WESTERN EUROPE BRANCH OFFICE OF REPORTS AND ESTIMATES WORKING PAPER BRANCH WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400010014-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 14
• Publication Date: September 13, 1949
• Content Type: PAPER

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`WESTERN EUROPE FRANC H
OFFICE OF REPORTS AND .ESTIMATES
CENTRAL INTELLIGENCE AG , TCY
WORKING PAPER
BRANCH VJEEKLY
NOTICE: This document is a working paper,
N(I an official CIA issuance. It has been
co-ordinated within ORE, but not with the
IAC Agencies. It represents current think-
ing by specialists in CIA, and is designed
for use by others engaged in similar or
overlapping studies. The opinions expressed
herein may be revised before final and offi-
cial publication. It is intended solely for
the information of the addressee and not for
further dissemination.
DATE: 13 September 1949
DOCUMENT NO,
NHANGE IN CLASS.
CL14SS. CH.AGED-re: TS S C
NEXT REVIEW DATE:
RUTH: .~
DATE/ ` REVIEWER: 372044
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1Y1ES1ERI'T ElJJIOPE A)RA1TC11
WEEKLY SJ -STAI T
VOL. V - No. 9
25X6A
For week ending
13 September 1949
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 5X6A
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S E C R E T
25X6A
The failure of the deruties to reach agreement
on the Aus ran. treaty by l Sep ember poses two immediate
problems: (a) what procedure can be found for continuing
the treaty talks? and (b) what note can western propa-
ganda on the treaty most effectively strike?
A Soviet reply has not yet been received to the
proposal for reconvening the deputies on 22 September in
Few York. The Foreign Ministers will be in New `Fork at
that tine, and the western powers made their proposal in
the hope that they might thereby continue the calks with-
out delay and yet avoid the necessity of a foryi tl Council
of Fo. eign Ministers.
r1ost Austrians are in favor of any procedure
which will bring them a prompt treaty. Foreign Minister
Gruber, however,, wishes that western propaganda would
lay emphasis, not on the obstacles to agreement found in
Soviet economic demands, but on the progress made in
London and on the prospects for future agreement,
Gruber"s view is a reflection of an attitude shared by
other Austrian officials who prefer a treaty now, even if
it means conceding present soviet economic terms. Western
opposition to the Soviet demands in rega-d to the oil and
ship?;In,,; properties, based as it is on technical considera-
tions, is not as readily understandable to the Austrians
as ' was western resistance to the ?`'ST on the subjects of
frontiers and reparations. The Austrians feel that a
treaty is close, and their impatience with the deta'led
ha?,fling is presently being encouraged by Soviet pxropa-
ganda.
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Another French national labor federation (the
predominately rlgh.Ulst-led Genera Confederation of
Independent Unions--.CGSI), will be formed in October
and will increase the resistance of non-Communist labor
to the political objectives of the Communist-led General
Confederation of Labor (CGT). The core of the new move-
ment is a rapidly growing federation, "Work and Liberty,"
whose leadership was ostensibly purged early in 1949 of
Vichy sympathizers. Although the CGSI will not oppose
joint strike action this autumnp its leaders have declared
their intention of fighting vigorously any indulgence by
the COT in political slogans or actions. Meanwhile, the
CGSI will seek to: (a) consolidate existing independent
unions; (b) pirate Communist as well as non-Comrmanist
unions from the COT; (c) attract dissident Communist
militants from the CGT, thus promoting its break-up; and
(d) overcome the independence of the Socialist-oriented
Force Ouvriere (PO) in order to effect an eventual merger.
organizers of the CGSI claim the backing of 613
local unions with 200,000 members. This represents only
about one-fifth the numerical strength of the FO and less
than one-tenth that of the COT. The "Work and Liberty"
group, however, has won over most of the aggressive
Gaullist "labor action" groups, has expanded its member-
ship 50% in the past year, and may be expected with its
experienced leadership to exert a considerably greater
influence than the relative numerical strength of the
CGSI would suggest.
France's increased productiviI_tZ (output per man-
hour) is 1 e y .o be ma t-a3riec~t oughout 1949, even if
industrial production declines as expected for the second
half of the year because of strikes and consumer resistance.
During the first half of this year, when production
(exclusive of building) hit an all-time peak, productivity
ran about l0'' over the corresponding period last year.
This increase represents a major step forward in the long-
term programs for raising living standards and boosting
exports. The achievement, however, has not been spread
evenly through all lines of industrial activity; produc-
tivity in the heavy industries has risen more than in con-
sumer goods industries, especially textiles.
The over-all industrial schedule under the Four-
Year Program calls for a 100'1' increase in production each
year from 1948 to 1952. This must be met almost entirely
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by improved productivity because neither the total
number of employed workers nor the length of the
work-week can be appreciably increased. Greater
productivity is, moreover, the key to any substantial
reduction of unit production costs, which is essential
for a rise in real wages and improvement in France's
competitive position in world markets,
B An evolution in French policy in recent weeks
will facil a e Ggn-eral Assembly agreement on the dis-
position of Tripolitania (northwest Libya), France,
heretofore seriously worried by such steps in Libya as
the British grant of self-rule to Cyrenaica (northeast
Libya), is now willing to agree to the establishment of
an advisory committee for Tripolitania to prepare the
area for complete independence. France, however, will
press for a Tripolitanian preparatory period of unspeci-
fied length, believing that if a time limit is fixed,
the General Assembly will not favor a term as long as
five years, which France feels is necessary. Although
accepting the principle of eventual independence for
Libya, France believes that the question of unification
of the former Italian colony should be considered
separately. The French will endeavor to ward off the
establishment of a united Libya under a strong religious
ruler such as Sayid Idriss al Senussi, Emir of Cyrenaica,
whose influence extends beyond his state and would under-
mine French control of Tunisia, Algeria, and Morocco.
FR12TCH AND SPANISH NORTH AND WEST AFRICA
C The.recurrent efforts b Habib Your iba, former
leader of e Tunisian nationalist eo-Des our
(Constitution) Party and self-exiled in Cairo since the end
of 1946, to promote US support for North African indepen-
dence are again under way. 1'dith every session of UNGA,
I3ourguiba revives his activity, and as in 1947, he plans to
visit the US in another attempt to evoke the interest of
the assembled delegates in liberation from French control
of his native Tunisia and its neighbors to the west, Algeria,
and Morocco. Bourguiba's prolonged absence from Tunisia
and the failure in Cairo of the Committee for the Liberation
of North Africa to accomplish anything positive in the three
years of its existence, (largely because of the lack of help
from the Arab League) have greatly lowered F3ourguuiba e s
prestige and will weaken his influence in promoting North
African independence.
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Realization of his position may induce
Bourg iba to change his mind about visiting the US,
and return Instead to Tunis, whe-,e he would risk
arrest for having departed illegally three years ago.
Bourguibats intention to reinvigorate the nationalist
movement in Tun .isia, which is decaying for lack of
forceful leadership, will not be relished by the
present ITeo-Destour Party leader, Salah Ban Youssef,
who is equally ambitious and energetic. If Bourg uiba
returns to Tunis, a clash between these Tunisian
nationalist personalities is likely, and the French
will take full advantage of any struggle for leader-
ship, in conformity with their policy of divide and
rule.
THE T ETIfl flt ANNDS
A The area. of Dutch-Indonesian disagreement at
the Hague Conference pro a y will be narrows con-
siderably withiY the next few weeks. The Dutch and
Indonesians seem to understand each otherts views better
than ever before., and each is avoiding a final position
that could cause the break-up of the Conference. There
is evidence of a modification of the Dutch concept of
the Netherlands--Indonesian Union, and at the sane time
a realization by the Indonesians of the need for Dutch
economic assistance and -,aidance. It is clear, however,
that these are two of the important questions on which
it still will be extremely difficult to reach agreements
The practice of the Dutch and Indonesian
delegations at the Hague Conference of exploring fully
at the sub-committee level the various problems under
discuss .on before presenting formal views probably will
facilitate agreement when the final decisions are to be
made at a higher levels It has the disadvantage of
delaying high-level consideration of controversial issues,
and probably will prevent conclusion of the conference work
by mid-October., the deadline set by the Republicans. If
substantial progress has been made by that tine, a delay of
a week or so probably will not endanger the possibility
that a satisfactory agreement can be achieved. Nevertheless,
tangible results must be evident within the next few weeks to
prevent pressure on the delegations from their respective
parliamentary rTouus, press, and mil tar.T fords for a "take-
it-or-leave-it" showdown.
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A fresh and sustained effort to supplant the
present "soft" po cy of e Italian Comr_inist Party
(PCI) by a "hard" policy may be portended by the charges
of deviation recently leveled by para-military leader
Luigi Longo against Cor nist Senator Umberto Terracini.
The hard faction led by Party vice-secretaries Longo and
Seechi,a favors a small, well-disciplined party, trained
for underground work and prepared for the seizure of
power by violence at the appropriate time. This is in
contrast to the presently dominant soft policy of
Togliatti which favors a mass political party and legal
tactics. Terracini subscribes to the soft policy.
This fundamental policy dissension erupted
at the May 1949 meeting of the Cominform in Prague when
Togliatti -attacked Longo for his mishandling of the
violent popular reaction to the attempted assassination
of Togliatti in July 1948 Longo defended himself by
asserting that events were beyond his controlo He then
counterattacked Togliatti and his soft policy indirectly
by leveling charges of nationalistic and bourgeois
deviation a:;ainat Terracini.
Terracini e s prestige among the middle class
and the intellectuals has been instrumental in building
the mass party. But his record of undisciplined state-
ments make him an easy target for the Longo group. In
1939 he spoke against the Soviet attack on Finland, and
in 1947, while president of the Constituent Assembly,
he stated openly that both the Soviet Union and the US
should keep their hand=out of Italian political affairs
In a defense submitted to the Cominform,
Terracini upheld his policy of working with bourgeois
elements and attributed the present anti-Corniiunlst
atmosphere in Italy to the intransigent behavior of
Longo. The Cominform is reported to have cleared both
Terracini and Longo and to have instructed Togliatti to
eradicate the dissension among the top PCT leadership.,
The Corninforra 11settlement", however, must be
regarded only as a necessary piece of temporizing by
the Cominform. The following; developments cited by
Longo as evidences of lack of PCT discipline and
organization make the establishment of internal harmony
very difficult: (1) the losses in PCI mass strength
and appeal reflected by the party's failure to get even
half of the 8 million si;raatures promised for the ants-
Atlantic Pact petition.. (2) PCI losses in the labor field
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indicated by failure to hamstring the EP and (3)
the discredit, thrown by the recent Papal decree,
on Togliatti's leniency toward religion a By link-
ing these points with the deviation charges against
Terracini,. Longo plays upon the Cominforr.T fears of
the spread of Titoisr:-,.
The PCT is expected to continue in its
present predicament for some time. Although neither a
radical change )f policy nor a withdrawal of either
faction* is likely in the near future, the dissension
may be aggravated as PCI influence continues to wane.
Eventually, the Cominform may grant a more dominant
role to the Longo hard policy.
THIS, VATICAN
B The necessity for espousal of an a -,Tressive
socio-econorl c program by Catholic political par tins
wil.J be increasingly emphasized by Roman Catholic
Church s1)okesrlen. The need of such a program is
stressed by the recent Papal decree which makes it
difficult for Catholics to take refuge in the Communist
prograrla Pope Pius,, in his recent radio address to the
National Council of Cornan Catholics, stressed the
traditional role of the Church as "mitigator" of social
inequalitites, deplored the "defects of the economic
system" and pointed to Catholics as the best; agents for
preventing a widening of the schism between labor and
r~ana .tar?jerito A spokesman for the (Terrian Catholic
Bishops, too, has announced that the Church re ards the
solution of the social question as its most pressing
tas!; and in Italy, the i'uscan hierarchy calls for
better national and international understanding of the
"dangerous" unemployment situation and condemns the
egotism which considers only "profit and individual
gain", These utterances sho? a recognition on the part
of Vatican leaders that, although the Churc', is engaged
in a crucial struggle in eastern Europe., it has more to
lose in western Europe, where Catholics retain freedom
of action and where Communist parties can eventually
benefit from the failure of non-Communist governments
to take action on noco; sar,p social reforms o
Various difficulties, however, stand in the gray
of tan -ible accorinlishmente Strom-. currents within the
Vatican and within the national Catholic parties oppose
any sweeping changes and will work to prevent them.
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Furthermore, the increasin tendency of Catholic
parties to dissociate themselves from coalition
with the anti-Communist Socialists tends to divide
the prod ressive forces that together r.t ht have
been able to achieve reforms which elements in
both groups aCree are urgently needed.
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