WESTERN EUROPE DIVISION OFFICE OF REPORTS AND ESTIMATES DIVISION WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400040004-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: November 9, 2016
• Document Release Date: September 24, 1998
• Sequence Number: 4
• Publication Date: April 26, 1950
• Content Type: PAPER

Approved For Relea 9-010900400040004-0
WESTERN EUROPE DIVISION
OFFICE OF REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
DIVISION WEEKLY
VOL. VI ? No. 16
For week ending 25 A1950
a m
26 April. 1950
This document is a working-paper, not an official issuance, since
it has not necossarily been coordinated with and reviewed by other
components of ORE. It represents the formulative thinking of one
group of analysts in ORE and is designed to provide the medium
for transmitting their informal views to other intelligence analyats
of the US Government who are working on similar or overlapping
problems, It is intended for the use of the addressee alone, and not
for further dissemination.
7 CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
CHANGE IN CLXSS ^
-
DQCU;VIENTNO.
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Relea ~., P79-O109dM00400040004-0
VOL. VI - No. 16 For A k ending
25 1950
25X6A
B The issue in Austria of nationalization of industries Ic
otil2 very real, oug " do om visible on the
scausa die extension of nationalization in Austria is improbable
in the near future, an active behindm-the-scenes struggle between the
Socialist and People's Parties for the policy control of industries
already nationalized is now taking place, Two incidents have recently
highGlighted this strife, First of all} the Socialists have attwoted
to undermine the Austrian Fuel Import Co. (OBI:G) monopoly,,, which is
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Rele a 19 ~ ? tlA-RDP79-010 000400040004-0
under People"s Party influence, by proposing that, to echieve
econor.t ee in purchasing, the nationalized industries should deal
directly with foreign distributors and pool their coal imports,
Considering that over 90% of the inland coal mines are under
public management (aid under Socialist influence) and that 60%
of Austrian coal requirements are imported, such a step would
appreciably enlarge the scope of Socialist control of the total
coal supply, Secondly, the expansion of the nationalized United
Iron and Steel Works into the wholesale building materials trado
in all of the principal cities of Austria has been assailed by
the PeopleQe Party as a Socialist attempt to extend the scope
of nationalization through indirect methods.
Following the elections of last fall, the nationalized
industries were placed under a Socialist Minister, and Peoplee.z
Party sensitivity on nationalization has increased since that t-inoo
The tactics of the People gs Party now appear to be directed
toward: (1) maintaining the nationalization of the Austrian
economy within present limits; (2) preventing nationalized
industries from branching out into other fields of activity;
and (3) gaining control of nationalized industry policy. This
last point will continue to furnish ample ground for contention
between the Socialists and the Peoples Party (coalition partners),
and will be particularly troublesome in the post=treaty period,
when the Soviet4held industries are returned to Austria,
A The formation of an Atlantic High Council, a tripartite
agreemen on an omm s po cy in sou east Asia, and the
German problem, will be the matters of primary. interest to the
French when the Foreign Ministers of France, the US, and the UK
meet in London early in May, The French will endeavor to gain
support for the formation of an Atlantic High Council,, as recently
outlined by Premier Bidaultd Bidault es proposal for the establisJm ent
of an organization which would integrate the economic, military,
and political policies of the Atlantic community on the basis of a
common global conception is a manifestation of the growing European
uncertainty as to the efficacy of the North Atlantic Treaty
Organization and of fears that too much emphasis is being placed
on the military aspects of the treaty, while other factors are
neglected.
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Releas1999/,,9902 RQIA-RDP79-0109000400040004-0
Serious doubts exist as to the reliance which can be
placed on the US to continue in its present international role,
French leaders believe that growing unemployment in the Us
would increase isolationist sentiment, which might be reflected
in Government policy, The French Government, therefore, strongly
desires a development of the present Atlantic Pact and Marshall
Plan which would tie the US more firmly to western Europe,,
believing that if the US were to take the lead, the UK would also
be less hesitant regarding Continental commitments,
In regard to Indochina,, the French for the past several
months have been emphasizing the importance of that area as an
outpost against the spread of Communism in southeast Asia, and the
resultant need for a joint defense policy, An effort mdl1
probably be made to obtain a commitment from the US and the U'
for support in the event of a Chinese Communist invasion,
Although the French Government is favorably disposed in
principle toward increasing German participation in European
affairs, its willingness to approve'specific moves in that
direction is still conditioned by the traditional fear of German
dominance. The French will undoubtedly attempt to obtain assurances
from the US and the UK that there will be no rearmament of Germany
until French military strength has grown adequate to safeguard
France against its northeastern neighbor,
B The strength of the Communist-controlled General
Confederation o or is Jjke3Y to ec ne was a result
a decisions n at the T e na o committee mee ng on
13-14 April, Although the COT has made some slight gains since the
failure of the February4larch strikes, the committeees decision to
stress political action by the workers will in the long run make
the workers question the value of the CaT as the primary defender
of their economic rights.
At the meeting, resolutions denouncing the atom bomm-b', the
Atlantic Pact, the importation and production of national defense
equipment, and the operations in Vietnam took precedence over the
issue of immediate wage relief (the principal concern of French
workers), Croizat, secretary general of the metalworkers,, union,
particularly stressed the CGTms struggle for a government pursuing
"a policy of peace and national independence"a Such statements
tend, to alienate even some lesser COT officials, who are acutely
aware of the workers a real needs.
In giving secondary attention to economic problems,, the
committee demanded a minimum hourly wage of 115 francs (the present
minimum is under 60 francs), a 40-hour week with pay for 48 hours,,
and a 6,,000 franc vacation bonus. These demands were probably
T__--
SEC RE
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Relea 1999/%9Ia 1tC RDP79-0109000400040004-0
intended to encourage labor unity of action at the lowest levels,
Unity of action at higher levels will be increasingly difficult
as a result of the CGT's denunciation (for the first time) of
all non-Communist union leadership. (The non-Communist National
Committee of the Christian Labor Confederation (CFTC) has,
however, recently insisted on COT participation in wage
negotiations,)
Violent incidents of the type which occurred at Brest on
17 April will continue to be provoked by the CGT's Communist
leaders. During this disturbance,. police fired on 4,000 rowdy
demonstrators, killing one. and injuring 20, whereupon 15,000
workers of all unions struck to protest the police oppression,
This Communist method of gaining support, by playing on the
sympathies of the workers after having instigated police violence,
may have limited success, The workers, however, who have
participated in such demonstrations, will, when they realize that
these are inspired by predominantly political, motives, tend to
drop out of the CGTO
B The increasi pro cariousness of the French Treasury's
operati position may well unaer"Ine the s coalition in
June_, ore eWaanticipated effects of France's steady economic
progress can be realized. French officials hope that this progress
will soon have advanced to a point where tax returns and increased
confidence in government bond issues will make extensivo recourse
to short-term, inflationary borrowing from the Bank of France
unnecessary. The Treasury itself seems convinced that it can hold out
without having to ask Parliament for relief. The first long-term
(non-inflationary) loan of 1950, however-floated by the Goverment
in Maroh was poorly received, and it does not nqw appear that new
issues will be counted upon by the Government to bring in important
sums before the close of the second quarter,
The chances are growing therefore, that the Government
soon will be forced to ask Parliament either: (1) to approve
modifications of the 1950 budget; or (2) to raise the ceiling on
advances by the Bank of France to the Treasury. The first of these
requests would reopen the bitter struggle over economies and higher
taxes; the second would be a blow to the growing stabili.ty of'the franc
and of general price levels. Either request would produce a serious
clash between the Radical Socialists and the Socialists; the support
of both parties is equally essential for the survival of the Bidault
Government.
The Treasury itself now estimates that its deficit for the
second quarterwill amount to more than 200 billion francs, altost one-
half of the deficit originally anticipated for the. entire year, Even
this latest estimate is probably optimistic, Franc counterpart funds
m4
Ir- 05 all.
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Relea"L 1999/0/,P% :Ipy~TRDP79-0109000400040004-0
(derived from the sale of EGA goods) available for public
investment expenditures are likely to be smaller during the
quarter than expected, Serious operating deficits are developing
in the nationalized railroad and gas industries. Also, as thei
French balance of payments position improves, some nations,
particularly Argentina, are drawing heavily upon their franc
holdings and hence are causing a greater drain on the Treasur s
resources than was foreseen,
The Treasury expects to manage its operating deficit,
for the quarter with the help of a number of improvised born ,-d ng
devices. Its chief source of credit, however-the (central)
Bank of Franeeie all but closed to it, as the volume of adv?sices
received from the Bank reached 171 billion francs early in Apt il,
or only 4 billion under the legal ceiling?
B Surpluses of some French agricultural products are becoming
an additional anco to e large-scale expansion o farm
production which ECA considers essential to the attainment by France
of a sound balance of payments position in 1952-53. Of principal
immediate concern to the Government are present surpluses of IL.ilk1,
with output in 1950 expected to rise at least 30% above 19499 and,
meat, The uncertain marketing prospects created by surpluses
strongly influence French producers to cut back output,
Total annual agricultural production has not yet subpassed
the prewar average (whereas, industrial output in 1919 was 22(,'v above
1938). and the French have already reduced their goal for 19521-53
from 25% to 16% above the prewar level, Attainment of even this
modest objective has for acme time been seriously threatened by a
large number of handicaps., such ass (1) the steady downward ;end
of the total acreage of arable land; (2) the growing disparity
between farm and industrial prices; and (3) the Governmentae
postponement of an aggressive policy to boost farm production.,
while industrial modernization is being emphasized,
The Government is taking various steps to assure Fr')nch
farmers of adequate markets and hence minimize their tendency to
curtail production in the face of the current surpluses A s'.zeable
part of public expenditures for agricultural purposes is being
devoted to Government purchases of surplus commodities at fixed
prices, British and German markets for meat and dairy producl,.s,
as well as wheat and vegetables, are being sought., especially on the
basis of longterm contracts, A bill is pending in the French
Parliament, which would provide for the establishment of a foreign
agricultural service, with ten agricultural attaches to study long-
range marketing possibilities, These measures reflect the Go ernmentea
understanding that massive exports of farm products are easen-1;:gal if
France is to maintain even present living standards after 195'. without
extraordinary aide
-5.-
S ara.24i-~
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Relea I 99%f09LO :FAA-RDP79-0109000400040004-0
FRENCH AND SPANISH NORTH AND WEST AFRICA
A The basic friendliness of Moroccan nationalist (Istigla7.
PartyL le ers e s worn so thin as a result o re-
pea sap n ens an long unMITI ea Topes that it has
ceased to be a factor which would favorably affect US capabilities
Formerly there was every indication that in another
in Morocco
0
war the first consideration of the nationalists would be to offer
cooperation with the US in exchange for support of Moroccan
independence at a definite date0 Now, however, Istiqlal leaders
are saying that their confidence in.the US has evaporated and that
US mediation with the French can no longer be trusted,
Disillusioned in their expectation that the US would take
acme concrete steps to assist the Moroccan people toward self-
government., Istigial leaders admit that the wall they have tried to
maintain against Communist influence is weakening. The Secretary-
General of the Istiqlal Party, Ahmed Balafre3, recently sent a
message to the US Consulate to the effect that the party was seriously
worried at the US policy of supporting French colonialism in
Indochina and North Africa. According to him, this policy was
playing into the hands of the Communists, giving them additional
arguments with which to win converts away from the nationalists in
North African
Despair of US support has led to a vogue among Moroccans
of criticizing the US on many counts, from the recognition of Bao
Dai to an alleged "new" policy of supporting Franco, The Istiqlal
Executive Committee has labeled the Voice of America Arabic-language
broadcasts "uninformative propaganda" in the same category as French
and Soviet broadcasts, and the Sultan is said to be displeased
because construction of the Voice station on Moroccan territory was
undertaken when he had not,been consulted.
Also symptomatic of Istiqlal feeling toward the US today
is the sharp increase in anti-US editorials in Al Alain, the party
newspapers Balafre1 says he is determined to cfecT "such editorials
because they merely abet the Communist cause, It is not certaing
however, that he will be able to make his views prevail, for the
line taken in the newspaper must have had the approval of the
Istiqlal Executive Committees
Sam younger members of the Istiqlal are openly saying
that Soviet satellite status is no worse than that of Morocco
under foreign occupation. The possibility exists, therefore, that the
Istiglal, despite its apparently sincere opposition to the Soviet
Union, may eventually consider itself forced into cooperation with
the Moroccan Communist Party to prevent the complete extinction of
-6-
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Rel se 1 0 ! CIA-RDP79-010 .000400040004-0
Moroccan sovereignty. As a small straw in the wind, a prominent
nationalist recently granted an interview to the Communist-
controlled paper., Le Petit Marocain, as that was the best gray of
getting his message o peop Without censorship.
Both Abd--el4Krim, exiled Moroccan hero, and Abd-el-Khalik
Torres' nationalist (Isiah Party) leader in the Spanish Zone of
Morocco, have recently made statements to the effect that it might
be necessary to accept Soviet support to attain their objectives,,
Though these statements met with the disapproval of the Sultan and
principal Istiglal leaders, they were given widespread publicity
and may be indicative of a spreading mood.
A The formation in Belgium of a representative Catholic
Liberal awernmen , pos nc u n oons or~#W' Balsa s, seams
likely as a result of the acceptance by the three major parties of
King Leopold's proposal to transfer his royal powers 'ntemporarily"
to his son, Prince Baudouin, Although some major points of difference
still exist on the conditions to be attached to solution of the royal
question, particularly in regard to whore the King shall reside during
Baudouin's reign and when the temporary transfer of power shall and, a
compromise agreement,. including provisions for the parliamentary
program, probably will be reached. If agreement, however., on every
step is not achieved, or if the King fails to concur in the
arrangements, it is likely that the former Eyakens Cabinet will be
called upon to handle pressing domestic problems, until a
satisfactory compromise is agreed upon.
B The reemergence _ of the Dossetti "left-+ning" group into
active pa c pa on in the roc sin o a CFEILOTTa-n~Democratic
Party may be another step toward single-party Government by the
Christian Democrats, At the party Congress in June 1949, the reformist
group led by Dossetti, although it controlled about one-third of the
party votes, was excluded from the party Directorate,, which was taken
over by the conservative wing, The Dossetti group made another bid
for power at the time of the last Government reorganization, in
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Rele a 1999&2iCJ -RDP79-0109000400040004-0
January 19508 but was refused Cabinet posts and has since.
appeared to be maintaining an attitude of watchful waiting for
an opportunity to reenter the arena,
The inclusion of four members of the Dossetti group
in the 12-man party Directorate elected in April now suggests that
the dominant Christian Democratic conservatives might have to rely
on the collaboration of the "left-ringers" in any attempt at a
one party Government, The reintegration of the two groups makes
such a Government increasingly possible, not only by strengthening
the party, but by giving it more reason to claim that it is
sufficiently representative of popular political currents to make
up a broadly based Cabinet without the inclusion of the moderate
Left,
B The failure of the Communists to arouse public au Fort
f o r t h e i r an cam gn is to Ee- rregarcleci as one Indication of
Me-spread an apat to the Ml APO Consequently, the
Communists may be expected to exploit basic socio-economic issues
increasingly in order to sabotage effective Italian utilization of
US military aide They will ascribe the continued existence of the
country's social ills to the imposition on Italy of the economic
and military objectives of US "imperialists", who will be charged
with sacrificing Italian national interests to buttress the US
in relation to the USSR. In this approach, the Communists will
intensify their accusations that the Italian Goverment, as a
willing "stooge" of the US, is diverting its energies from long-
standing domestic problems to develop the nationos potential for
a war of aggression by the West against the USSR, By such
strategy, the Communists hope to generate sufficient popular
dissatisfaction with the Italian Government?s pro-US policy to
win widespread support for agitation and strikes, which they will
conduct in order to obstruct the transshipment of NDAP cargoes
and the production of war materiel in north Italian industrial
centers,
B Vatican ties with the Italian Christian Democratic--Party
will be ,loser as a resUlf BE M e ec ono o n a as
Political Secretary of the Party, Gonella was formerly an editor
of the semi-official Vatican newspaper,, Osservatore Romano, He
is Minister of Public Instruction in the preaen a n6 , and has
had long association with Italian Catholic universities, both as
a teacher and as director of university publications, His election
is undoubtedly gratifying to the Holy See,
Approved For Release 1999109/02 : CIA-RDP79-0109OA000400040004-0
 Approved For Relea1999/ RDP79-0109000400040004-0
Savo Vatican leaders probably welcome, too, the
acquisition by the Doasetti "left wing" of the Christian
Democratic Party of one-third membership in the Party
directorateo Dossetti- and his followers are dedicated to the
furtherance of the Coals of the Church, and at one time askeedf,
without success, to be recognized as a religious order,
Presumably their close connection with Italian politics was
a deterrent to such official recognition,
The Italian Communists will attack the new leadership
of the Christian Democrats as proof of increasing clerical
influence in the Italian Goverrm ent0
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000400040004-0