 0
j' DECLASSIFIED
Cass. CHANGED TO: TS S C
DDA Memo, 4 Apr 77
Auth: DDA R'3C.. 77,117 ^z
Date : J&j-.LU- B7; 6-2- -1
CENTRAL INTELLIGENCE AGENCY
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1. This publication contains current intelligence exclusively
and therefore has not been coordinated with the intelli-
gence organizations of the departments of State, Army,
Navy, and Air Force.
2. This copy may be either retained, or destroyed by burning
in accordance with applicable security regulations, or
returned to the Central Intelligence Agency.
This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C., 31 and 32, as amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
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C O N T E N T S
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Page
HIGHLIGHTS ......................
1
WESTERN EUROPE ...............
3
EASTERN EUROPE ...............
7
1
1
NEAR EAST'- AFRICA ............ 10
1' AR EAST ........................ 13
WESTERN HEMISPHERE ......... 15
APPENDIX ........................ i
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li 1 G B L I G B T S
Germany held a pore-eminent position in this week's
developments, as the atoc of the world awatted the outcome
of the Moscow talks. A far-reaching political and economic
reorganization is under my in the Soviet Zone that might lead
to the establishment of an east-German Satellite state. to ; ny
event, the implementation of this extensive reform program
would present severe dtdUiculties to any future economic into-
Lgratioo of the eastern zone with that of the western zones (see
page 3). In the western zones, the Berlin crisis appears to
be unifying non .Co rn=uni t political parties in a feeling they
have a common responsibility to strengthen western Gernrmy
;%n!! tug ultirn teiy to help the eastern zcne. Concurrently,
l c sever, a .rowing moncy shortage, resu tang from the recent
.cnstary reform an' a slov loping desire to reduce occupation
controls have led to Increased western German agitattce to
reduce occupation costs.
In Frmnce, the life of the Marie Government is in the
balance while the Assembly debates Reynud's economic pro-
tnam (see page 4). Italy continues reluctant to align itself
wholly with the western powers (see page 5).
At the Danube Conference, the USSR is employing
bullying tactics which make clear the Soviet akin to utilize
this conference to establish the legalistic right of the Soviet
bloc to control Danube shipping (see page 9). Within the
Soviet Union, responsibility for internal security is gradually
being shifted to the Ministry of State Security (MGB) and
away from the Ministry of Internal Affairs (MVD); in par-
ticular, the MGB will apparently assume intelligence func-
tions, while the MVD will be charged with purely adminis-
trative controls over the Soviet population and the' use of
the forced labor pool (see page 7). Elsewhere in Eastern
Europe, the Greek Army made important gains against
stubborn guerrilla resistance.
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In Palestine, Zionist intransigence is greatly com-
plicating the existing difficulties in evolving a solution to
the Arab-Jewish issues (see page 10).
The strike ban for Japanese Government workers
may seriously weaken popular and party support for the
Ashida Cabinet (see page 13). In Mukden, increased agi-
tation for a Manchurian regional government offers further
evidence of the disintegration in Nationalist China (see
page 14).
In Latin America, Argentina's reported expansionist
designs have alarmed its neighbors, especially Brazil;
concurrently, Soviet influence In Argentina has been in-
creased by recent commercial agreements between Argen-
tina and certain of the Satellites (see page 15).
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WESTERN EUROPE
GERMANY
A far -reaching political and economic reorganization
now is under way in the Soviet Zone. The German Popular
Front, the original Soviet--sponsored political organization,
is being abandoned in favor of a group of political parties com-
pletely loyal to Communism and backed by reliable Commu-
nist police. Leaders of the Christian Democrats and Liberal
Democrats, both members of the Popular Front, are being
liquidated or eliminated. Members of these two irties are
Toeing herded into the National Democratic Party and the
Farmers' Party, both headed by Mo.cow -fraud German
Communists. The Socialist Unity Party (SED), upon which
the USSR will rely to control an eastern German Satellite
state, is being reduced to a compact organization responsive
to Cominform direction. The economy of the eastern zone,
with its arrangements for Soviet control and exploitation,
now resembles that of the Satellites. The former German
Central Administration concerned with economic affairs is
being subordinated to the SED-dominated German Economic
Commission. Industrial combines, which are responsible to
zonal authorities instead of to officials of various states in
the zone, will direct nearly all industrial activities. The
dominance of state-owned or controlled enterprises will spell
the eventual elimination of effective competition from privately-
owned business and will simplify central control of the economy.
Control in the agrarian field will be effected through the poli-
tically-sponsored peasant cooperative movement, which operates
to the disadvantage of the independent farmer., When these ex-
tensive reforms are completed, integration of the eastern zone
economy with that of the western zones can be accomplished
only with extreme difficulty.
Increased western German agitation to reduce occupation
costs is based upon a growing money shortage resulting from the
recent monetary reform. Western German politicians, who
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GERMANY
complain of an "intolerable burden" in occupation costs of
5 billion Reichsmarks, maintain that solving economic prob-
lems resulting from the currency reform is more important
than accepting the London Agreements for a western German
government. While some of the agitation may be discounted
as being directed toward the German population for political
purposes and toward the occupation authorities for bargaining
purposes, the rising criticism is also being fed by a strong
German desire to reduce occupation controls.
FRANCE
The life of the Marie Government will be in balance
when the French Assembler deliberates on Reynau s eco-
nomic prcgram. Reynaud s request for sweeping economic
powers for an 18 month period meets with the approval of
Marie, although both the Socialists and the MRP fear that
Reynaud will probably not favor labor at the expense of other
sectors of the economy. If the economic powers requested
by Reynaud are not granted, he has said he would resignwhich
would probably precipitate another government crisis. If
Reynaud is given the economic powers he feels are necessary,
the main danger to survival of the Marie Government would
be the possibility of renewed Socialist intransigence, which
may arise as a part of preparations for the elections in the
fall. The greatest factor favoring the Marie Government is
the general realization that the fall of another coalition gov-
ernment would greatly strengthen the position of De Gaulle.
Assembly debate on the Franco-Vietnamese Agree-
ment will probably delayed until after the August recess
in order to avoid an early and risky test of government support.
The Socialists have recently demanded that broad concessions
be made to the Vietnamese and, in order to avoid any Socialist
interference at this time, Premier Marie might resent the
agreement to President Auriol for "ratification" soon after
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FRANCE
the Assembly recesses. High Commissioner.Bollaert, who
negotiated the agreement and who has insisted tbt the
4ssenibiy approve the projected inclusion of Cochin China
in the unified Vietnam state. might reluctantly accept the
presidential "ratification" until Assembly action can be
obtained. Although a presidential "ratification" could give
temporary prestige to the provisional Central Vietnam Gov-
ernment in Indochina, effective implementation of the terms
of the agreement can be achieved only after Assembly ap-
proval.
MIX
lie's relucnce to align itself with the western
powers is not surprising in view of the fact that in. the recent
national elections only about half the Vote actively endorsed
the pro-I; stand of the De Gasperi Government. The Italian
people feel that they are helplessly caught in the machinations
of two competing powers jockeying for position, either one of
which would sacrifice Italy's interests to gain a strategic ad-
vantage over the other. Most Italians consider Italy is cultur-
ally a western nation; however, many of them think neutrality
is preferable to an alliance with what they are convinced can
be only "token" western forces opposed by the concrete might
of the USSR. Now that Italy is assured of benefits from the
European recovery program, many Italians believe that Italy
should take pains to establish advantageous economic and
political relations with the USSR. Also, the European recovery
program has generated opposition in the extreme right because
of dissatisfaction with East-West trade controls. Although
Republicans and democratic Socialists have staunchly defended
the European recovery program, they have shied away from
economic strings or military commitments.
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UNI D KT DQ4,
P is a result of the rlLn (risis British de i
do . x.raa be halted any. :taro c! tire military position is
presently being re-examined. AiVhcigh the III,[ isntenth to
stand firm in its negot lions witin the USSR, implicit In
Foreign Secretary e"v'hn's r cent : ta.ter1ent concornt g a'e-,
e; a.rna cation of Britain's rmilitary position is an a.clo owledged
stag of unpreparedness which could scarcely be remedied
in time to meet an early crisis. The Government's i reoecupa,-
ttc n with UK economic problems has led to the reduction of
military forces below the levels considered adequate for
strategic requirements by fl t? r 7 leaders. An appr?ectabl.e
increase in British troop.streaagtai, however, and diversion
of industrial capacity to the production of military equi.p._
went wciid involve a drastic revision of the British economic
program. For this reason, the government would undertake
to remedy present military deficiencies only with the utmost
reluctance.
SC AND1NA VIA
Comma nist stren a in Scandinavian labor uaai