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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400020006-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 6
• Publication Date: November 8, 1949
• Content Type: PAPER

WESTERN EUROPE DIVISION
)PPICE OP REPORTS MTD ESTIMATES
O1 TRAL CNTELLIGENCE AGENCY
WORKING PAPER
DIVISION WEEKLY
N
IM -an OTICE: This document is a working, paper,,
official CIA issuance a It has been
co-ordinated within ORE? but not with the
IAC Agencies a It represents current think-
Ing by specialists in CIA,, and is designed
for use by others engaged in similar or
overlapping studies. Tho opinions expressed
herein may be revised before final and ofgi-
oial publication. It is intended solely for
the information of the addressee and not for
further dissemination.
DATE** 8 November 1949
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For week ending
8 November 1949
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m
cio _ NO-' to 4
within the rent a MUM"
rae and Parliament over ai c asic
sues a.s wage-price an u ge po c s will probably be
intansi.fied in the next few weeks. In spite of the
advantages of strong parliamentary support at investiture
and a more capable Cabinet, Bidault, whose recent remarks
indicate that he remains a Loft-of-Center ader closer to
the Socialists than to the Radical Socialists, will have
considerable difficulty in solving the same problems which
confronted the last Third Force coalition. The Government
has already agreed to grant an immediate one-time bonus to
ti:orkers who are yarning 15,000 francs or loss, but this
concession is not satisfactory to labor.
Moreover, cleavage between political garoupsp
especially the Socialists and Radical.-.Socialists, will be
increased by disagreements over such controversial issues as
the return to collective bargaining, partial shifting of in-
vestment from national to private Industry, and a tight
balancing of the 1949-50 budget. At present,, discussion
among political parties and In the press for reform of the
electoral law and dissolution of Parliament is becoming more
widespread throughout France, and increases the likelihood
of critical disagreement in the casing sessions of the
National Ass+errbly,
I)is reement smona- the f *htists and Leftists
B e Sctci+ list- r e t ~rcze Ouvr ,e UC I
probably not in a osttion to go far with itsatest threat
.to promote _ _ arge-sea a str a aet on to force greater con -
a~sa ans rani the oveavztac nt than the planned lump-am cost-
of-living bonus and an early return to collective bargaining,
A "wait and see" policy had been followed by the F0, but It
now feels it must choose between leadisng a general strike or
losin ; its followers to the C unLs t-led General Confederation
of Labor (CGT), The F0 prefers a revival of the non-'Crm .rniat
labor cartel to decide on and diroat a general strike, rather
than Joining a strike under CGT Leadership, Hence it has
sounded out Christian Federation of Labor (CFTC),, technicians
(CGC), and autonomous unions (W$A) * tth a vier to agreement
on joint demandsm At the same times however, the FO Is aware
of a need to coordinate activities with the CGT during a
;aneral strike. Bothereau, Secretary General. of the FO, has
already informed the new Minister of Labor, Sege11er, that un-
less the Government a
rena to greater caioess1ans--presunably
lis2
courlDf. '`'
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"" r 1110
CONFIDENTIAL
--i increase In basic wages-coordinated strike action will
Le necessary. The P0, nevertheless:, does not have autf_; c1.ont
financial backing, or the worker confidence needed to carry
out its plans, and is probably trying to use its Influence
on the Socialist Party to pressure the Cover rient into
greater concessions,
Fzi th x' d fPic-alt ad tment?s in the French dollar
?rtpror ior -~a`eec~~rcu"ce n,uka,,~
ac.~tsex a ~sr `on ?~ basis of a out In ECA direct aid
from. 0880 to 46'75 m lliona-r-=w . ,1 probably be made as , riasult
of: continuing; U5-French studios of prospective animal . sa
supplle8 ~, The French are likely to pi-an cioso to $? 5 million
worth of additional dollar feed Imports.. with the result that
some further cuts in equipment And rase matorlal Imports ;?cam
the dollar area must be made. The BOA mission bellevos 5,
moreover. that at least half the estimated extra imports should
be provided for in the near futura4 e spocla iiy to, forefita1.1 a
stronr*er trend toward slaughtering and extensive feeding of
wheat to livestock.
The adverse aconom,ic and political consequences
facing the Prench Dover ents, if it does not take early
measures to cover the p rospecsave feed deficit,, may nor., also
be estimated more clearly. There would be a reduction in
aupp ie s of milk and meat that would not be evenly distributed
throughout the population; it would Iftt hardest the laboring
population in the r::itiesa As potential Ccrmunlst voters or
'mpathtz:er's, these ol1 ments are a continuing threat to the
Third Force kron without. or as supporters of the Socialitit, or
Popular Republican Parties, they force periodic crises of~t the
coalition frf with:,
In the long rung important Pour-Year Program goals
would be seriously :impaired should Frans;' not. insport substantial
feed suppiles In 1949-50. The 1952-53 target of a rise in meat
and milk production to 106% of 2.938 would : equirr a 5O rncre e
above this year4s , oaduction--a rate of progress more than twice
that achieved by US farmers uxider highly favorable conditions
daring the war period. Also, the French expectation that" a. rriA.
cultural exports will bring in 25% of foreign exchange earnings
in 1:)52.-53 would be severely disappo tasted:, In view of the doubt-
fu outlook for attainment of even present goals for exports or
manufa.ctur d goods,,, any decrease In planned agriculturFr] r xp'srt
sou wd ,,take necessary a more serious cui,taiiment of the px ogrsm
of equipment and rxa a ma a:,erials t orts s Such a cut-back ?rould
retard Impra vemen?t in the standard of 1j ,tng and in the i:1.1itary
es tabs ishment 0
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FRENCH ABB SPANISH NORTH AND WEST AFRICA
An a result of the shocking waste and ine?fir i a- i
ejla ea during the first yearts op6reCtJdx cf the Ma it
Flan In ranch West Africa (a confused and Jumbled story
whose pattern could well have originated in "Alice in
Wonderland"), ECA has stopped the entire programs and will
withhold further procurement authorization* A fresh start
x:i11. be made with the collaboration of competent American
? n;d French officials by a reexamination of the needs and
possibilities of this vast area,, snitch of it an immense
wilderness
A bright spot in an otherwise black picture is the
project for extending the Abidjan-Niger railroad from Bobo-
Bi.oul.asso to Ouagadougou, bringing the rich Niger valley of
the interior into contact with Ivory Coast ports. The line
will be completed in 1952, at an estimated cost of ?``12:,OOO$OOOo
ECA participation consists of supplying funds for the purchase
of rolling a took In the US. Politically r this undortaktng will
facilitate French efforts to promote a stronger bond between
the natives and France9 and will satisfy the desire of the
inhabitants for better o+cnunlcations. From the economic view
poin.t~, a wealth of varied produce from this rich inland
territory will r each now markets R This project might offset the
bad impress ion created by the Incompetent application of ECA
aid,, an unfavorable precedent for future developments u der the
Point Four Program
BELGIUM
B Fore i. demand for Belgian steel, already curtailed,
is expected do a more in view of Te relatively small
Belgian devaluation in comparison with devaluation in other
Western European countries, The Belgian franc was reduced only
12.34%.. whereas the T_K and the Netherlands devalued 30%. A r e
du.etioa in Belgian steel export prices must be made soon to
poitilt competition with prices of foreign steelo Prices of
Belgian steel in markets not controlled by trade agreements are
considerably higher than the prices quoted by Franco and west
Uennany. now becoming serious Belgian canpatitors o Norway will
probably place steel orders again in Belgium as soon as
Norwegian inventories have been reduced. Scandinavian orders
for stool at the lower Belgian domestic Prices have; for the
moment. been stopped because of payment difficulties and the
delay In potting into effect the Intra-European payments
sciicme~, The continued curtailment of steel e. brts will
slow down production in other segments of the Belgian
econom,r ENTIALP
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A Ratification of the Dutch--Indones ian a raementa
by the Net er anc s -7 ar t robaula,,a hough
e . '
debate will be bitter and criticism from rightist elements
strong. With the exception of the Labor Party and the loft
wing of the Catholic Party, support for the agreements will
be given reluctantly, and any serious outbreaks of guerrilla
activities in Indonesia would increase the strength of the
opposition group and endanger passage of the agreements a
In the Netherlands people will find the readjust-
ment of their attitude toward the new Dutch-Indonesian
.~eiationsh1p difficult but the Government probably will. Riot
be seriously hindered by public and parliamentary pressure
in proceeding with the transfer of 5overei ty to Indonesia.
The real difficulty for the Government lies in the attitude
of Dutch officials--civil and military.--in Indonesia, on
whom the interpretation and successful implementation of the
agreement depend. The Hague Government probably will make
considerable effort to control closely the progress of further
discussions in Indonesia and to prevent any overt act of
aggression on the part of Dutch forces. While it is extremely
unlikely that the Dutch will make any deliberate move that
would jeopardize the agreement s, Dutch-Indonesian cooperation
in the future will be Influenced to an important degree by
their relations within the next few months. Serious Dutch
concern that extremist elements will gain control of Indonesia
may make the Dutch relinquish control more slowly than tho
Indonesians believe nooesaary?
Rightist st influence in the Italian Government will
robab:, increase as a resu' o t xe raaix~on awe t reo
moderat~eycf a $ t (PSLI) Cabinet members and the decision of
the PSLI directorate not to attend the Socialist unification
congress scheduled for early De cetbar . On the other hand,
Socialist opposition;, outside the camp of the extreme Left,
gill probably not be correspondingly strengthened.
The coal reason for the decision of the right-wing
(3ara ;att) group, which controls the PSLI directorate., not to
participate in the congress is its fear that Party control
would be captured at the congress by the center and left
groups,, supported by the Romlta autonomists and the Shone
(Union of Socialists) faction. To justify their abstention
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publicly, some PSLI right--wingers have recently attacked
the fomita group for Its uncompromising opposition to
collaboration with the Government. They have also accused
both the Romita and the Shone factions of intending at
the congress to advance proposals on foreip policy and
trade union matters contrary to the spirit of Socialist
unity
Even if the ?SLI ministers return to their posts N
the political complexion of the Cabinet will be altered to
the extent that their parliamentary and popular following
is reduced. Any unification of Socialist forces achieved
at the congress, to which the PSLI center and left wlni s
have declared their adherence, will be weakened by the
absence of the right wingo The Romita autonomists,, largely
because they command substantially greater labor support
than either the Union of Socialists or the PSLI, will
probably dominate the now Socialist party to be created.
In view of the autonomists' attitude toward the Govenment,
an opportunity would thereby be afforded to the Communists
to court the new party and seek Its collaboration on
important political and econmic issues. Such a development
would be facilitated if the Curren : struggle in the Italian
Communist Party between the Togliatti and Longo factions
should result In the continued ascendancy of the former and
a change in the Communist policy from subservience to the
Cominform to a nationalist position.
The dissension over can ?leaders of the
_pol Italian camminlat
tn'~ ms~y e s r-pea~.ed, and ams n+ ~ crease
ia worts at sabotage and strike action may occur as an
indirect result of the announced decision of the Us to lift
partly its ban on the shipment of "war potential" materials
to Yugoslavia,
The dominant Togliatti party 11ne (which has been
moderate and conciliatory and has emphasized constitutionalism
and national interests) has been increasingly opposed by the
Longo-Seochia faction. This latter group, to which the sup-
port of the Coms.inform may be shiftingo advocates the strength
enhn.g of Communist underground forces and their increased use
in illegal direct action and violence. It is this faction,
together with its parallel "hard" policy wing in the Ge;aral
Confederation of Labor (CGIL) , which would be most usoi ul to
the Cominform for anti-.Tito operations ? Therefore.. the Longo
faction may be expected to increase agitation., strikes,, and
sabotage in. ports and other transportation centers in Italy
through which the contemplated sensi-military supplies for Tito
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may move, and in the Italian electrical, aircrafts or
other manufacturing plants in which supplies for Tito may
be manufactured.
This direct action will probably materialize on
only a limited scale and with small success p however$ In
view of the present strength of the police foroes., the
doubtful strength of the actionist group in Communist labor
and paramilitary forces, and the limited enthusiasm with
which members of the Togliatti group would collaborate in
such tactics.
B The continuin activity, of the Sicilian bandit
Giuliano, Yn p `e o fin ens lepo ce a forts o es-.xeet:
Eis cap` ures is embarrassing to the Italian Government for
two reasons. In the first places the existence of such
banditry in Sicily is clearly a product of the critical
econvmio situation of the islands where wealth is concen-
trated in the hands of a few large landowners and where the
extreme poverty of the peasants continues to produce
desperate young; men such as Giuliano. In the second places
the failure of local and Government police to apprehend
Giuliano offers the Commmlsts an opportunity to charge the
Government with inability to maintain order,, and even with
collusion with the wealthy Sicilian landowners who allegedly
protect Giuliano
There are several reasons for Giulia no's local
popularity. Traditionally, Sicilians are hostile to "the
Rome Government", which has tended largely to ignore the
problems of Sicily. Sicilians consequently consider
Giuilano as their defender against what they regard as an
occupation army of federal police. Furthermore,, Giuliano e s
appeal to Sicilian separatist sentiment brings him the
support of otherwise heterogeneous political groups which
are anxious for Sicilian autonomy. On the extreme Right;
the neo-Fascist Italian Social Movement (MSI) is anxious to
have free rain to push its program; the Sicilian MonarchistasE,
who are rnnnerous, aspire to establish a Kingdom of Sicily;
the large land-ownersD many of whom are Christian Democrats,
would like to be free to continue their feudal practices
without threat of land redistribution by "the tome Government".
Becauue of Christian Democratic control of the central Govern-
ments the Communists favor decentralization of adainiatration,,
so that Sicily, in particular, could be a strategic center for
propaganda or other operations. To this ends even the
Conmumist Party may be supplying Giuliano with funds and
material o
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MIAL
CONINU - -
Whether or not federal police apprehend
Giuliano, the socio eeanc ?ic conditions which produced
hhu give the leftist opposition grounds for effective
propaganda against the Italian Govea ent ,
DI 111-11-11AL
1% A 664 B-R.
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