JPRS ID: 9071 WEST EUROPE REPORT

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• Content Type: REPORTS

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JPRS L/90? 1
_ 5 ~Aay 1980
:
- West Fur~ e Re ort
p p
- CFOUO 22/80)
:
" ~BIS FOREIGN BRORDCA~T INFORMAI'ION SERVICE _
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~o~
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- JPRS L/9Q71
5 May 19 8 0
WEST EUROPE REPORT
(FOUO a2/so~ =
CONTENTS
THEATER NtTCLE.AR FORCES
FRANCE -
Nuclear Defense, Deterrence Subject of Study
(Pierre Hautefeuille; STRATEGIQUE, Jan-Mar 80) 1
Navy's Improved Super-Etendard Aircraft Described
(Herve Moal; ARMEE& D'AUJOU?tD'HUI, ?~iar 80) 30 -
C~UNTRY SECTION
INTERNATYONAI~ AFFAIRS
Editorial on First Anr.iversary of L~MS
(Editorial, Ugo Piccione; IL SOLE-24 QRE; 13 Mar 80) 34
FRANCE
Commentary Made on Marchais' Human Rights DQfensN Committee -
- (Delfeil de Ton; LL NOUVEL OBSERVATEUR, 3-9 Mar 80) 38
~ .
GFDT's Maire on Relations With PCF, CGT, Business Leaders
_ (Edmond Maire Interview; LE N~UVEL OBSERVATEUR,
, 11-17 r^eb SO) 40
Assessment of RPR, UDF Ecunomic Policy Differences
(Jean-Marcel Jeanneney Interview; LE NOUVEL
OBSERVATEUR, 18-24 Feb 80) 46
ITALi
CONFINAUSTRIA on Trade Competition Among Indt~strialized Nations
(Antonio Duva, Mario Picci-�ini; EL ~JLE-24 ~RE, 6 M.ar 80) 50
� a - [III - WE - 150 FOUO]
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CONTENTS ~Continued)
- SWITZERLAND
Economic, Political Problema of 1980's Viewed
(CAPITAL, Apr 80) 61
- b -
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THEATER NUCLEAR FORCES FRANCE
NUCLEAR DEFENSE, DETERRENCE SUBJECT OF STUDY
- Paria STRATEGIQuE in French Jan-Mar 80 pp 81-113
[Article by Gen Pierre Hautefeuille;l "S*_udy of Nuclear Defense and
Deterrence"]
[Text] Deterrence, credibility--there ar~e nu words which have recurred more
frequently in the columns of our newspapers since France decided 20 years
ago to ~oin the nuclear club. _
Neither are there terms which are more conducive to confusion, so much so
that many Frenchmen have given up trying to understand anything about them.
Adnittedly, until a short time ago Frencr~men ;~ere not concerned with it at
all because of the degree to which France, Europe, and the Weat itself
seemed ro them to be sheltered from a ma~or conilict.
This feeling of absolute security has given way for some years now to worry
fueled month after month by pessimistic rumors and new gloom: War t~o longer
seems impossible. Right away a new interest has emerged in everything ~
relating to defense.
The latter's nuclear aspect obviously benefits fra~m this revival of interest,
further enhanced by the difficul.ties and hesitations of the United States: -
People rightly wcnder about the effectiveness of American pr4tection, about -
the means available to replace ii in case of default.
The circumstances thus lend themselves particularly to reflection about the
validity of France's nuclear defense and deterrence or, more generally and
abstractly, of a medium power facing a great power.
That is the problem that we address in the following pages, striving to
spell out in particular in what situations and under what conditions thi~
form o� defense, far from leading France to the apocalypse that is too often ~
believed, would constitute for it the only chance to preserve its existence
and its freedom. Consequently, we examine the conditions under which nuclear
deterrence could be sought and obtained.
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But before reaching that poiat we must in our initial chap*_er explode a
- certain number of "myth~," widely held unfortunately and which too often
provide s~urious bases for the logic relating to the problems of interest
- to us.
Chapter I: Refutation of a Certain Number of Myths
~ 1. Myth of Deterrence Which Is Allegedly Different from Defense =
"Deterrence would not be defense: Whoever mentions 'threat' does not for
all that say 'use'...."
Let us give credit where credit is due: Without a doubt this is myth No 1,
- a serious transgression, a mortal sin against the mind and against security.
If one ~Jere to believe this one would acquire strategic nuclear weapons
(with the personnel to serve them) and one would try to sECUre a deterrent
effect by the sole "threat" of their use, a threat that one would void at
the same time from all its meaning by specifying that there could be no
question of using them, that the weapons' effective use was unimaginable:
_ "Strategic nuclear weapons are not made to he used," it is asserted, "only
~ to frighten...." And it is added that in case of the failure of deterrence
and i� actual defense were to become necessary, one would re~ort to other
arme, less dangerous, and whose use would then be something that could be -
envisioned.
Qur myth No 1 would therefore lead to the establishment or the upkeep of
two different systems of weaponry, iorces, and concepts of use (or "nonuse"),
one "of deterrence" which would only be uaed to threaten, and the other
"of defense" which alone c~ould be appropriate for actual use. _
It would be impossible to denounce too sharply what such a manner of viewing _
relat~.ons between deterrence and defense can imply in terms of what is
irrational and dangerous.
- It is easy to see, however, how people at times have found it possible to
reacl~ that point: Even though deterrence is as old as war our knowledge
of its mechanisms is still summary and confused. On the other hand, the
appearance of nuclear weapons has been reflected by an increase in the powers
of destruction to such an extent that, wb.ile the possibility of resorting _
to them to discourage aggression has atruck people right away, it has become
evident almost as fast2 that their use could contrariwise entail, again
_ for tha defender, serious "disadvantages."
These are so grave that the temptation came to light to dissociate the
"threat" from the possible "use" in the fallacious hope of benefiting from
the deterrent effect of the former while avoiding the dangers of the latter.
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Hence the myth that we explode here and which cannot help leadir,g to a
twofold setback--that of deterrence and that of defense. For how can one
assure the "credibility" of deterrence, a condition of its success, if one
proclaims at the same time that the weapons will never be used?
And what kind of effectiveness shoula one expect from a defenae that one
will not have deemed strong enough for an effort to build deterrence
around it?
Between~"deterrence" conceived in this manner, seemingly fearsome but in
fact devoid of credibility, and a credible but ineffective "defense," one
understands that many attempts have been made to build "linkages" in the
_ hope of making the former benefit from the credibility of the latter.
These are ingenious attempts, acrobatic at times, but always fruitless and
doomed to remain so. What is called for is not to build bridges between
two different systems but simply to reunite what should never have been
dissociated. To be sure, deterrence is n~t exactly defense: Deterrence
relates to the "interest" (in the financial meaning of the term) of effective
defense. This is interest payable ~n advance when "preventive" deterfence
is involved--in other words, when one seeks (this is the way t:hat one hears
it most often) to prevent war, to bar aggression. Naturally, in this case
there is a certain contradic.tion between deterrence and defense s,ince the
need to implement the latter evidences the failure of the former� But the
fact remains that deterrence can succeed only by depending on a defense
which can be implemented with chances of success. From this vi~~wpoint there
is complementarity between the two.
But there is more: PreventivE deterrence in fact is only one of the forms
of deterrence. Once war is under way, after this kind of dFterrence has
consequently failed, there are other forms of deterrence to aeeic--for example,
the one rhat would try to prevei~t the adversary from resorting to such or
such a type of arms (chemical, bacteriological, and so on), to croes such
or such a line (the Yalu River), or very simply to "continue" war or "pursue"
ite aggression. In all these forms of deterrence the means could naturally
be the "threat" to use new or more powerful arms. But in many cases deter-
rence could also mean the~t actual though sti11 limited3 use or the proclaimed -
and proven determination to continue to fight to the end as is already being
done. -
It is therefore fallacious to use the concepts ~f deterrence and defense
as if they were opposites. tn reality they are directly and closely comple-
- mentary. The success of bo~l. cali~ for exactly the same conditions: In
the face of a given threat a system of arms and forces is necessary as well
as a plan to use them so as to inflict what the adversary perceives as
unacceptable damage whereas the damage to be sustained by the defender -
" would continue to be tolerable.
_
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- If these conditions are met defense can be achieved and it deserves to be _
tried. But beforehand deterrence based on it can succeed and must therefore
be attempted.
A general rule is involved here which ie consequently valid both for nuclear
defense and deterrence. That in their case it ahould be easy to apply it -
is another matter. But it has never been said that the solutions of defense
problems were to be "easy and simple." Rather, what is asked of them is
that they be effective.
2. Myth of Deterrence "One and Indivisible"
Each aggression, each threat, calls for defense adapted to it: There is
' no "omnibus" defense.
The same is true of deterrence: Like defense, it is always relative, always _
specific to a given threat. One does not deter in a vacuum but rather one -
deters someone from doing something. Without specificity regarding these
two complementary elements the term deterrence remains abstract.
We must therefore explode a second myth, one which specifically makes
deterrence a kind of absolute value which can be called "myth of deterrence
one and indivisible."
Quite curiously in France the believers in this myth are found among the
partisana of the [nuclear] strike force as well as among its detractora.
It is by claiming allegiance to it that some of the former proclaim without ~
qualifications that France can now, thanks to this strike force, bar any _
threat againat its vital interests and that France thus possesses deterrence
- [all capitals] at this time. But it is also in its name that others in the
second group refuse completely and categorically to concede to the strike
.
force the benefit of deterrence.
For both groups deterrence [all capitals] appears as an absolute, indivisible
value which one would acquire or which would elude one in one swoop, through
the "all or nothing" principle, depending on whether one held or lost a
certain "deterrence capability"--in other words, the possibility to inflict -
on the adversary a certain amount of "damage" of a nature to make him renounce
any aggression against us.
For one group France has deterrent nuclear capability and thus has deterrence.
The others contrariwise believe that our "minibombs" and their vectors leave
us inexorably be~ow the fateful threshold and do not provide us with any
deterrence.
Regarding the computation of deterrence capability, regarding the determina-
tion of that threshold which may exist between d~terrence and nondeterrence,
both groups generally evidence prudent discretion.
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A basis for computation has at times been advanced, however. This would be
very simply the figure of.the population of the threatened country that
- would "gauge" in all cases the "value" of the latter in the eyes of a poasible
aggressor. To make aggresaion "unprofitable" and consequently to secure
deterrence, a necessary and eufficient condition would be under theae circum-
stances to be able to kill among the a~versary as many people as one's own
population.
It is thus at a level of 50 million soula that some have wished to set the
power of.destruction necessary to Franc! tQ achieve deterrence.
~
This manner of envisioning thinge has only~a remote relationship with the
complexity of human realities. In politics things are never so s3mple, and
volumes would be needed to treat wars from the sole viewpoint of the "stakes"
involved in them. On this score we shall confine ourselves to some elementary
cozsiderations.
The stakes of war differ by their nature. Aggression may be rooted in
- racist, religious, or political ideology. It may also be motivated only
by the securing of material interests even though the importance attached
to the latter is incidentally the expression of an ideology, too. On its
part the resolve of defense can have strictly economic interesta as its
bases, but it can also reflect unselfish love of freedom, a simple concern
for dignity. Finally, in other cases a nation will etrive to protect its
physical exiatence by fighting.
However variegated in nature the stakes of war also differ by virtue of
their importance. Whether it is the aggressor or the defender, a natior.
does not always fight with the same degrPe of c'~etermination, the same
tenacity. Even against the same adversary everything depends on what a
nation fights for. There are truly national wars where a people will be
fully committed because they know that their physical survival, their
. freedom, or their honor are at stake. There are other wars which are only
marginally important and which justify ttie sacrifice of only a few thousand,
even a few hundred, human lives.
When i.t comes to the strength of the reasons prompting aggression or motivating
- defense and consequ2ntly the nature and the volume of the means to be devoted
to them, everything is always specific: There is no omnibus de�ense.
Neither is there "onmibus" deterrence.
There is deterrence or rather "defense/deterrence" specific to eaeh threat
or combinat~on of threats.4
- France does not then have and will never have deterrence in the abaolute
sensP in which this term is at times inappropriately used.
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The country simply has a certain capabil.ity of defense/deterrence which
can enable it to meet certain threats.
We shall add that, even though this capability may be (and nothing is less
certain) below the figure of 50 million people that we mentioned earlier,
it could nevertheless be ~ufficient now. Indeed, in today's world a capa-
bility of only l.million individuals would still be excessive for it c~oes
not aeem that any power, great or small, nuclear or not, can develop againet
us an "aggressive factior" greater than that level. We can thus deem ourselves
to be cnvered.
But, let us reiterate, we are talking about today's world. -
All we know about tomorrow's world is that it will-change, for the better
perhaps but also possibly for the worse. History has given us too many
examples of profound and rapid disruptions for us to rule out the poasibility
o� a new Hitler or a new Stalin who might assume in future control over a
great nation and its arms.
. The time needed far the building of nuclear arms and their vectors--4 to ].0
years--obliges us to cover ourselves already now, at least partially, against
such a possibility.
~ We must thus secure for ourselves a wide margin of protection beyond what
exiating threats justify.
And nothing precludes us from thinking that we might be prompted, 5, 10, or
20 years from now, to increase consiierably our defense/deterrence capability.
3. Myth of the "Sanctuarization of Vital Interests"
J The myth of the "sanctuarization of vital interests" that we now plan to -
explode stems from the principle that nuclear strategic deterrence could
cover only "vital" interests and affirms that such interests exist only on
~ national territory. For France, usually this territory is even reduced to
~ the hexagon [French main3~and]. -
We shall see later, in connection with the "all or nothing" approach, what -
one should think of limiting to the so-called "vital" interests alone the
use of nuclear dpfense/deterrence. -
We plan contrariwise to challenge categorically as of now the restricting
of our major or even "vital" national interests to a hexagon represented as
a"sanctuary." That is a concept which undoubtedly reflects what formerly
used to be reality for us Frencl~ and for a long time at that but which has
_ been totally outdated in the past few decades. France now has major interests
outside of its territory, at times truly vital ones and whose protection,
like thdr of its national territory, can very well be effected against soma
aggresions only by nuclear defense/deLerrence. _
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Let us examine quickly how this change has occurred.
Since the beginning of itg history up to a recent periud France possess.d
on its own soil all that was indispensable for the subsistence of its citi-
- zens and for the preservation of its sovereignty. To be sure, it had to
secure some resources outside its territory: Tin or edible oil in the early
period, spices, coffee sugar, or indigo later, and then an incre~aingly large
assortment of foodstuffs and raw materials. But what was involved then was -
only a supplement to nati.onal resources, an excess which could be done without
if necessary. Even in 1'~40-44 France waa able to ~urv~iv~ despite the plunder
of a notable portion of its own resources and the quasi-interruption of its
importa.
In short, France could be self-sufficient as regards what was indispensable
to it. Under these conditions "national" defense was for France the defense
of its national te-rritory. To be able to kill a large number of Frenchmen
it was necessary for r_hE adversary to hit them on French soil. To deprive
France of its essential mean~ of existence and defense it was necessary for _
the adversary to destroy these on French soil. To constrain France to ma~or
capitulation it was neces~ary to invade its territorq or to be manifestly ~
in a position to do so, minimally to acquire ~nastery of its air space.
France's situation was thus the one involved in our myth: Its vital interests
- were all contained in the hexagon and there were no truly national wars
except those invoJ.ving the hexagon.
But already then what was true ior us Frenchmen was not so for all the other
nations. History has witnessed right from the beginning maritim~ and commer-
cial nations dependent on the outside (for trade cr plunder, it mattered ~
little) in at times truly vital manner. For Tyre and Sidon, for the Hanseatic
towns, and for Venice at the time of their glory the abrupt interruption of
their maritime links would have meant not only their disappearance as states
_ but also the effective death, from poverty or starvation, of part of their
= populations.
Later, Britain and Japan provided us with comparable examples, too familiar
for us to have to dwell on them.
- Today this is also France's case. For the past 30 years this "vital" depen-
dence on the outside, until then the experience of a few maritime nations,
' has applied to France at the same time as to other industrial nations that
had earlier been continental nations. Under the twofold effect of their
- increasin~ consumption of e*~ergy and raw materials and the exhaustion of
their own resources, France, Italy, the Benelux countries, even Germany
now depend in vital fashion on their foreign supplies ~ust as Britain and
Japan already did earlier.
It is henceforth possible to bring about poverty in these countries, to cause
thousand,s, even millions, of their inhabitants to die from cold or hunger
without 3etonating a single bomb or firing a single shell on their soil but
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simply by halting some of their imports either through submarine warfare
which the United States and the Soviet Union are already in a position to
wage (China could follow suit one day) or by an embargo which would not
, remain symbolic as was the case in 1973.
It is possible for the same reason to now exercise ma~or political pressures,
on them through these means, to constrain them to renounce their vital
interests, to force them to make major concessions which only an invasion
of their territory would have mandated on them at an earlier period. ,
There will naturally not be a lack of people to challenge the impact that
we assign here to the effects of a blockade or an embargo, to quote the -
= example specifically of the 1940-44 period, or to evoke the "disruptions
from weekend trips" in 1968 or 1973.
This is not the place to refute these objections in detail. We sha~I only
provide two partial responses to them: _
1. In 19~9 we imported some 15 percent of our energy needs. A 50 percent
drop in our imports reduced our supplies by 7 to 8 percent.
~ In 1973 we imported 75 percent of our energy. The corresponding drop in
our imports would have rec~uced our supplied by 35 to 40 percent.
2. But ~ther reasons, too, contribute to the fact that a war against our
- o.il supplies ~~ould be extremely grave: First, the fact that we have became
increasingly dependent on energy for transportation, food, t~eating, and so
- on, and physically vulnerable to its scarciCy. Then, thefact that oil.tankers
are now much more vulnerable while submarines have become more effective. _
The simple shift from a regular system of maritime transportation to convoy
- traffic would of itself reduce by half the movement of our suBplies even
before a single vessel were sunk. Once the submarine war was really on,
the drop in our energy supplies could reach 60 to 70 percent. This figure _
_ should be compared with the 10 to 20 percent cut that we witnessed in 1940,
the few percentage points (under 5 percent) that we experienced for a few _
months at the time of the nationalization ofthe Suez Canal [1956] and then -
- at the outbreak of the oil crisis in 1973. This would be a genuine national
drama which would jeopardize not only our standard of livi~g but the life,
_ period, of the French people. And this could occur (it stands repetition)
without a single bomb being dropped, a single shell or a single rifle bullet _
being fired at our national territory.
The advent of this new vulnerability cor.stitutes a decisive turning point
in our country's destiny. It is this just as much as our advent to nuclear
power which represents a revolution in our defense. The atiom has disrupted
the means. The vital dependence in which we find ourselves on the outside
- now radically modifies, too, the goals of possible aggression against us
and consequently the points of application of our defense.s
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In contrast to what the myth allegeS and in contraat to wh.at our realitles
- used to be for 20 centuries of our history, we must view as vital not only
the defense of our hexagon but also that of some interests outside of it.
4. Myth of "TacticRl" Nuclear Arms
One understands the attractiver~ess of the idea of using nuclear weapons
_ which would only be "tactical," that is, which would only st~rke the "forces"
- of the adversary and not, like "strategic" weapons, his resources and popu-
_ lation. F'or all thoae anguished by the possibility of resorting to nu~lear
3rms thie alternative had to be explored. Let it prove to be practical and -
many $cruples among political leaders as well as among military practitionere
would be relieved thereby, much outspoken opposition to this form of defense
, would lose ita virule~hce, and *he problems of credibility would by the same -
token be sirigularly simplified thereby.
It was thus natural that many theoreticians should take this path. Some
believed that they could find valid solutions in it and proposed concepts
of defense and/or deterrence involving, by way of appetizers or as the
"piece de resistance," more or less sizable recourse to nuclear arms that
are presumably "tactical."
We eaid earlier that unfortunately only a myth is involved in this connection.
We cannot indeed follow them along this path.
More specifically, we cannot follow them in the case of France's defense
in Europe and in all cases that may ~esemble it, while agreeing that other
- situations might exist where the use of "tactical" nuclear~weapons would
be ~uetified.
As regards France's defense in Europe, then, to which most of the French
partisans of the tactical atomic weapon refer, it has three characteristics _
which radically condemn recourse to such an alternative:
l. To be effective the use of the weapons in question should be on a large
scale.
2. They would be used defensively and therefore primarily in the midst of
friendly populationa.
3. What would be involved would be regions with high populat~.on den~ities.
Let us elaborate on these three points.
The modern armies that we would have to stop are equipped and trained. They -
would operate in such a way as to best "ahsorb" the blows of our nuclear
arms: Bispereal (in the order of about a dozen men per square kilometer),
use of mobility and armor if ther~ is no means of concealment in the topo-
graphy, and so on. Such measures would mandate our resorting to massive
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strikes to secure a destructive effect on them, to stop them, or merely to
neutralize them *_emporarily whether it was a question of a few dozen men or
even 100 or 200. It is indeed strikes of this magnitude that the partisans
of the "tactical" atomic weapon advocate.
However, such use of the weapon by us would not make it possible to spare =
~ur civilian populatiors. -
_ To be sure, if only three or four projectiles were involv~d it would always -
be possible to find in the Ardennes mountains or in th~ wretched Champagne
region targete where there would only be few inhabitants, but perhr~ps not
many enemy tanks either.
With eight or 10 projectiles the feat would already be more difficult, at
least if we tried to endow them wit:h a sufficient leyel of effectiveness.
With several dozen weapons it saould be inconceivable unless the adversary
' had the kindness to deploy and move his forces only in our scantily populated
areas, which is a~joke. In very short order (starting with one or two
= do2en warheads) the ratio between the adversary's military losses and our
civilian losses would move toward the rat~o between the respective population F
densities in the field, that is, in Western Europe, an average of 300 for
the latter6 as against 10 for the former in a"nuclear situation." Through
our action ~lone civilian losses would already be considerable.
Tlxey would exeeed even those of the adversary who, in the "tactical" nuclear
battle that we would have unlezshed, would not have the same reasons as
we to spare the civilian populations nor would his forces have the same
acruples in seeking refuge in our localities. We are therefore undoubted"ly
way below the truth when we estimate at 60 civilians to one military enemy ~
personnel the ratio of losses to be contemplated. To make things more
specific, if we had to infJ.ict the loss of 50,000 troops on our enemy to
atop him, we would have ta anticipate at least 3 million civilian casualties.
The final elemetzt in our argument: Since we are only contemplating a defen-
sive war, the "battle" would take place principally on our national territory
or that of our allies. These civilian losses would thus involve especial].y
if not exclusively friendly populations:
Under these conditions can one talk of the "tactical" use of nuclear weapons? _
_ Unquestionably not. Their effects on the forces would admittedly not be
negligible. Butthe impact--inevitable--on populations (friendly populations)
would be so much greater that they would become most important in the
situation.
Can one expect any positive result from a mode of action involving such a
catagorically negative ratio for the defender? The answer is also negative.
_ Since we are the ones involved, we could not make "tactical" weapons either
the principal or the accesaory of our defense. The rates of loss that we
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- would suffer in such a case (in civilian populations almost excluaively)
would force us to renounce the use of "tactical" weapons long before we
- were able to halt the aggresscr. -
Not practicable for defense, the massive use of "tactical" atomic weapons
is, under these conditiona, worthless for "deterrence" too. We demonatrated
this point earlier in connection with the myth of "deterrence which is .
- allegedly different from defense."
While excluded in the case of defense on terrain with high population density,
the massive use of "tactical" nuclear arms seems, in contrast, to be possibly
in two cases. -
First--and this goes without saying--in operational theaters devoid of inhabi-
tants. One could imagine the use of such weapons, defensively or offensively, -
in the Sahara, the Sinai, the Chinese-Siberian border, and so on. At sea
it would not raise difficulties.
The second case in contrast, like ours, relates to densely populated areas. -
This time we would have the case of an aggressor who, fighting on enemy
territory, would not have the same concern as ourselves to spare populations
and would therefore derive from the use in question advantages exactly
- matching the drawbacks that we mentioned earlier for the defender.
While we formally take exception to our use of "tactical" atomic weapons,
_ we recognize then that others, who would not have renounced all forma of
aggression like us, could in all logic envision their use and get ready for
it, and that there would be every advantage for them to have their adver-
saries, overlooking their interests, raise the confrontation to that level.
� Such a determination provides us with the opportunity to note in p~ssing
and condemn anoth~r myth that would undoubtedly deserve special study:
_ The rnyth involved is that "what is good for the USSR in the field of weaponry
must also be good for France." Let us add, "for the USSR or the United
States." -
As regards the USSR we have just mentioned why a myth is involved.
The caoe of the United States is obviously different from that of the Soviet -
Union and �rom ours. To help defend Europe possibly against the Soviets
the Ae~ericans would not have to fight on er~emy territory as the Soviets
would but rather on allied territory. However, it would not be, as in our
- case, their national territory and it would not involve allies ae close
as in the case of us Europeans.
Beside~, it is difiicult to reproach American theoreticians with not having
always shown themselves so far, in the elaboration of their plans for tre
defense of Europe, to be more clearsighted than some of ours or more sparing
than ours of the blood of our populations.
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However that may be, different solutions must necessarily be brought to
_ different problems. It does not matter how well or badly Americans and
Soviets think that they can solve their problems: I~et us concern ourselvea
with our own.
As regards the defense of Western Europe we must elaborate as a function of
our interests a plan from which, we have just seen, the massive use of
"tactical" weapons will be excluded. This plan has every chance to be hy
the same token more satisfactory for our European allies and first of all
for Germany, which is even more immediately involved than us by the proble~n.
5. Myth of the Unav~idable "Escalation to Extremes"
Of all the myths that we claim to explode here this is one of the most
solidly rooted myths and one of the most dangerous. -
What does it consist of?
Very simply in this, that if a nuclear conflict were to break out it would
not be possible to halt it before the annihilation of at least one of the
adversaries. The use of the initial weapon would trigger an escalation .
that would continue inexorably until the weakest belligerent would find
himself, with hie silos empty, in a state of smoking ruins and the other _
bellig~rent would also be in bad shape, no matter how powerful he may have
been.
This myth comes in two versions: The average person, who has difficulty
distinguishing between "tactical" an,i "strategic" weapons, feels that it
is the initial round of nuclear fire, whatever its nature, that would
trigger escalation. For a certain number of experts, in contrast, a threahold
reportedly exiats between "tactical" and "strategic," and it is the crossing
= of this threshold which would initiate the unavoidable escalation to extremea.
- BoCh are thus in agreement on the automatic nature of the phenomenon to
which they merely ascribe different points of departure.
But from this same perception of things adversaries and partisans of nuclear
weapons draw 3ifferent conclusions.
For the former, defense which could not escape from this automatism and
which would consequently lead without recourse to collective suicide would
be absurd. They reject the use of nuclear weapons and at the same time "
- deny that nuclear deterrence has any effectiveness.
For the latter there are two types of consequences to the use of nuclear
weapons:
1. First, since there would necessarily have to be an escalation tc extremea
it would be better, for the weaker of the adversaries, to use his weapons,
all his weapons, before they were destroyed. Hence the too-often formulated
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recommendation of an "all cr nothing" use of arms as soon as the fateful '
threahold is crossed (that of nuclear arms, period, or more generally that
of "strategic" nuclear arms).
2. But while they draw this inference of the escalationto extremea, coneid-
ered by them as unavoidable, the partisans of nuclear weapons unquestionably
have to find an eacape outlet from the absurdity of the collective suicide
to which their use woul.d lead. Some believe that it resides in renouncing
the nuclear initiative or at least that of moving beyond the "threshold,"
others by the injection between "defenae" and "deterrence," between effective
and simple "threat" of use, of the distinctions that we mentioned earlier.
Now, what is self-�evident is that to forgo the nuclear initiative voluntarily
would be to allow the adversary to use that weapon. To discount that the
latter would do so while he enjoyed enough superiority in conventional forces -
to secure victory at that level, and to base the validity of one's own
defense on that hope seems more than hazardous.
As for the distinction/opposition between deterrence and defense, this is ~
the myth about which we expressed our opinion earlier.
To sum it all up then, we must admit that regarding the topic dealt with -
here the adversaries of nuclear weapons have more logic on their side than
some of their partisans.
Qn condition that one believe in th~ myth.
If this were the case we would have no alternatives but to join the ranks
of the Peace Battalion. ~
This is not at a11 the case: The eacalation to extremes is not unavoidable
and we can advance two reasons to substantiate this position.
The first is of an historic order: We must menrion it, but it doea not
- deserve full elsboration.
The second is much more convincing. It stems from an examination, in all -
the cases of imaginable patterns, or the advantages and disadvantages that
would result for each of the adversaries from an "escalation to extremes" -
- whose Ynitiative they would assume and of what ~:ould consequently impel -
them to it or contrariwise hold them from it. -
This study prompts one to find that the escalation to extremes would in a
certain number of cases be disastrous f.or both sides and that it could not
be considered as the rule. It makes.it possible to define the conditions
and rules through which a medium power could avoid it: There are circum-
stances beyond which it should renounce implementing its nuclear defense
and could not seek corresponding deterrence. There are rules regarding
the poasible use of its strategic weapons.
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We shall examine later the implications of these conditions and rules in the
planning and conduct of the defense of the medium power. Their importance
will prompt us to devote a special chapter to them.
A. Historic Argument
It rests on the fact that while, in the wars witnessed by our ancestors,
the trend toward escalation to extremes was evident in a very general way,
the opposite tendencies were seen just as often. And if in a certain number
of conflicte it is the former which prevailed, moat of the wars ended without
any of the adversaries using--thank God--whether not to lose the wara, to
win them ar even after winning them, all the meane of violence available
to the belligerents, without there having occurred, in short, an "escalation
to extremes."
This fact has not been altered by the successive appearances of increasingly
more sophisticated and more deadly arms from the truncheon to the bow and
crossbow, then to firearms, automatic weapons, more and more powerful artil-
lery, battle gas, air bombings in various forms, and so forth. All the way,
then, the new conventional weapons, excluding nuclear weapons, have changed
nothing. One even finds that despite the disproportionate increase in the
powers of destruction modern conflicts, while they have pushed the tevel of
violence much farther than the "closet wars" of the 18th century, have -
remained from this viewpoint largely outside the massacres perpetrated in
the old days by the Assyrians or the likes of Tamerlane, for example.
While some modern genocides have used large-yield modern Ymplements such
as gas chambere, we know others whic_h have done an adequate job, even today
and ~uet as effectively, with aticks and picks.
It is thus not the "yield" of the available arms which provokes where appli- -
cable an escalation to extremes but rather what men chink and feel: It is -
ideologies and passions which underlie wars. It ia these ideologies and
passions which determine whether they will end up in massacres or not. Arms, -
- with their nature and power, no matter how great these may be, are only
means. Nothing forces one to think that it is different for nuclear weapons.
This opinion will be challenged by some on account of the radical disruptions
which the appearance of nuclear weapons specifically may have provoked in
everything relating to war. Thinking about it thoroughly, however, and if
on~ goes by principles, these disruptions are not as deep as people s~y.
Deterrence, especially, is not the novelty that has too often been alleged.
It has always existed and has always operated according to the same psycho-
logical mechanisms. Whether under Ashurbanipal or Genghis Khan, the people
kne~a already that their defeat could be translated for them into as radical
an extermination as the holocausts mentioned in our contemporary nuclear
- literature. While the nature of arms has changed, while their power, their
range, the instantaneous nature of their effects have increased in almost
immeasurable proportions, one is no less entitled to consider that the logic
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_ of war remains the same and that there are, for example, perennial corre-
lations between the value which the political stake represents for each of
the belligerents and the sacrifices which these decide to make to secure -
their goals or hold on to them or, too, between the deterrent effects of
_ a threat and the material and psychological posaibility ("capability" and
"credibility") of implementing it.
B. Argument of the Logic of War
- We shall lean on this logic not (and this will be our second argument) to
develop our case by going beyond the lessons (whether valid or not) of the
prenuclear experience and by considering what a nuclear conflict could be
one day, this time with advantages and drawbacks which both adversaries
could expect from an escalation to extremes and what eould consequently
prompt one of them to provoke it.
We shall limit ourselves to the case which interests us most directly:
That of a conflict that would see a clash between two nuclear powers--a
medium power which could obviously be France and which would fight defen-
sively; and a great power which would be the aggressor. But from now on _
we shall be obliged to reason in the abstract because of the lack of concrete
historical ~vidence and a lack of space to elaborate a scenario which would
incidentally at best be only a particular case. We apologize for this to
- our readera.
Let us imagine, then, a nuclear conflict and ita varioua developmental
hypotheses depending on whether the initiative for it would be assumed by
the great power and then by the medium power.
a. Nuclear Initiative of the Great Power
The'simplest case to analyze is that in which the nuclear initiative would
be taken by the great power in the form of a massive strike. What results
- could it expect from such action?
It is obvious that strongly hit, crushed, the medium power would be knocked ~
- out of the fight except however--and this by definition--for its "second
strike" capability which would at the same time see all the psychological
and humanitarian obstacles preventing its use fall away. This would then
be a victory for the great pow~r but undoubtedly not a"fresh and ~oyous" ~
triumph. By way of reprisals it would have to absorb the entire "second
strike" of its defeated adversary.
Accordingly, one of the following two alternatives would occur:
1. Either this "second strike" capability of the medium power would be
greater than the value attributed to the stake of the conflict by the great
power and the latter would pay for its victory a pri~e higher than it would
wish, which would be politically absurd.
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2. Or, this "second strike" capability would be less than the worth of the
stake of the great power. In this case the latter would pay less than its
real value f~r its success but still too high a~ost since it could have
achieved its triumph at distinctly less cost by going about it more intelli-
gently. In the considered hypothesis of the force ratio and the stake, in
fact a reduced first strike accompanied by the threat uf a more powerful
second strike in case of resistance could have brought the medium power to
renounce all vengeance and capitulate purely and simply. The absurdity of
the great power's behavior would thus be less than in the first case but it
_ would continue.
Consequently, in both cases, for the great power a massive strike would be r
nonsensical.
For the medium power it would only be planned as a response to a massive
initiative of its great power aggressor which would have placed it in such
a state that the supplementary risks to be expected from a new strike by
the great power as a reaction to its own reprisals would not add much more.
To be sure, this vengeance could not restore it either its physical integrity
or its sovereignty: It would no longer have any "defense" value.
It is nonetheless rational to anticipate this, for its possibility alone, -
with the high degree of probability that on2 is entitled to asaign to it,
would have an unchallengeable effect of "deterrence."~
- In fact, the absurd nature which a massive nuclear initiative against a
medium nuclear power would represent ~or a great power makes it possible for
the medium ~ower to have the means of some deterrence, both fundamental
because of the simplicity of its mechanisms and capitally important by
virtue of its goals--dissuasion by which it could, through the threat of
massive reprisals, prevent a crushing strike.
It seems indeed that this kind of deterrence is challenged only a little in
terms of its principle and that it is generally considred feasible by France.
But in this connection one must indeed become aware first that it can enter
into account only on condition th~t the medium power should in fact have
sufficient second strike capability available and only as long as this
capability would remain available. This would bar its use for other goals
in the course of conflict. Second, that it is stxictly and ur:iquely adapted
. to the threat of a massive adverse strike but would not prevent other forms
of aggression against which other defense/deterrence systems would conse- -
- � quently be necessary and, should the case arise, other nuclear means.
- b. Nuclear Initiative of the Medium Power
Let us move now to the second case where the initiative would have to be
taken by the medium power.
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It is clearly more complicated than the preceding cd~e, which prompts us
to proceed in this regard by stages--a first stage where we shall imagine
that the behavior of the antagonists in the condu~t of war would be strictly
rational,8 and a second stage where we shall take into consideration the
effects to be expected from emotional factors but supposing that the latter
would manifest themselves only on the part of the great power since, as
regards the medium power, we seek preciaely to spell out the rulea of
rational behavior.
But before broaching this atudy in various forms of behavior we must define
the situations in which they may occur.
- Indeed, states do not wage war at just any old time and in ~ust an~ old way.
Especially, they do not wage it in just any old way when there is a choice
between two "levels," the conventional and the nuclear level, whose "costs"
for the great power aggressor as well ae the medium power wot;ld be different.
A state does not wage war, or at any rate should not wage war, except with
reasonable chances to win it or at least not loae it, that is, if the sCate
felt able, at the level considered and with a chosen strategy, to inflict
unacceptabl,e "losses and damage" on its adversary while sustaining only
"reasonable" damage itself. The terms "unacceptable" and "reasonable" are
obviously evaluated as a function of the political "value" assigned to
the stake of the conflict, on one hand by the great power arid on the other
_ by the medium power, failing which the latter would be better off capitulating.
The decision to wage war or to refuse to wage it, the choice of the "level"
(conventional, nuclear, or other) at which a state would decide to accept
it or to wage it would thus stem at any point in part from the idea that a
belli erent would form of these "stake valuea" for itself and for its adver-
sary,~ and in part from the losses and damage to be anticipated for both as
a result of the strategies envisioned at the "levels" considered, and finally
on the ratios that would be established among these d3.fferent data.
The table following presents schematically the fd~r,imaginable co.mbinations,
obviously from the viewpoint of the medium power, and the decision that
would be mandated on the latter in each case.
The indications made in the table call.for some explanations:
"Great power's stake value" designates the importance attached to the atake
_ by the great power and consequently that of the losses and damage that it �
would be ready to suffer to secure it (or at least the evaluation that the
n~edium power would make of it).
"Medium power's conventional capability" and "medium power's nuclear capa-
bility" designate the amour_ts of losses and damag~ which the medium power
_ would feel to be in a position to inflict on its adversary at the conventional
and nuclear levels respectively and this at the price of "acceptable" losses
to itself.
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Medium Medium Lower than the Higher than the
power s power s , ~
nuclear conventional 8reat power s great power s
ca abilit ca abilit stake value stake value
- 1 - - 2 -
Any defense, conventional Conventional defense
or nuclear, is doomed to possible
failure
Conventional deterrence
No deterrence has a chance to be tried
to succeed
Lower than the Nuclear defense doomed
great power's The me3ium power must ta failure _
stake value capitulate
- Nuclear deterrence
impossible
The medium power must:
a. Seek~conventional
deterrence;
b. Use its conventional
defense if ne~essary
-3- -4-
Conventional defense Conventional defense/
doomed to xailure deterrence is sufficient
to prevent the outbreak
Conventional deterrence of armed conflict or to
- impossible put an end to it
Nuclear defense and thus This is the normal
deterrence possible peacetime situation
characterized especially
Higher than the The medium power must: by the minor importance
_ great power's of the diaputes between
stake value a� Reject conventional� protagonists
defense;
b. Seek nuclear deter- See footnote 10
rence;
c. Use its nuclear
defense if necessary.
This case would actually
be that of France and
NATO in the face of Soviet
aggression in Europe or
on tha sea.
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_ The portion o~ the tahle of interest to us is the lower left quarter bearing
number 3: It consolidates the only situations justi~ying for the medium
power effective recourse to its nuclear defense.
All these aituationa present the two following characterietica:
1. "Medium power's conventional capability" is lower than the "Great power's
_ stake value," which dooms it in advance to failure and bars the medium power
from resorting to it profitable.
2. "Medium power's nuclear capability" is greater than the same "great
power's stake valu~."
_ If this were not the case we would. fall into hypothesis 1 and the medium
power would have nothing left to do but capitulate.
Self-evident, one could say again.
Self-evident, admittedly, but too often lost from sight even though extremely
_ important, for a whole series of logical consequences flow from these two
- characteristics which make it possible to define rigorously the conditions
in which the medium power would be prompted to take the nuclear initiative.
These conditions would be the following:
1. The great power would have started the conflict a~ the conventional
level, the only one where it could have achieved its war goals at a politi-
cally acceptable price.
2. It would have done so knowing full well of the existence in the hands
of the medium power of a nuclear second strike capability greater than the
great power's stake value but because the great power would have been per-
- suaded that the medium power would not be in a position to use it, the
former would then feel assured of being able to maintain the conflict and
win it at the conventional level.
3. This conviction would be erroneous since, under the hypothesis of the
situation, the medium power would contrariwise decide to escalate the
confrontation to zhe nuclear level.
4. The great power should logically renounce its aggression if it discovered
that it had made a mistake.
5. The great power would obviously strive to maintain the coc~flict at rhe
conventional level. In no case would it take the nuclear initiative even
though the medium power might try to prompt the great power to it. Further-
more, the great power would itself shun any political or military measure
likely to facilitate the shift to nuclear weapons for its adversary.
6. It would thus be up to the medium power at any rate to take the nuclear
_ initiative.
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These six points are of extreme importance. We must have them all in mind
when we reflect on the behavior of the adversaries in the case of the
mediwn power's nuclear initiative. But before broaching the latter we must
retu�-n to point 3, which deserves a few additional cou~ents. "
T'his point 3 concerns the error committed by the great power in its estimates ~
of the use of the medium power's nuclear defense. What is indeed to be
seen is that the error in evaluation would very probably not involve the
medium pc::~er's technical and material defense capability, widely known and
' which we have assumed to be greater than the "great power's stake value,"
but rather would involve the possibility (moral or psychological or political)
- for the medium power to put it into effect. The failure of the medium power's
prPveative nuclear deterrence would be imputable in short not to an insuffi-
ciency of capability but to a lack of credibility.
There would necessarily be reasons for such error in evaluation: The most
plausible ones would be opposition to the use of its nuclear force faced
by the medium power either on the part of its allies or some of its own
citizens. In both cases these difficulties would undoubtedly be real: The
great power would only have exaggerated their importance by considering that
they would block the nuclear power's freedom of action whereas they would
only hinder it.
Let us mention for the time being an important detail to add to our point
~ above: There is every chance that it is in a difficult political contaxt
that the medium power would have to take a nuclear initiative, and the great
power would strive to aggravate these difficulties.
The logic of the situation now being clearly defined, we can broach the
study of that of behaviors: That of the medium power, promp~ed to take the
nuclear initiative, and that of the great power called upon to react to the
latter.
We shall assume initially as we stated earlier that these behavioral patterns
would be strictly rational: We ahall proceed in comparative fashion, first
figuring that the medium power would take the initiative in the form of a
single and massive [nuclear] strike and then that it would do it in the form
of a "measured" strike.
Option A: Massive strategic nuclear initiative of the medium power
This is the "all" in the "all or nothing" formula, the totality of the medium
power's strategic weapons being fired in a single salvo to strike the "urban
concentrations" of the great power.
The logical consequences would be the following:
1. The great power would sustain considerable losses and damage, greater
than what it would have set for itself as an acceptable limit before the
aggression.
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~ It would obviously wish to avenge itself because of it.
But we agr~ed to initially discount emotional reactions and therefore will
_ not for th~, moment take account of this desire for vengeance.
2. The meclium power would have used with a single salvo all its strategic
warheads. It would then have available only ita conventional defense,
insufficient under the assumptions of the situation, and its tactical nuclear
weapons whose kinship in defensive action with the thoughtless and dangerous
act of an i:ll-advised friendship is known.
Since the stake of the conflict would not in the meantime have changed value, -
_ � the great power would logically be compelled to pursue its aggression and
wo uld be assured of winning either at the conventional level or at the
nuclear level (tactical or strategic) which would no longer present a danger
to it.
F~nal result:
The great power, more harshly hit than its stake would warrant in its eyes,ll
would nonetheless press its aggression until victory because of it.
As for the medium power, the execution of nuclear defense of sufficient
power but in an inadequate form irrevocably makes it lose its war, not to
mention the repzisals that we shall discuss later.
_ Option B: The medium power assumes the strategic nuclear initiative in
gradual ano measured manner: Initial firing of one of a highly limited
number of weapons, repeated if necessary, but at any rate keeping in reserve
the largest portion of its strike capability.
- Logical consequences:
1. The great power suff~rs limited losses and damage. No more than in the
case of option A will we discuss for the moment the vengeance which it
could however wish to exact for it.
2. The medium power's measured nuclear initiative does not change signifi-
cantly either its own nuclear capabiliCy or the stake of the conflict for
the great power. The "risks/stake" ratio thus continues to be for the great
power in actuality what it had been previously. But the idea that it had
formed of this ratio is radically modified for it now has proof that, in
contrast to what it had believed earlier, the medium power is not only
desirous but e�fectively in a position to use its nuclear defense. The
great power undoubtedly continues to be technically capable of controlling ~
- the stake of the conflict but it now knowa that is would have to pay a
politically unacceptable price for it.
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Final result:
In all logic and again discounting the vengeance motive, the great power is _
prompted to renounce the atake of the conflict and to end its aggresaion.
For the medium power this is a victory.
On comparing the ultimate consequences of our two options the case is clear:
Using the assumption that we have made (the only one that would ~ustify -
a nuclear initiative by the medium power) and assuming again that the
adversaries behaved in strictly rational fashion, the "all or nothing"
- formula would unavoidably lead the medium power to total defeat. An initial
measured strike, by enabling it to hold in reserve the bulk c,f its means,
would contrariwise prompt the great power to renounce its aggression and
its goals.
For neither of the adversaries in this case any more than in that of an
initiative by the great power would the "all o~ nothing" approach be ~ustified.
But everyone knows that men do not always act and in every realm as logic `
and reason might dictate.
_ Let us therefore examine now the disruptions ehat "feelings" and "pasaions"
would not fail to provoke in the rational cause-and-effect relationship
- that we have just described.
A few comments are necessary before we broach the ~umble, necessarily delicate, `
of logic and feelings: ,
1. Let us recall first that we envision emotional turbulence only with the
great power since our goal here is to assume rational rules of conduct for
the medium power.
2. We concede that these emotional disruptions with the great power would
not eliminate all rationality in it. Indeed, if that were the ca~e the
_ logic which the medium power would continue to evidence would no lor.ger be
of any use to it. In a more general way, any theoretical reflection on
such a hypothesis is useless. ~
We do not bar for all that the possibility of a complete tilting of the
great power toward the irrational. We only consider that this could not be
a general case12 but only a"borderline case" which should not for this
reason figure any the less among the hypotheses inventoried by the leaders ~
responsible for waging the war. If this hypothesis were slated to be con- ~
cretized it would be appropriate to try to attempt preventive nuclear
deterrence but, if the latter were to fail, it would be appropriate to
_ renounce actual defense at this level and consequently to capitulate. _
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_ 3. Contrariwise, we shall consider that ther~ would subsist with the great
power a certain measure of rationality that could even be significant, and
this for~the following reasons:
a. If the role of the "emotional" is preponderant (we said i.t) in the
"cause" of wars,13 it seems that in contrast the "rational" should have a
predominant ;~lace in tt~e way war is waged: Choice of the means of violence,
strategy, tactics, organization, conduct of aperations,~.and so on.
b. One may wonder whether this predominance of the rational in th~ "how"
element has not become accer~tuated as, together wi~h the cost of arms and
especially their power af destruction, the drawbacka of a possible error in
their use have increased.
It would also be necessary to specify "all other things being equal,"
especially the intensity of the hostile motivations.
Since the appearance of nuclear weapons it seems that this tercdency is no
longer subject to challenge and that all nuclear nations strive more actively
- thaa ever to define their logical use (or nonuse). All these nations have
become aware that, in the absence of a common language, any conflict among -
them would risk involving them in the apocalypae and that this common
language can only be that of logic.
Cc~nsequently, they are less than ever disposed to give free vent to their
"emotional" reactions.
This is then not a gamble but contrariwise to consider that the behavior
, of the grotagonists in a nuclear conflict would be largely rational and -
would strive to remain so evidences realiem.
The scenarios that we proposed earlier assuming rational behavior patterns ~
- would thus remain valid in part. They would simply have to be the ob~ect
of improvements whose meaning and importance we must now define to the
extent that the subjective character of the dats that we now have tc, take
into consideration permits.
The emotional reactions whose effects we must calculate can be classified
into two categories according to whether they would promote the "escalation
to extremes" (or escalation) or contrariwise whether they would discourage it.
The first category is divided in turn into two subcategories:
First that of in~ured national pride, anger, the thirst for vengeance moti-
- vated by the abuse received, the losses and damage suatained, all feelings
prompting a people and their leaders to return blow for blow at least, even
if they have nothing more to expect from it and even it they have to endure
for thie purpose more pain and suffering than the initial political goals
of the conflict ,justified.
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These feelings generate in some way an "additional stake" which comes on
top of the initial political atake and which may even in an extreme case
replace iC (extenaion of the hostilities for vengeance alone aft~r the polit- _
_ ical goal has been achieved or after it is relinquished).
~ As for the importance which this "additional stake" could assume, it seems
that one can assign approximate proportionality to the amount of losses and -
damage experienced.
Then, there is the concern to safeguard a state's prestige. This concern
and the "additional stake" that it also generates call for several
observations:
= 1. First, that it is the concern of gouernments more than of peoples. In
fact, for totalitarian regimes it meets a veritable need which places prestige
on the borderline between the rational and the emotional.
2. Prestige moves in the same direction as vengeance but according to
different and more complex quantitative mechaniams: While it is, like
vengeance, and in part related to the volume of losses and damage sustained,
it is also linked among other factors to the following:
a. To the "stature" of the adversary: It is all the more humiliating to
_ give way when the adversary constraining one is weaker.
b. To the importance of the auccesses and advantages already acquired and
- which it is now necessary to renounce.
- 3. Whereas vengeance has its "raisons d'etre" rooted in concrete facts
(losses and damage), blows at prestige refer in part to "resolves" or
' "intentions" which one is forced to relinquish but which do not have an
ob3ective existence, which are known only by the statements of their authors
or deduced from their behavior, and which therefore lend themselves more or
less widely to distortions or concealments. We shall see how th3s particular
trait could be used prnfitably by the medium power to limit the additional
stake of "prestige."
In the second category we shall include apprehension and fear. One can
indeed concede as a general rule that the latter, in contrast to vengeance,
tend to initiate reactions, toward greater rationality in behavioral
pattern~.14
Quantitatively, fear like vengeance is linked to the amount of lossea and
degree of suffering.
- But while vengeance would be in proportion to the sufferings already experi~
enced, fear would be a function of those which could still occur. In the
problem of concern to us today, this fear would be with the great power
(another piece of evidence) iu proportion to the nuclear capability which
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_ the medium power may still possese and which the great power would now know
that the ~dium power would be at the same time decided to uee and effectively
capable of using.
Such are the additional elements that we must take into consideration to
proceed, still within the context of our optiona A and B but this time
imagining ~imi~ted emotional reactions, to a further comparative examination
- of the behavior of our adversaries. -
~ Option A: Aiassive strategic nuclear initiative of the medium power -
Recall of the "rational" result:
The great power is hit hard but it only has to def2at the conventional
defense of the medium power, ineffective under our assumption of the situation,
- to achieve ita political war goals.
It thus pursues its aggression until victory.
"Emotional" correctives:
1. The great power wants to avenge the considerable lossea and damage that
- it has sustained: Hence a significant addition to the initial stake of
the conflict. -
2. Law additional "prestige" stake since the great power fin~lly achieves
the goals that it had set for itself.
3. No apprehension leads the great power to control its vengeance Bince
- the medium power no longer has any means of effective retaliation available.l5 _
Combined "rational and emotional" result:
Not satisfied with winning over the medium power (rational), the great power
can give free vent to its thirst for vengeance and crush it (emotional). -
The intervention of the "emotional" factor makea option A even more totally
negative than it was from the sin;le "rational" viewpoint.
Option B: 5trategic measured nuclear initiative of the medium power
Recall of the "rational" result:
The great power renounces its aggression which, it now becomea aware, would
cost it too much to implement.
"Emotional" correctives:
1. Additional limited "vengeance" stake. _
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2. High fear of reprisals by the medium power (proportional to the nuclear
- capability still available to the latter).
3. Need to restore its harshly hit prestige. Hence a significant additional
stake unlese an escape hatch makes it poseible for the great power to "save -
face."
~ "RaCional and emational" results:
- These may depend on the balance that would be establiahed between the medium
power's nuclear capability and the aggregate value which the great power
would henceforth assign to the stake of the conflict, that is, to the sum
of the following:
Initial political value + emotional additions.
It is obvious that in a certain number of cases the medium power's nuclear
capability, sufficient to face a strictly rational reaction of the great
power, "would no longer be effective" in face of the "emotional" additions
that its nuclear initiative, as measured as it might have been, would have
- generated.
But many other cases are conceivable where the margin of the medium power's
capability would be fairly aizable and the "venegeance" and "prestige"
reactions weak enough for the great power to be impelled to renounce its
aggression.
For that to happen it would b.e neces3ary that the following inequation be
satisfied:
Subsiating nuclear capability ~ Great power's political value atake
of the medium power + vengeance
T ptesLige
As can be seen, these conditions are distinctly more severe than in the
assumption of strictly rational reactions or merely to aehieve preventive
deterrence. They can nevertheless be fulfilled in a certain number of cases.
The taking into consideration of emotional factore reduces in short the
"rational" chances of success of a"measured" nuclear initiative of the
4
medium power and consequently the latter's field of validity. It does
not eliminate them.
And it we proceeded once more to a comparison between our two options A
and B, taking into account this time the "emotional" reactions af the -
~ great power, we find that the former could not lead the medium power except
- to totally negative consequences whereas the latter could, in a certain
number of cases, constitue a valid solution. An initiative of the medium
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power through "all or nothing" could only be catastrophic: It must be
definitively struck from the list of action alternatives that can be _
envisioned.
A measured initiative could trigger an "escalation to extremes," but it
could also in some cases halt aggression without provoking a catsatrophe.
It would not always be sure to succeed.
But it alone could succeed.
(To be continued) -
FOOTNOTES
1. Pierre Hautefeuille, born in 1916, is a general office in the marine
- [naval infantry] reserves. A former member of the free French resis-
tance, he was a student at the Center of Advance Military Sti~dies and -
at the IHEDN [Institute for Advanced National Defense Studiea] itt
- 1967-68 and then a cadre at the CHEM [Center for Advanced Military
Studies] from 19b8 to Z971. It is at that time that he began to study
the problems posed by nuclear defense and deterrence.
2. In effect, as soon as the potential adversary has acquired them in turn.
_ 3. The [atomic] bombs of Iiiroshima and Nagasaki acted much more by virtu~
of their "deterrent" effect than because of the destruction that they
wrought in thoae cities.
4. In reality, it is often possible to envision several systeme of defense _
- against a given threat and the same defense can be valid against
. several types of threats. There is no less necessarily equivalerice
among them. Multivalence cannot be adop~ed as a rule.
5. It is probable that on the day when France's oil supplies were attacked,
those of other Western countries would also be hit. The problem of
_ defense would not be sol~ved for all that, for France or for the others.
It would be raised in the same terms and would call for the�same solu-
tions. Only the scale would be different.
6. No type of dispersal would make it possible to fall below this average. _
7. This prompts us to amend what we mentioned earlier in connection with
_ our first myth: Deterrence may flow from the pos~ibility of i~hplementing
either effective defense of sufficiently powerful "vengeance."
8. One cannot imagine a complet~e degree of rationality except in the conduct
of war (or of operations). On the other hand, the ca.uses of conflict,
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.
the definition of its stake b}r the adversaries, the assignment to the
stakes of a cerCain amount of value (whether explicit or not) by each
of the adversaries are always subjective.
9. One is aware of the extreme difficulty that the political leaders
would have in assigning quantitative values, even approximate to these
different data. In this specific aspect of their responaibilities
- the leaders could .iot expect any help from the theoreticians.
10. The latests developments in the Arab-Israeli conflict have prompted
some authors to note an increase in the possibilities of. conventional _
defense so that nuclear defense/deterrence would thereby become
useless.
To believe them,the medium power could, at the price of reasonable
effort in its conventional defense, expand the area of validity of
the types in cases 2 and 4 in the table up to Che point of including
in it all the conflict situations that can be envisioned. Types l
- and 3 would disappear and with them all justification for nuclear
defense/deterrence.
We cannot sY~are ~his viewpoint. Even supposing (which is not proven)
that this may be the case in 2, 5, or 10 years, it would no longer
be so 5 or 10 years later, progress continuing to play a role but this
time in the interest of the conventional offensive, while the need
for nuclear defense would reappear.
The study and preparation of the latter and of its byproduct, nuclear
deterrence, have therefore lost none of their applicability.
11. One comment in this respect which would rate lengthy elaboration: As
long as a belligerent has not exhausted his physical capability of
combat, it is noz the losses already suffered by him compared to the
value that he assigns to the stake that can prompt him to give up but
rather those that he must still suffer to wage the war to a victorious
conclusion.
12. As some analysts allege, however. The ~atter premise their views on
the unavoidable nature of the "escalation to extremes."
13. There is often a tendency to consider as "rational" wars aimed at the
conquest of material reso~.:rces or interests and as "irrational" wars
with religious, racial, or ideological goals. In reality the former
are ~ust as irrational as the latter. Our attachment to material
resources is no more ~ustified in itself than that of others--in other
periods or other places--to a religious ideal or an ideological syatem
or what have you. �
The coexistence of different value systems is just as reponsible for
conflict as the rivalry or coinpetition within a single value system.
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14. Pu~hed to the extreme, however, fear which has become terror is once
again conducfve to a loss of rationality and can I.ead either to para-
lyzing weakness or, contrariwise, to the same uncontrolled brutalities
as anger.
15. So far we have used the assumption of a two-way conflict between a
great and a medium power in order to simplify an already sufficiently
complex reasoning.
By envisioning a three-cornered conflict in ~hich the medium power
wbuld have a great power ally avaiZable but could not for all that
depend on the latter's automatic su~port (indeed, if that were the
case only a conflict between the two great powers would be involved),
, it is possible to believe that the conclusions woudl be analogous.
~ Indeed,
1. The medium power, after using a11 its strategic nuclear weapons,
would no longer be as tragically exposed to its adversary�s reprisals
- since it would benefit from a"certain degree" of protection from
its great ally.
2. The fact remains however that the latter might hesitate all the
more to grant this protection as the level to which the medium power
would right away have raised the nuclear debate would be higher and
would prompt its ally to become itself committed in a more dangerous
manner.
COPYRIGHT: 1980 STRATEGIC~UE _
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THEATER NUCLEAR FORCES FRANCE
NAVY'S IMPROVED SUPER-ETENDARD AIRCRAFT DESCRIBED
Paris ARMEES D'AUJOURD'HUI in French Mar 80 pp 26-27
[Article by Commander Herve Moal]
[Text] Following his entrauee:~irt~o the Navy in 1956 Com-
mander Herve Moal has performed various duties in the Naval -
Air Arm. Certificated as an atomic technician and engineer,
he has for 3 years now, been project engineer for the Super-
Etendard aircraft within the Central Services Studies De-
partment of the Naval Air Arm. -
The Super-Etendard is a carrier-based aircraft derived from the Etendard,
whose basic characteristics it retains, with improvements, but it is equipped
c~ith an entirely new and original weapons system of highly advanced technology,
which makes it the first French new generation armed aircraf t.
Improvements Resulting in an Aircraft Both Proven and Di~ferent
An aircraft based aboard carriers is subject to very severe operational re-
quirements because of successive catapult launchings and landings in sur- -
- roundings which are particularly del~terious as far as the equipment is con-
cerned. .
The experience accumulated during nearly 20 years of using the Etendard, an
aircraft completely adapted to our aircraft carrier~ "Clemenceau" and "Foch,"
- was put to good use when the Super-Etendard was designed by retaining the
Etendard as a basis and by affecting essentially the following improvements
to it:
The Airframe
Improved left augmentation was obtained by:
extending the leading edge slats over th~ en~tire length of the wings;
increasing the surface af the wing flaps as well as their travel; and
~ 30
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the new profile of the elevator and strengthening its servo-control.
On balance these are very positive steps:
the maximum weight at take-off or on the catapult has been increased from
10.8 tona to 11.9 tons;
the load and fuel carrying capacity and radius of action have been signifi-
cantly increased; and
the approach speed was reduced about 10 knots, compared with the Etendard,
- which decreases the entrance speed into the arrester cables, or enables landing _
on deck with certain military charges or with larger fuel reserves, It also
makea it po~sible to land on deck with weaker winds upon the deck.
The Engine
The ATAR 08 K 50, manufactured b.y SNECMA [National Company for Aircraft Engine
Study and Construction] is derived from the ATAR 9 K 50 engine of the Mirage
. F 1. It is an engine without afterburner and with nozzle of fixed cross
section, a solution attractive apriori in its simplicity. Actually the per-
fection of this engine was a long and delicate process, necessitating very
complete flight tests by the CEV [Flight Test Centerj. Such as it is today
this engine appears very reliable~ It has had the benefit of a11 the tech-
nical improvements effected upon the ATAR 09 K 50 engine, severai hundred _
_ units of which have been constructed and installed upon Mirage F1 aircraft,
and which has flown, in the aggregate, several hundred thousand hours.
That solution, besides significant reduction in development time, is also
proving economical from the spare parts standpoint, many of which are common
~ with the ATAR 09 K 50 engine.
Compared with the OS C engine of the Etendard ~he gain in thrust of the ATAR
_ 08 K 50 is on the order of 500 decanewtons, or about 12 percent, which pro-
vides the Super-Etendard with more brilliant performance with slightly lower
specific consumption. Fast, the ATAR 08 K 50 has the confidence of the Naval
Air Arm's pilots, an important psychological element for those who remember
the disappointments of the ATAR OSC at its beginnings.
The Equipment
To conclude the section on improvements let us mention the new equipment of
which the Super-Etendard will have the benefit:
an autopilot for maintaining low altitude;
an autothrottle facilitating landing on deck, particularly at night; and
a Vor IIs, TACAN and IFF altitude coder.
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Innovations which make the Super-Etendard an Advanced, Effective, and Evolved
Weapons System
As much as in the developments described above the solutions adopted remain
conventional and sure, in the weapons system one may speak of a veritable
"revolution."
In fact, confident of the know-how of the Fren~.h 3eronautics industry, the
navy made a two-fold technological wager on the future on the one hand, on
the weapone system itself and on the other hand, on its environment. Today, _
despite difficulties which had xo be surmounted it can be said the wager
has been won.
The Navigation and Attack System (SNA) of the Super-Etendard
For the first time on a French warplane the structures of an integrated
weapons system is organized about an inertial station which becomes the heart
of the systems.
_ The UNI 40 inertial station permits discreet, very precise autonomous naviga-
tion, but its main advantage resides in the sharpness with which it provides
the "aircraft" parameters (attitude, speed, altitude, and position) necessary
for firing calcul8tions.
Utilization of a digital computer in the UAT 40 attack unit allows management
of the ensemble of data for the various elements of the weapons system and
performances of all calculations to correct firing.
fihe results of those calculations are presented to the pilot continuously in
the "heads up" sight unit.
The multimode AGAVE radar permits seeking, designation, and tracking of ob-
~ectives, maritime or aerial, as well as air-ground telemetry.
The advantages provided by such a weapons ~ystem reside in:
firing precision;
lessened and simplified work load on the pilot; -
widened capabilities for firing and bombardment by el~mination of piloting
limitations; and
precision, autonomy, and discretion of navigation.
Several manual and automatic firing modes are at the pilot's disposition.
The firing precision obtained with such a system is actually remarkable.
As for navigation, the error is on the order of 1 mile per hour.
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The Super-Etendard's Environment: the "Aircraft Carrier Reference (RPA)
operation of an inertial station necessitates a preliminary phase of initiation
called "alignment." This complex operation proceeds on the ground autonomously,
the aircraft remaining stationary for several minutes before being ready for =
navigation.
Aboard an aircraft carrier, a platform moving laterally, autonomous alignment
of the aircraft requires that its inertial system be provided with reference
data, mainly position, speed, and heading of the aircraft carrier, which are
elaborated by the "aircraft carrier reference" (RPA) system. The role of the
RPA is therefore to provide the quality of data required with high operational
reliability over very long time periods.
The "aircraft carrier reference" designed and manufactured by SAGEM [General
Electrical and Mechanical Applications Company] integrates the following
data:
the inertial, by utilization in the RPA of aircraft model UNI 40 inertial
stations; -
_ the speed of the aircraft carrier; and
external manual or automatic positions provided by any other means (radar,
- for example).
Perfection of the RPA system and its logic required 15 series of experiments
aboard aircraft carriers.
Nearly 5,000 flight hours and more than 500 deck landings effected since
its entry into service, in mid-1978, with the naval air arm have enabled the
Super-Etendard to demonstrate its remarkable characteristics; this aircraft
is a happy compromise, combining the certain past of the Etendard with ad-
vanced technological solutions for a modern and reliable weapons system, whose
maintenance, in order to remain compatible with the system, is provided by
automatic testing devices for complex equipment (AT.EC). -
Weapons -
Equipped with two 30-millimeter cannon and five bomb hooks two under each
wing and one under the fusilage the Supe~-Etendard can carry 400-kilogram _
and 250-kilogram bombs and rocket launchers.
For attack at sea it has the AM 39 Missle ava~_lable, and for a3r-air combat,
two Magic Missiles.
It can carry a tactical nuclear weapon.
In addition it has an "electronic counter-measures" capability. -
COPYRIGHT: 1980 - Revue des forces armees francaises "Armees S'Au~ourd'hui"
11,706 33
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COUNTRY SECTION INTERNATIONA~ AFFAIRS
- EDITORIAL ON FIRST ANNIVERSARY OF EMS
Milan IL SOLE-24 ORE in Italian 13 Mar 80 pp 1-2
[Editorial by Ugo Piccione: "The EMS Is 1 Year Old--A Positive Trial"]
[Text] Brussels--It is certainly not easy to outline a complete balance
sheet of the first year of activity of the European Monetary System, the
EMS that many Italian "Cassandras" predicted would have not only a few
months of life, but also and above all catastrophic reverberations on the -
- monetary, economic and social situation of our country.
On strictly the monetary level the final balance sheet is decisively
positive. Notwithstanding the pressures of destabilizing factors, such
_ as the repeated and considerable increases in the price of petroleum and
the principal raw materials, the incessant spreading of the Eurodollar
and the erratic fluctuations in the price of gold, the exchange ratio
within the EMS has been characterized, in the last 12 montha, by a sta-
bility that appeared definitely irrecoverable, resulting both in the
sufficient flexibility of the EMS and a anore responsible policy of action
in the international money markets of the U.S. Federal Reserve Bank.
Fluctuation Restraint -
In 1979 the average change in EMS currencies against the "ecu" was only
1.9 percent, as compared to the average change of 5.2 percent in the pre-
ceding 6 years, thanks to the sound operation of the much discussed
"divergence indicator" and the timeliness with which, translating into
action the pledges made at Brussels, it was decided, last September, to
reevaluate the German mark by 2 percent in relation to the other monies
of the EMS and to adopt restrictive measures in several "divergent" coun-
tries (Denmark, Beigium and Holland). Contrary to gloomy forecasts since
entry into force of the EMS, the lira has evidenced a remarkable stability _
that has placed it among the "strong" curreneies of the EMS, together with
the mark and the French franc, assisted in this unexpected performance by -
the relatively wider margin of fluctuation, (6 percent compared to the
. normal of 2.25 percent; accorded them by the monetary mechanism of the
EEC [European Economic Commun,ity], and also by the wise manipulation of
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exchange rates by the Bank of Italy ~,n the ~teeks iIIUnediately preceding
the begixining o~ the EMS.
Shady areas are not lacking, however. Foremost among these is the com-
plete absence of a common strategy w3th respect to the U.S. dollar, whose
- fluctuations exert varying effects on the individual EMS monies, and to
which each country is inclined to react strictly to national considera-
tions, such as the geographic and monetary structure of their own foreign
trade or the evolution of the rate of inflation and internal unemployment.
The Franc and the Mark
The risks of such immobilization of capital for the operation of the EMS
were, above all, clearly demonstrated last summer by the heavy negative
impact on the Belgian-Luxembourg franc by the interventions in def~nse of -
the exchange ratio between the mark and the dollar carried out by the
- Bundesbank; in order to maintain the franc coupled with the mark, the
Belgian monetary authorities were compelled to, in fact, "burn" monetary _
reserves of almost a billion dollars.
Until now, however, and also because of diversity of international polit-
ical interests of the various EEC governments, there have been only philo-
sophical discussions on the problem, that,considering the profound re-
verberations on the coordination of national policies in matters of ex-
change, interest rates and expansion of the money supply, imposes notable
conditions on the development and, in the end, survival itself of the
EMS. Therefore, it is not surprising that, for some time now there has
been an ever increasing possibility of a one to two-year pos~ponement of
the second phase of the System--the creation of a real European [Monetary]
Fund and the introduction of the "ecu" as an instrument of reserve, a
partial alternative to the dollar--which was originally meant to begin
in March 1981.
On the economic level, the EMS has certainly not contributed to promoting
that focus that is indispensable to the progressive realization of a Euro-
- pean Monetary and Economic Union. The differences, on the contrary, have
deepened; the disparity between rates of inflation has considerably in- -
creased,.from almost 5 percent ir. the Federal Republic of Germany to 19
percent in Italy, and even in the diverse involvement with which the indi-
_ vidual governments have known how or have wanted to face up to the problem.
Certainly, no one has ever maintained that the EMS would have permitted
itself to check on inflationary processes, to reestablish the budget of
the government, or to reinitiate productive investments and, in this way, _
the rate of employment. But it is so very true that it was taken for
granted, that the coordination of exchange rates resulting from the EMS would
have pusYed all, and in particular those countries, such as Italy, with
rates of inflation decisively above the average, to adopt, even if gradu-
ally, an economic management [system] compatible with the overall objec-
tives of the EMS.
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' However, th~ngs'have not gone ~,n th-~_s manner. Because o~ essentially
internal political considerations, the stopgap measures which have been
relied upon so far are �ound to be of insufficient effectiveness and
- that, in the end, it could actually necessitate a shock therapy much -
more drastic than tfiat whicfi would have been neceaeary if, from the be-
ginnin$, one might have proceeded witfi the necessary timeliness and co-
herence.
Our country is not a classical example. Everything seems to indicate,
in fact, that neither the government nor the political and union forces
havp really perceived all the consequences of participation in the EMS.
From the economic standpoint, Italy is further alienating itself from
the other European economies; it continues to record the highest rate of -
inflation and increase in wages, with the inevitable repercussions that
this has on the internal and international competitiveness of Italian
production.
The Exchange Rate 'War'
Without taking into account, then, the unstoppable fermenting deficit
of the government (it represents by now 11.5 percent of the gross domestic
product, a rate equal to three times the EEC average), that together with
~ all the indices of the system has multiple effects far from marginal on
the dynamic national inflation,
Having shelved the Pandolfi Plan, one strives to deflate the economy by '
essentially maneuvering the lever of credit flows and the interest rates,
while one should aim to deflate the system by eliminating all those fac-
tors that contribute toward pushing the Italian prices and costs at a
rate considerably higher than that of all the other industrialized nations.
It is this, exactly in the moment in which the horizon of the interna-
tional, European and Italian economy is rapidly darkening (think only of
the interest rate "war," the slowing down of international trade, and the
rates of growth to the 3etiriment of the balance of payments, even in
"strong"..nations like the FRG and Japan, and the recovery of the dollar
and its effects on other currencies and economic systems). ~
And that is why, now, people are beginning to speak, in Italy, of a pos-
sible devaluation of the lira (which, ~ust barely a few months ago a3.most
claimed an Oscar for stability) as the only possible operation to restore
competition to the economy of our country. Iiowever, the experience of
these last few years has demonstrated beyond any doubt that an appropriate
manipulation of the rate of exchange, even if it can constitute a neces-
sary instrument for a serious anti-inflation poli~y, can only have ex- _
tremely limited results. So much so that, in the Italian case, such
manipulation has been utilized in the past above all else to cope with
the strong increases in money wages, instead of restoring the necessary
equilibrium between the evolution of Italian prices and those of other
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countries. W~,thout forgettiang, then, that w3.th the fall i.n value of the
rate of exchange, it is possible to pursue, alternately, two ob~ectives; -
- increase in tfie profit margine of exporters and those producers sub~ect
to foreign competition, even in the national market, or the increase in
~ foreign sales tfianks to greater international competitiveneas. But since
these are alternative ob~ecrives it is evident that a cl~oice of one en-
J
tails giving up the otfier.
Time is running out and no longer permits us to continue to foater the
illusion that at any moment everything will come to an end only to re-
appear in order. It is the moment, instead, to proceed responsibly, to
make precisely those decisions that are inevitable to demonstrate to the
EEC partners the seriousness with which we intend, specifically, to
respect the pledges we have undertaken and thus to re~ain part of the _
community. It is not possible, in a year of support of the EMS, still
to pretend to ignore the fact that inflation reduces, rather than in-
creases employment levels and that the ma.intenance of monetary stabiZity
- is a priority ob~ective, insofar as it includes, at the same time, the
- ob~ective of attaining the highest possible employment rate.
COPYRIGHT: 19$0 Editrice I1 Sole-24 Ore s.r.l.
9616
CSG: 3104
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COUNTRY SECTION FRANCE
COMMENTARY MADF ON MARCHAIS' HUMAN RIGHTS DEFENSE COMMITTEE
Paris LE NOWEL OBSERVATEUR in French 3-9 Ma~ 80 p 67 ,
[Articl.e by Delfeil de Ton: "The Bigger It Is, The Easier It Gets By"]
(Excerpt] Gremetz, head of the PC [Communist Party] is interviewed by
~ournalists at France-Inter. He refuses to anewer pominique Jamet, guilty
of working for the same newspaper as Christian Charriere. Jamet goes away.
What do the other ~ournalists do? They stay. Marchais gives a press conference.
One ~ournalist arrives, accompanied by Pliouchtch. Marchais forbids Pliouchtch
= from coming to his conf erence. What do the ~ournalists do? They stay. They
_ stay to hear Marchais pr.esent the Human Rights Defense Committee of t~hich he
ie founder, preaident and spakesman. Pliouchtch wanted to ask him why hie
_ mother, a 65-year-old housewife, is not al~.awed to come to eee him ia France
because, having forfeited. his Soviet citizenship, he is persona non grata in
the USSR. Bleased ~ournalists and brave Marchais! -
There is an entire page in L'HUMANITE, after Marchais' press confe;:ence,
presenting a"first balance sheet of 20 years of gains for the rights of man
in the world." All the figures are there. I looked to see how many Indochinese
refugees, according to tY:e PCF [F`rench Communist Party], there were who had "
drowned while escaping f~om Vietnam. There weren't any. That will probably
b~ in the "second balance sheet."
~ Of course, the PCF alone has the right to present a balance�eheet of gaine
for the rights of man, for it re~ects them all, f~om wherever they originate. -
The bigger it is, the easier it gets by and, in hie press conference, Marchais
also said: "In 1979, 50 million people died of malnutrition If nothing
is done, ha1F a billion men, women and, espec~ally, children, will die in the
next 20 years as well. Wiiat do the self-proclaimed 'defenders of the righte
" of man' say about this tragedy? Not a word." It is only Marchais who talks
about the famine in the Third World. In his balance eheet for the last 20
years, he puts this down for Afghanietan [eicJ: "Represaion under Atmin;
150,000 dead and missing." Amin, who was executed by th~ Soviets without a
trial, had been put in power by the Soviets. The only newe~apers which d id
not say a word about the oppression under Amin's rule were the communist prese.
Remind Marchais to call Leroy and Andrieu befor~ his Human Rights Defenae
Committee to hear their explanations.
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The account in L'HUMANITE (21 February) tries to sweeten Georges Marchais'
press conference, but some nice little nuances can be found ~:uet the eame.
Thus: -
"A ~ournalist aek.s: 'Wha.t is better--being a Jew in the USSR or a black in
the United States?'
"Georges Marchais repliea: 'It is better to be a Jew in the USSR1"'
My female companion, Zylberberg, who was reading L'HUMA ~ver my shoulder, also
likes to make comparisone. She comes back with: "And it's better to be a
Jew in New York than a black in Moscow!" ~
In his press conference,Marchais brought up the old Soviet slander against
Sakharov. Sakharov himself had responded to it in 1974. His answer appears in
his book, "Sakharov Speaks," which was published in French by Seuil. According
to this So~~iet slander, Sakharov addressed "congratulations to Pinochet (~idrieu,
L'HUMANITE, 22 February 1980, p 1) and "I greet iri the Chilean coup an era of
rebirth and consolidation" (George Marchais, L'HUMANITE, 2~. February 1980, p 4).
The truth is that Sakharov had sent a telegram to Pinochet, i~ediately after
- his coup, to try to save the life of the communist poet Pablo Neruda. The
telegram was also signed by Maximov and Galitch, and it read: "Pablo Neruda -
is not only a great Chilean poet. He is also the pride of all South American _
literature. His name is indissolubly linked with the struggle of the Latin
American peoples for spiritual and national emancipation. The loes of thia
great man will cast a shadow for a long time on the era of rebirth and con- -
solidation proclaimed by your government." The telegram contained neither
greeting~ nor congratulations to Pinochet. It was simply a humanitarian gesture -
in which Sakharov and his friends took Pinochet at his word to save 1Veruda.
Sakharov, N~archais tells us in his presa coaference, "felt that the United -
Statea had not done enough in Vietnaml" And this time, he givea proof hy
citing a passage from Sakharov`s book:
"I feel that if the American side had demonstrated a greater spirit of decision
and consistency in the military and, especially, political sphere, the tragic
evolution of events could have been prevented. Political pressure on the USSR
to forbid the delivery of arms to North Vietnam; sending in a powerful
expeditionary corps at the appropriate time; petitioning the United Natione;
more substantial economic aid; appealing to the other countries of Europe and -
Asia; all bf that could have influenced the course of events and have thus
prevented the war and its attendant mutual atrociti~s."
"Prevent war and its attendant mutual atrocities." If we refer to Georges
Marchais' balance sheet, that w~ould mean to prevent 3,600,000 deaths in
Cambodia and 2,000,000 in Vietnam. When Sakharov expresses regret for those
5,600,000 deaths, Marchais heara Sakhar~v as thinking "that the United States
did not do enough in Vietnam." In the framework of his Hiunan Rights Defense
Committee, w311 Marchais al~.ow Sakharov the right to respond?
COPYRIGHT: 1980 "le Nouvel Obs~rvateur" `
9475
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_ COUNTRY SECTION FRANCE
CFDT'S MAIRE ON RELATIONS WITH PCF, CGT, BUSINESS LEADERS
Paris LE NOWEL OBSERVATEUR in French 11-17 Feb 80 pp 24-25
[Interview with CFDT Labor Union Secretary General Edmond Maire by Claude-
Francois Jullier ~.nd Thierry Pf ister]
[~ext] LE NOWEL OBSERVATEUR: Never has the CFDT [French Democratic Gon-
federation of LaborJ criticized the PC [Communist Party] as veheme~tly as
in these last few weeks. Why?
EDMOND MAIRE: The reality must not be reversed: the PC has not made such
vehement attacks against the CFDT for 20 years. The reason: the GFDT is
, posing for the Communist Party--and for many of its militants, workers and
- intellectuals--a problem which it cannot evade. Indeed, communist militants
are discovering CFDT members in action every day. The CFDT has been in
every fight. These attacks are not causing the CFDT to change, but it is
obvious that they are considerably hampering trade union action based on
a minimum of unif ied dynamics.
LE NOUVEL OBSERVATEUR: These attacks by the PC have thus led to vehement
responges by the CFDT. c'~id that is leading you, Andre Bergeron pointed
it out, to the limits of contradiction: you do not wa~t to drive bac~C the
communists into a ghetto, but you say that it would not be conceivable to
have co~nunist ministers in the government.
EDMOND MAIRE: I did not say: there must not be communist ministers in
= the government. I simply noted that most of the French tuday would not
accept seeing in the governmer.t ministers who would re~ect alternation and
the free right of peoples to self-determination.
As for Andre Bergeron, he would probably have liked for our disagreement
with the Communist Party to lead us to try to exclude communists ~rom national
life. We absolutely reject that. If there is a contradiction, isn't it
- rather the fact of trade unionists who ze~ect unity of action and retr~at
- into ineffective minority isolation?
LE NOWEL OBSERVATEUR: If you refuse to drive back the communists into
a ghetto, is it because you believe that the PC is capable of developing?
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- EDMOND MAIRE: Quite right. By rejecting any relations with the communists
and with the trade unions in which they militate, Workers Force is blocking
the situation and preventing any development. In contrast, unity of action ~
with the communists and debates, without obscuring our differences, have
made possible a certain development of the PC, at least that of many commu-
nists and CGT [General Confederation of Labor] members. The repercussions,
in those two organizations, of the Soviet invasion of Afghanistan are one
proof of it.
LE NOWEL OBSERVATEUR: You are often reproached for being a political group
- and not a trade union
EDMOND MAIRE: Bergeron likes to say that, and so does Seguy sometimes,
because both of them, each in his own way, leave it up to political parties
alone to change or to direct society. In reality, the CFDT is faithful
to the entire original tradition of the French trade union movement. What
basically changes a society? It is social struggles and popular mobilization
concerning a proposed different society. Action causes people to become
aware and to discover the limits of the anticapitalist fight and leads
to the necessary struggle for building socialism.
We are not trade union anarchists, however. We think that the trade union
movement has a central but not exclusive place in promoting social struggles,
but that it m~~st not be the organizer of the society of tomorrow. Parties
have an essential and irreplaceable role to play. That is the basis of
the CFDT's freedom of tone and its vast scope of intervention.
J
- LE NOWEL OBSERVATEUR: You say that the PC's attitude affects unity of
action. How?
EDMOND MAIRE: The present situation illustrates the PC's negative role
in social action and unity of action linking the CFDT and CG~' since 1966.
On 29 January, the two trade union groups met. After 4 hours of discussion
and without reaching an agreement, we parted company. Georges Seguy and
I explained to reporters: there are problems, but we are trying hard to
overcome them, since a lasting division would be a very serious blow to
the worker movement.
The next day, there were three articles in L'HUMANITE: the PC lit into _
the CFDT tooth and nail, accusing it of class collaboration and all sorts
of treachery. Given the PC's influence or the influence of communists in
the CGT, that amounts to direct interference in relations between trade
unions, with the aim of preventing unity of action. Well now, when someone
is an official of the CGT and a communist, which is very common, what can
he do? He cannot simultaneously agree with Seguy's remarks on 29 January
and with the communist argument in L'HUMAIVITE of 30 January, which called
for using a bazooka to destroy the CFDT
LE NOWEL OBSERVATEUR: Georges Seguy has since made amends
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EDMOND MAIRE: You are no doubt referring to the press conference held on
6 February following the meeting of the CGT's Executive Committee, when
Georges Seguy's criticism was much less caustic in form but just as unfair
basically. Shortly before then, Krasucki also made a very violent speech
in Grenoble to accuse the CFDT of being absent from the struggles and Pierre
Feuilly wrote the same thing in LE NOUVEL OBSERVATEUR.
LE NOUVEL OBSERVATEUR: But Pierre Feuilly is not a communist -
EDMOND MAIRE: That's true. The CGT's noncommunist members criticize their
organization's leadership for its intsrnational positions, but they would ~
really be in trouble if they also criticized it for its trade union action. ~
On the contrary, sometimes they lay it on thick. Feuilly totally invented
a statement by Jacques Chereque, who reportedly gave "his endorsement, in
advance"--I quote--"to the layoff of 100,000 automobile workers." That
lcind of defamation makes it possible to dodge the debate over the real
problems, such as those posed by the future of several of our industries
threa~ened by the crisis.
LE NOUVEL OBSERVATEUR: If the CFAT is not "absent from the struggles,"
what is it doing?
EDMOND MAIRE: I believe that it is doing more than anyone else to develop
more effective trade union action. It has proposed, especially since
September 1979, keeping a limited number of attainable priority demands
in order to bring about mobilization and obtain results to prove the effec-
tiveness of collective action. That is how workers will regain confidence.
Using the present situation and rhe worsening of the government's policy
as a basis, the CGT believes that other kind of action is necessary, and
in particular as Seguy says, "voluntary, militant a~tion" to create a mood
of resistance to the policy of the government and employers. Thus it is
a matter of using any attack against the governrr,ent with a popular response
to stage a protest, even if is known that it will produce rio result. In
~ short, the important thing is denunciation; an~1 protecting the organization
by thinking of the future.
That attitude is ineffective and, in our opinion, derives more from politics -
than from trade unionism. Moreover, the valuntaristic attitude and the
pursuit of sensationalism run the strung risk of leading trade unions to -
- abandon the f ield of the company.
What is of paramount importance socially today is not the disagreement between
the CFDT and CGT, it is the redefinition by employers of their social policy.
_ It consists of introducing great flexibility and great mobility into every-
thing that concerns working conditions, the or~anization of labor, the role
of expertise and the development of collective guarantees. And Chotard
and Ceyrac explain that this operation has two effects: it is the company
alone that can find its responses to the crisis; it must therefore have
a minimum of constraints. As a result, no new social agreeme~t of any scope,
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no new social legislation; on the contrary, it is necessary to weaken the
law's current stranglehold on the 40-hour work week and that of collective
- agreements. Second effect: the company must discover the flexibility and
- develop the individualization of the situation of wage earners, with the
willingness to put trade unions in the wings.
LE NOUVEL OBSERVATEUR: Doesn't the CFDT's realism, which recognizes the
effects of the crisis, ultimately favor employers and the government?
EDMOND MAIRE: The CFDT is not accepting the effects of the crisis. It
~ is distinguishing therein between the results of the interaction of multi-
- national corporations or`dominant capitalist forces, which it is against,
and of the inevitab:le development of international relationships between
developed and underdeveloped countries, which it is trying to influence
in the direction of interdependent cooperation. As for our attitude in
the field, in opposition to government and employers, it is aggressive.
That is why it is realistic. We say: the credible goal is the one which
mobilizes. To prompt the mass of workers to act, it is not enough to shout
slogans that reassure the militants. Telling truckers, who work 72 and
hours on the average: The Confederation is oemanding 35 hours immediately,"
- that isn't serious. The CFDT says: "We are seeking a staggering of schedules
to manage to reduce the working time of truckers. But to demand 35 hours
immediately and for everyone, that is wishful thinking, that is not a trade
union attitude.t1 And L'HUMANITE denounces us and accuses us of betraying
the working class _
LE NOWEL OBSERVATEUR: All the same, there was an agreement between Robert
Boulin and trade unions to achieve a reduction of working time before
31 December 1979
EDMOND MAIRE: A declaration of intent _
LE NOWEL OBS~RVATEUR: Thus there was no agreement, but there was no massive
- strike movement to demand a reduction of working time.
EDMOND MAIRE: No. That is certainly our problem. Workers must again have _
confidence in their own action. For that, unity of action is essential;
~ it cannot be just a tactical ob~ective. We want to mend the ties of unified
action.
If the CGT today considers it impossible to continue with the three priority _
demands adopted in September, well let's negotiate! Perhaps we must decide
to continue with only one of those goals. Or we can choose a new approach,
lead a mass mobilization together and discover unified dynamics through _
successive goals. The government has just dealt a blow to the right of
workers to health care by limiting the settlements made by mutual benefit
insurance companies. Why not choose this initial issue for a campaign?
And then until now, we have not been in a position to make employers yield
concerning the duration of work, but we are going to carry out the most
unified action possible by industry and by company so that a bunch of con-
vergent actions will shake that resistance of employers.
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LE NOUVEL OBSERVATEUR: The CFDT has been advancing this argument for a
long time; but it has not led to much
EDMOND MAIRE: Ah! It has at least led to partial results.
LE NOUVEL OBSERVATEUR: The working class is not mobilized. Can it be
mobitized?
EDMOND MAIRE: We do r~ot see everything in black. Our initial National
Council has shown u~ the existence of numerous campaigns, often effective.
When the demands correspond well ta actual situations, when they are de-
veloped through a detailed collective debate, the result is an awakening
of the f ighting spirit in keeping with the goals which we have established.
But it is true that mobilization is not widespread, that it is not equal
to the stakes. The main thing is not to become resigned, to say: "We are
going to retreat into voluntaristic action, because the working class is
not mobilized." In our opinio~, that is accepting the situation.
LE NOWEL, OBSERVATEUR: But you are ac.:used precisely of bec~ming resigned.
EDMOND MAIRE: No. It is the opposit~ which is true. The CFDT refuses
to take simple actions, militant protests in the streets once every now
and then, to ssve face and to wait for leftist parties to get us out of
_ this situation one day, although we don't know how. Social mobilization
~ust start with the workshop, the factory, on the basis of the moat common
_ everyday problems.
LE NOWEL OBSERVATEUR: However, employers are glad to see you returning
to a more traditional form of trade union negotiation.
EDMOND MAIRE: What employers like is trade unionism that confines itself
to slogans and is satisfied with representing an ineffectual protest in
companies. On Che contrary, the CFDT tries to use to a~naximum the flaws
in the reorganization mechanism set up by employers to impose other aolutions.
Everyone is well aware that some French employers prefer tt~e CGT to the
CFDT. The CGT seems more "reasonable" to ttiem, i.e., mnre predictable.
We can still conclude a wage agreement with it, they say. With the CFDT,
it ~s more difficult because we do not hesitate to question the organization
of labor, hierarchical relationships or the wage scale.
Other employers, it is true, have the opposite attitude. They would like
to be able to rely on more mobile trade unions to change the organization
" of labor and the structure of companies more quickly.
. Yet it is not because there are employers ~~ho say they prefer the CGT that -
we accuse the CGT of class collabaration. It is not because there are em- .
ployers who prefer the CFDT's attitude that we must be accused of the same
thing. Each trade union attitude has its ow~ logic. They must be viewed
_ such as they are, without trying to describe them as "reformist" or
~.1
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"revolutionary." If it were enough to shout "Long live the revolution!"
at the end of a youth congress for it to be achieved, that would have been
done long ago. No doubt there is a need in our country for trade unionism
which will raise again, f~om their foundations, the problems of transforming
society and gradually increasing the awareness of the population in its action.
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COUNTRY SECTION FRANCE -
ASSESSMENT OF RPR, UDF ECONOMIC POLICY DIFFERENCES
Paris LE NUWEL OBSERVATEUR in French 18-24 Feb 80 pp 26-27
[Interview with former Gaullist leader Jean-Marcel Jeanneney by Thierry Pfister] -
- [Text] LE NOWEL OBSERVATEUR: The politicians who have come forwaxd as
hQirs of Gaullism, with RPR [Rally for the Republic] Chairman Jacques Chirac
in the forefront, are hardly treated with consideration by General d~ Gaulle's -
former associates. Among the first group, you who became part of General
de Gaulle's government in Jan:.ary 1959 and did not participate in government
action after June 1969, you are one of the most criticized.
- JEAN-MARCEL JEANNENEY: Perhaps.
LE NOWEL OBSERVATEUR: Anne and Pierre Rouanet`s recently published book,
"Les Trois Derniers Chagrins du General de Gaulle" [The Last Three Disappoint-
ments of General de Gaulle], provide.s new de.tails about the final months
of the general's government. In particular, it seems that Georges Pompidou
and Jacques Chirac, who was then secretary of state to the Ministry of Budget,
acted to undermine his authority and to riasten his successio~~ through the
monetary crisis in the fall of 1968.
- JEAN-MARCEL JEANNENEY: Yes, I think so and they almost succeeded. _
LE NOUVEL OBSERVATEUR: It is odd that a mere secretary of state could have
played such an important role in making so serious a decision.
JEAN-MARCEL 3EANNENEY: The real minister of finance at the time was the
head of the government: Maurice Couve de Murville, former inspector of
finance. He had always dreamed of that job. When de Gaulle called on him
_ in 1958, he thought that he would set up shop on Rue de Rivali and not on -
the Quai d'Qrsay. But he had many other matters to attend to. His minister
of finance, Francois-Xavier Ortoli, seemed unable to keep up with events.
Chirac probably had a little too much freedom, since Georges Pompidou was
always behind his endeavors.
LE NOWEL OBSERVATEUR: Even then, the economic policy choice made was based
on massive economic stimulation.
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JEAN-MARCEL JEANNENEY: Pompidou and Chirac always thought that inflatioa
was better than unemployment. They were preoccupied with the dominant theory
at the time, according to which inflation assures full employment, which
is false except over the very short term. In th?ir eyes, this policy had
- the dual merit of satisfying both employers and wage earners in the immediate
future. I have always thought that that view was dangerous. First, because
even over the short term, inflation is less and less effective in that regard
as people become accustomed to it. It's like drugs: the dosage must con-
stantly be increased! Second, because that policy inevitably leads to the
inflation-deflation cycle, the stop-go sequence, which causes unemployment.
LE NOWEL OBSERVATEUR: Does this desire to satisfy employers also explain
their choice in favor of devaluation?
JEAN-I~IARCEL JEANNENEY: It seems to me that Pompidou was pursuing a triple
objec.*.ive: first, perhaps unconsciously, was to discredit the general to
hasten his succession. The second ob3ective was to assure economic growth.
Pompidou sincerely believed that devaluation was a good solution. Moreover,
- as soon as he was in power, he carried it out, wrongly in my opir,ion. I
imagine that ~aven at the time of the Grenelle negotiations, in June 1968,
he ~ust have been thinking of it. The third goal was to satisfy the specu-
lative and other appetites of big business. You do not innocently come
out of the Rothschild bank. Oddly, men like Pompidou and Chirac, who are
_ not products of that world but have access to it or relations with it due
to circumstance, are often more subordinate to it than those like Valery
- Giscard d'Estaing, who are born into that world and are more inclined to
be detached. Business leaders often complained about Giscard d'Estaing
when he was on Rue de Rivoli.
LE NOWEL OBSERVATEUR: The gamble on economic stimulation must nevertheless
have been sincere, since Jacques Chirac carried out a similar policy in
1974-75 when he was prime minister.
JEAN-MARCEL JEANNENEY: That was a short-term application of Keynesian theories.
Chirac was thinking about the impending election. He is right in saying
that his policy did not speed up an already strong increase in prices, because
the business upturn reduced costs. But it was inevitable that, at the same
time, it would dangerously upset the balance of payments by stimulating
imports and cutting down on exports. In his opinion, that was probab].y
unimportant if the president of the republic dissolved the National Assembly
before that bad effect appeared. Chirac's misfortune was Giscard d'Estaing's
refusal to dissolve it.
LE NOWEL OBSERVATEUR: To the extent that they jeopardize the currency,
aren't these policies in opposition to General de Gaulle's attitude?
JEAN-MARCEL JEANNENEY: The general thought that the currency must be stable
' to represent an element of order in the economy. There again, there was
a basic difference in outlook between the Gaullist view and that of Pompidou
and Chirac: de Gaulle always reasoned and acted with the perspective of
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several decades; Pompidou and Chirac had the upcoming elections in view.
LE NOWEL OBSERVATEUR: How did you dissuade the general from devaluation?
~ JEAN-MARCEL JEANNENEY: From the beginning of the monetary crisis, I had
thought that devaluation was "absurd," as the general had also said. But
as minister of state in charge of reforms, I was not in charge of the economy. _
I would probably have kept silent if my son in law, Jean-Claude Paye, had
not stopped by the house by accident. He was in Brussels then, the executive
secretary of Raymond Barre, vice chairman of the Communities Commission.
I asked him what his boss thought about the franc's situation and he told -
me that devaluation was not a solution in Barre's opinion. So I decided
to get in touch with Raymond Barre. Then my wife convinced me to te11 the
general what I had on my mind. On Friday evening, I requested an interview
with the general. The Council of Ministers was to meet the next af ternoon.
- He received me at 11 on Saturday morning and I argued that devaluation was
politically disastrous, that it was not ~conomically desirable and that,
contrary to what almost everyone claimed, it was not inevitable.
LE NOWEL OBSERVATEUR: Why was Barre also against devaluation?
JEAN-MARCEL JEANNENEY: Barre has always been very iridependent of business
_ circles. ~Ioreover, he has always thot~ght that it was not advisable to tamper
with the currency, which is not only a political instrument but one of the
- bases of the economy. Finally, he did not want France to be in a position
of monetary inferiori*_y in relation to the Germans and DuCch, because his
- views have always incorporated elements of international financial and economic =
power. Pompidou seemed to believe more in skill�ulness in negotiationa. And
- de Gaulle also made his minister of foreign affairs negotiate--and with what
effectiveness!--but after establishing solid foundations through his ~iational -
policy.
LE NOWEL OBSERVATEUR: By one of those curious shortcuts of history, it '
- was Raymond Bar~e who made up for Jacques Chirac's policy in 1976 and returned
to a more Gaullist view of the economy.
_ JEAN-MARCEL JEANNENEY: And not only in that area alone. I find Valery
Giscard d'Estaing's foreign policy far less removed from the general's than
anyone could have imagined: defense policy, attitude toward the United
States, reinforcement of German-French understanding as a pr.incipal feature
of our diplomacy.
LE NOWEL OBSERVATEUR: Are you saying that real heirs are in power?
JEAN-MARCEL JEANNENEY: Giscard d'Estaing and Barre lack de Gaulle's will
for reform. The general wanted to exercise power to chang~ things in depth,
even if it meant going ahead of public opinion. He suffered from obstacles
which Pompidou put into the reforms, for fear of the problems and misunder-
standings that they always cause. During Giscard d'Estaing's 7-year term,
following reforms which have been useful but which did not affect the economy,
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- we have entered a management period. The only real--beneficial--innovation
_ has been the deregulation of prices. For Barre, any reform is fearsome
a priori and if he has the slightest doubt about its effects, he prefers
to ref rain f rom making it . "
LE NOWEL OBSERVATEUR: I~ your opinion, does the RPR express the continuity
of Gaullism?
JEAN-MARCEL JEANNENEY: The essential difference between RPR deputies and -
UDF [French Democratic Union] deputies is that they do not owe their elections
to the same political apparatus. Most RPR officials were elected thanks ~
- to Pompidou rather than de Gaulle. I am shocked by the RPR's heavy use
of de Gaulle's name and by the habit of journalists describing it as a Gaullist
movement. I regret that the family has not prevented that as it could have,
in my opinion.
LE NOWEL OBSERVATEUR: The RPR is against liberal economic policy, however.
JEAN-MARCEL JEANNENEY: The RPR's economic concepts are ambiguous to say the -
least. In the government, the RPR would follow the same policy as the UDF
on many issues. It is most different at the ideological level. First,
- when it demands indicative planr_ing with the keen obligation of respecting
it, whereas Giscard d'Estaing has always been against it. Today the Planning
Commission, however distinguished its general commissioner may be, is hardly
anything more than a research department. Second, when the RPR, like the
- socialists, insists on the necessity of recovering the domestic market and
does not rule out a certain protectioniSm--which I also recommend, but at
the European level. But the RPR expresses its views about that timidly,
because it is afraid of clashing with big business, which supports the world-
wide views of the president of the republic.
Otherwise, I f ind that the RPR's platform mainly consists of economic stimula-
. tion of the 1974-75 type to fight unemployment. Is current unemployment
mainly the result of insufficient overall demand? I don't think so. It
is due particularly to a poor correspondence between job demands and ~
job offers, to a certain sclerosis of the labor market. It is not by stimu-
lating construction that the necessary jobs for women will be created.
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COUNTRY SECTION ITAI,y
CONFINDUSTRIA ON TRADE COMPETITION AMONG INDUSTRIALIZED NATIONS
Milan IL SOLE-24 ORE in Italian 6 Mar 80 p 3
[Article by Antonio Duva and Mario Piccinxni: "Italy Is Les~ Compe~itive--an
Investigation by CONFINDUSTRIA (General Confederation of Italian Induetry)
on the Period July 1978-December 1979"]
[Text] The Italian economy is facing the decade barely begun in conditions
of particular weakness.
_ Along with a few other industrialized countries, auch as Great Britain,
Italy has a aeries of well-defined weak points.
In the first place, it is experiencing the highest. rate of inflation of all
the countries of the OECD area, although their rate too has taken on a more
auatained rhythm in recent times.
The public sector's rate of c~eficit in relation to national income ie among
the highest; and in addition, in the economic structure of the country are
indexation mechanisms so diffuse and accentuated that very few comparisons
with analogous aituations can be found.
The consequence of a situation of this kind, as is known, is that the index-
ing heightens, domeatically, the effects of the international price in- _
creases.
. Finally, the rigidity of the labor market, reguZated by norms that have de-
ficiencies recognized even by the trade-union organizations, has greatly
limited the flexibility and mobility of the use of the labor market, with
- consequences that have had a great deal to do with the occurrence of situa-
tions of difficulty and crisis on the part of the firms, both public and
_ private, and especially the large ones.
It is especially in the relationship between production levels and levels of
compensation that caherence of choices has been lacking for so~e time.
- Thus, labor cost per product unit has had a far more rapid dynamic in the
last 10 years than that which is to be found in almost all the otb.er indus-
trial economies.
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At a recent conferenc~ in Brescia, the president of Federmeccanica, Walter
Mandelli, reviewed the particularly significant resulta of research carried _
out on this aubject by Citibank. -
The labor coet per product unit in the yeara from 1970 to 1978 increaeed by _
207 percent, while the level of increase was quite a bit lower elsewhere: in
Japan it increased by 112 percent; 105 percent in France; 57 percent in the -
_ FRG; and 54 percent in the United States.
The eFfects of the relationships that run between the evolution of the ex- _
change rates and the levels of relative inflation should be considered with-
- in this overall framework.
~ The relative-inflation levels are one of the most reliable yardsticks of
variations in competitiveness trat occur among the different economies.
How does thia yardstick behave? The reaearch carried out by the Studies
Center of CONFFNDUSTRIA under the supervision of Mario Piccinini, and exam- _
. ined below, gives an exhaustive answer to this question.
The general indication emerging from the study is that duxing the recent 4-
month periods, the effects of the pricea-exchange rate dynqmic have had a
notably negative impact on Italy.
The general result of this trend is contraction of the rates of export
growth and therefore possible slowdown of productive activity, which iR be-
ginning to take shape as the most plausible scenario for 1980.
This research thus produces further confirmation of the necessity to initi-
ate, without further delay and so long as it is in time, a rigorous long-
term economic policy, not domanted by the exasperating succession of phases
~f inflation and recession.
- This report, of which a summary is given here, follows the preceding one of _
- last October; it takes as the aggregate index of the competitiveness of the
Italian economy the product of the index of relative inflation as between
Italy and another country (or group of countries), measured as the ratio be- _
tween the reapective wholesale price indexes and the index of depreciation
of Che national money vis-a-vis another money (or group of monies).
_ With reference to a group of countries (United States, United Kingdom,
France, FRG) with which a large part of ou~ commercial exchange is concen- _
trated, considered both singly and toge~her, the variations in competitive-
ness of the Italian economy were calculated. _
On an annual basis, the results obtainea show, after the subatantial im-
provement of 1976, a levelling-off of Italy's average competitiveness gains
der=ving from the evolution of the ratios o~ exchange�and of the relative
inflation.
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Taking December '1975 as base, the permanence in time of competitiveness
- gains of very modest extent is made o~vious by comparison of the correspond-
, ing two indexes of devaluation and relative inflation as given in Table 1:
Table 1
Competitivenesa
= improvement)
Weighted (3) _ (1 X 2)
- devaluation Relative - 100
Period of the lira (1) inflation (2) 100 .
19T6 84.0 113.3 - 5.0
- 1977 78.2 125.0 - 2.2
1978 76.0 128.7 - 2,2
, 1979 74.0 133.9 - 0.~
Temporal Analysis -
In the 4 years considered (from 1976 to today), our economy has benefited
_ from competitiveness gains that average around 2.6 percer.t, on a.n annual
- basis.
The progress of exchange rates in the last 2 years has led to a tendential
neutralization of the more favorable competitive position "bought" by Italy
with the marked depreciation of the lira that occurred in the firet months -
of 1976 (see graph).
The moat disturbing basic datum, though, is the rapid decline during 1979 of
the wide margins acquired with the devaluataon of 1976. The moderate aver-
age depreciation of the lira has only partially compensated for the widening
of the inflation differentials that sharpened in Ztaly's favor in the second
part of 1979 (Table 2).
As is seen for the whole group of countries in question, month-by-month com-
parison of the variations in the phenomena observed reveals distinct tenden-
cies also for the last 18 months in relation to the characteristics and the
differing temporal intensity of the adaptation of prices to the lira exchange
ratio (Table 3).
_ The available data confirm, on balance, that the concerns outlined in the
_ preceding note are well-founded. They demonstrate, in the courae of the re-
cent 4-month periods, the negative effects for Ita1y of the pricea-exchange
- rates dynamic.
By comparison with tfle period to the end of 197R, in.whxch the devaluation
of the lira, overcoming the increases in relative in�lation, had brought
_ considerable recovery in competitiveness, 1975 was chasacterized by the
following trends:
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Guadagni mensili di competitivita ~1~ ~
1% rispetta al dicamDrs 1975)
1978
t2 t977 _
9 1978
Q 1979
'c 6
~
A
v ~ . .'j
~ ~{~~iW~:~i~~~~`~~~_ �~I
a
~ O � ~
. n(33) (4) (5)(6) r
~ D.75 G F M A M G L A. S 0 N D
Key:
1. Monthly competitiveness gains 4. January
as against December 1975) 5. June -
2, Gains 6. July
3. Losses
,
Guadagni rnensili di competitivitfi (96 riepetto al dicembre 19T51
(1)
_ (2~-�-�- U~a
20 (3)..~~�v db . I~~
' Q (4}- Francie . / ?
, 5 r........ Rft
- ~ ~~ti~~ ~ ~ o
~(7 ~ ~ ~''��yI~ ~~~s' ~
a~ 5 � ~uadaqni medi ( 6 )
a -
�~.a..~��� ' -
~ ~
- ~(8) 5 ~ ~~�~~�u�~�~.~...?
?
` t.
_ a ~ 0 ' i�~
~ ~
~ 15 1978 1979
~9~GFMAMG L AS 0 N DGFMAM3 L A S OND -
. . -
Key:
1. Monthly competitivenese gains 6. Average gains
as against December 1975) ~$ins
2. Uni*.ed States �
- 3. Great Britain 8� Losses
4. France 9. January
5. FRG 10. June _
- 11. July -
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Table 2. Degree of Competitiveness of the Italian Economy
`T'uW d~ deprcaamcato ` �
~ 2 /aeli~ Gn ~ 3 ?ur~ d'in0uione
_ MESI ~1~ ~(f~ Preui dl'inQra~o ~ ~lo~
SvrlWU. I ~ 8~ lnd~ce Ji l eumpctq
medi~ lndlea di P~al inllrrbnc I�'~
5~pondenu depreu. eon~~mi lulu nbti.~ Imi~lhv
( (~l IA1 ~ ~ Ih~al � -1
~ 11 ~ldk. 1973/med 147167Y) ~ 12 (~~r. 'K. mr~l '7N�1Wdie. IVTS?
197E Luelio 1 3 - Z3,6 76,4 l7,9 51,4 128,4 - 1.9
Agosto ~ 1 - 13,8 76.Z 17,~ 52,3 129.3 - I,S
Settembre 5 - 23,5 76,5 18,4 53,6 129.9 - U.h
Ottobre 16 ~ - 23.b � 76,4 � I9,3 54.6 129,b I.U
- Novembre 17 - 25,3 74,~ 20,0 55,8 129,8 - ~,U
Diambre 18 ~ - 25,7 74,3 20,9 57,4 13U.2 - 3.i
i9~9 Gennaio - 25,8 74.2 22,4 60,t 13U,6 -?.y
Febbraio - 26,0 74,0 24,0 b2,8 131.3 - 2.8
Marzo 21 - 26,2 73,8 25.6 65,2 131,5 - 3,U
Aprile - 26,1 73,9 27,1 6~,9 132.1 - 2.4
Maggio - 26,3 73,7 28.7 7U,6 132.6 - 2,3
Giu~o ~ - 26.4 73.b 29,6 72.1 132.8 - 2.3
- Lug io - 25,9 74,1 31,1 73,8 132,6 - 1,7
Agosto 14 - 25,5 74,5 32,4 77.6 134,1 - U.I
SeNemDre 15 - 75,2 74,8 33,6 SI,O 135,5 + 1,4
Ottobre 16 - 263 73,7 34,9 li4,8 137.U + I,U
Novembn ].7 - 26,6 73.4 35,g R7,0 137,7 + 1,1
Dicembre 18 - 26,3 73,7 36,6 9U,6 139,5 + 2,R
Anno 1976 - 16,0 84,0 113,3 - S,U
( 25 ~nno 1977 - 21,8 78,2 125,u - 2.2
Anno 1479 - 24,0 76,U 1~.~ ~
Anno 1979 - 26,0 74,0 1~a.y - ~�y
y ) Svituluwne mcdi~ ri~peuo d dicemDro 19'f5, rlferiu til `ruppo Ji ~~Iwe ati+miJerr~o IJ~~~h~~+ U~r, mrra~ tcik.ca, fran.ti~
hri clcrlin~). .
~28 Prodo~w tn 1'~ndice di influione rela~iv~ c quellu del deprotsamrmu msJb.
xay:
1. Months 16. October
2. Rate of depreciation of lira 17. Novembex
3. Rate of Inflation 18. DecembEr
4. Wholesale prices 19. January
5. Weighted average devaluation 20. Feb~uasy
6. Index of depreciation 21. March _
7. Cauntries considered 22. April
8. ItaYY 23. May
- 9. Index of relative inflation 24. June -
, 10. Competitiveness = improve- 25. Year -
ment) 26. Avesage devaluation as againat -
11. (December 1975/months 1978- Aecember 1975, referred to
1979) group of currencies considered
12. variation montha '78-'79/ (L~.S. dollar, FRG mark, French
December 1975) franc, pound steriing)
13. July 27. Product of index of relative
14. August inflation timea index of aver-
15. September age depreciation
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Table 3. Variations (f) in Percentage Points aa against Preceding Month*
Svalutazinne media lnflazione ~ Cumpetitivit5 -
- MESI (1) po~derata (a) ( 2 rclativa (b}( 3 ) I (4 ) (c)
I47d
Mag~io~ ~ 0,1 -U,6 -U.5 �
Giugno -0,4 0,3 -O.R
Luglio 7 - 0 i -U,2 maggiu-agosto (17 )
pgosW $ p,2 0.9 -U.~
Settembre ~ -0,3 0,6 -0.9
Ottobte ~ ~ d,l -~.3 ~�4
Novembre ~ ~ 1,7 U,2 2,U settembre-dicembrc
Dicembre 12 0,4 U,4 U,3 (18)
197! ,
Gennsio (13) 0,1 U,6 -U,4
Febbraio ~ j~~ ) 0,2 0,8 -U, I
Marto ~ 0.2 -U,l q ~ gennaia�rprile (19 )
Aprik -0.1 0.~ -U,6 -
Maggio S 0,2 U 5 --~?.1
Giugno 6 0.1 ~.2 -
Lu tio 7~ -0,5 U,1 -0,6 ma~iu-agustu (17 )
_ Agosto ~ -0.4 1.S -1.6
Settembrc -0.~ ~.4 S
Ottobre (1 ~ 1,1 1,~ U,~
Novembre ~ 1~ 0,3 U,7 -U,1 settembre-dicembre -
Dicembre 12 -0,3 1.8 . � -~�7 (18)
* During the period observed, as against December 1975, the average values
of de~valuation, relative inflation and competitiveness were, respectively:
_ 1976--(a)=16.0%; (b)=13.3~; (c)=-5.0�~:(average improvement); 1977--(a)=21.8~6;
(b)=25.0%; (c)=-2.2%; and 1978--(a)=24.OX; (b)=28.7X; (c)=-2.2X; 1979-- _
(a)=26.0%; (b)=33.9%; (c)=-0.9%.
Key:
1. Months 11. November `
2. Weighted average devaluation 12. December
3. Relative inf lation 13. January
4. Competitiveness 14. February
5. May 15. March
6. June 16. April
7. July 17. May-Au~ust
8. August 18. September-December
9. September 19. January-April
10. October
(a) in the fi.rst 4-month period, the resumption of a higher rate of relative
inflation, accompanied by a limited instability in the lira exchange rates,
resulted in moderate losses of competitiveness;
(b) in the second 4-month period, the wieght of the domestic inflationary
r!hythm, alc?ng with the sc~ttered recoveries in the lira exchange rate, pro-
duced significant dips in competitiveness; -
(c) in the year's last 4-month period, the steep rise in domestic prices was
countered by the substantial average stability of lira quotations: thus, the _
biggest losses of competitiveness, in an absolute sense, occurred mainly in
September and December.
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Table 4. Monthly Gains in Competitiveness for Individual Countr.ies
~ Regnu Rep. Fcd. Migliur~mcmu
MESI ~ 1) U.S.A. ~ 2) Unitu ~ 3~rancia (4 ) TCVCaCJ 5) mrJiu
r-
( 6)1 �b rispeao d dkembro ~97s)
191i � ~
Lu~lio S7 + 4.0 ' - 9,U + 1,6 . - 8,9 - 1!1
Agosto (8~ + S,8 -IU,U ~ + 1.2 - 9.! - I,S
O cobro rc~ I O~ + 6,4 - 9,4 + 2,6 - S.S - 0.6
+ 8,4 - 9.U O,R -l2.ll - I.ll
Novembre (1~~ . + 4,6 -11,(1 - -12,~ - J,11
Diambrc (1 + S,3 1.7 - 1~.6 - I 1, I - i,3
Gennaio 13 ~ -
+ 6~3 -11,2 - !.Z -13,4 _ , y
Febbraio 1~ + 5,9 -11,! - U,! -13,11 -
Marto 1 + 6,1 -12,1 + U.1 -13,6 - 3.11
AP~ile + 5.9 -~14.U + 2,i -tl 5 - :.a
G u~gno 1 + 5,6 -1~.8 1.3 -f11,K - ?.i :
t 6,8 -16.1 ? 2,1 -I1 i - 3.i
Luglio . 7~ + 9,7 -~,1 + ;.h l.4 ~ - 1.7
Agosto 8 +11.7 -i8,2 + 2.7 - 9,4 - u.i
Settembrc 9 +13,2 -15,3 + ;,G � _ g,b + ~.a
Ottobrc 1 +12,0 -14.! + 1.K - K,b + 1.11
Novembrc 11 +12,5 -13,U + 3, ~ _ g,y + ~
Diambre 12 ~ +1b,3 -13.2 + 4,1 . - N,b 3,it
Anno 1476 - 4,7 + I.U -?,6 -I11,3 - S,u
(19) Anno t9'n - o.z - 3.5 + 3.s � - tt.8 _
Anno 1978 + d.2 - 9.9 + 2.K -II.U . _
Anno 1979 + 9,3 -14.4 � + 2.3 -lII.R - 11!1
Key:
1. Montha 11. November
2. United Kingdom 12. December �
3. France 13. January
4. Federal Republic of Germany 14. February
- 5. Average improvement 15. March
6. as against December 1975) 16. April
- 7. JulY 17. May
8. August 18. June
9. September 19. Year
10. October
In the light of these successive indications, it can now be aaserted that
the decline in competitivenesa occurring in August, although connected with
well-known seasonal phenomena, was followed by the feared further rise of
prices in Italy, the duration and extent of which, however, are proving
greater than even the worst forecasts.
A constant observation that has proven common to tt~e three periods examined
is, therefore, the gradual droF in competitiveness chroughout 1979. What is
more, the reversal of trend r~f the competitiveness indicator that occurred
at the end of 1979, although forecast on the basis of the provisional data -
in Auguat, indicates, by its obvious and consolidated n$ture, that the 1976-
1979 cycle has now ended. The negative effecta of the most recent trer,ds in
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international competitiveness will make themaelves felt during the year in
progresa, in which, also because of this reversal of trend, the aupport giv-
en to productive activity by exportation witl be less thara in the past.
In prospect, co traction of the growth ratei~ for export outflow, which ap-
pears lesa profitable, and the consequent a'lowdown in productive actiYity,
aeem to become the most plausible scenario for 1980, even if one prescinds
~from the evolution of the world economy, which is expected to reinforce this -
tendency.
Country-by-Country Analysis
The pre,^.eding analyses of the competitiveneas of the Italian economy as
viewed in relation to that of each of our principal trading-partner coun-
tries havt~ ahown the modifications occurring over time from the initial com-
petitiveness positions established in the first months of 1976--the time
from w~ich the last drastic realinement of lira quotiations dates.
As has been pointed out several times, in 1978 it had already become evident
that our competitive positions vis-a-vis three of the four countries consid-
ered had been completely upset.
In fact, while in the months from January to May 1976 the margina of compe-
titiveness appeared due mainly to the relative advantagea that our producta
could develop within the FRG, United States, and to a lesser extent the -
French economies,in the course of 1977 our economy, because of the different
- evolutions of exchange parity and prices, underwent ateady loases of com~e-
titivenesa precisely in relation to the French and American economies,
though it came to recover competitiven~ss vis-a-vis the United Kingdom.
The years 1978 and 1979 have seen theae tendencies confirmed, albeit with
some temporary exceptions involving mainly extent.
. �
With regard to the last 2 years and relative to each of the countries con-
sidered, the data collected make it possible to note the following:
United States--In 1978, the appreciation of the lira, in a situation of par- -
~ allel evolution of prices, brought considerable losses of competitiveness as
- against the American economy.
In the first half of 1979, the strong depreciation of the dollar, together
_ with the relatively low rates of inflation in the United Statea, saw a wors-
ening of the Italian economy's position, which already was not very competi-
tive. In the aecond half of the year, because of both the further deprecia-
tion of the American currency and the aggravation oE our inflationary sur- -
plus, the preexisting losa of competitivenesa was more than doubled, worsen-
ing our exports' competitive position vis-a-vis this economy.
IInited Kingdom--From Novembes 1977, though, the wide mar.gins of competitive-
ness regairied by the Italian economy appear due more to the levels reached
by the appreciation of sterliag as againat the lira than to containment of
relative inflation.
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The years 1978 and 1979 saw the accentuation of these tendencies, which fav- -
ored the acquisition of higher levels of competitiveness in relation to this
economy; but the extent of this competitivenesa could turn out to be over- -
valued becauae of late rea�linement of lira-sterling parity, when it ia con-
aidered that in December 1975 thie parity appeared quite unfavorable to the
~ English currency.
Especially in the second 4-month period of 1979, the strong revaluation of ~
sterling--although this was countered by a temporary higher dynamic of in-
crease of English prices--favored by the consolidation of the wide margins of
- competitiveness enjoyed by the Italian economy at the end of the yeax. -
France--After August 1976, the modest depreciation of our money was perman-
ently cancelled out by excessive relative inflation, which showed signs of
stabilizing only in the months that preceded the startup of the EMS [Euro-
pean Monetary System].
_ During 1979, though, the recovery of quntations of the franc at a level
higher than the increase of Italian relative inflation vis-a-vis France
' produced an overall situation of improvemetit of Italy's level of competi-
- tiveness, even though tre last 4-month period showed losses of an exte~tt
greater than for the year's average.
FRG--This is the country in relation to which ongoing gaina in competitive- !
ness have been eatablished. They were maintained in 1978 and in 1979 with
annual average values of about 11 percent.
The depreciation of the lira in relation to the mark, which starting xn
January 1976 proved to be of absolute values steadily higher than our rela- _
tive-inflation surplus, showed a reversal of trend starting in March 1977.
In the last 4 months of 1979, the absence of a parallel equali~ing of the -
exchange rate with our higher rate of inflation resulted in competitive- "
ness levels more restricted than in the past.
_ Inflationary Reality, Devaluation
_ In the October report, commenting on the strong increase in the wholesale
price index for August, it was noted that since December 1975, this was the
first time that the residual margins of competitiveness were seen to go all
the way down to zero. This appeared to mean--in the light of previous ex-
perience also--that the overall margin for maneuver on the exchange rates
(more restricte3 vis-a-vis the currencies of the EMS and broader in rela-
tion to the other currencies) had been kept strictly within the limits im-
_ posed by the excess internal inflation, and that for the first time,
therefore, this was happening without leaving room for "residues" of fur-
ther induced competitiveness.
This suggested that eventual recoveries of competitiveness could be achieved
- only in function oi greater depreciation of the lira, or through contain-
ment of the domestic excess inflation.
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_ But ~f this first alternative, which, it has been stressed several times, _
ie of the nature of a temporary expedient, hardly seem proposable even to- "
ward the currencies outside the EMS, it becomes, wi:th all the more reason,
even lesE realistic inside it. It would indeed be difficult to achieve any
modificati~n of the present parities within the EMS, where it is cansidered -
- that the present level of Ita~.ian reaerves aeems sufficient to avert auch
pressures on the lira as to draw in directly the other partners in the ~
�uropean Monetary System.
The urgency of taking rhe aecond alternative, with the nseded strictness,
ie reinforced by the worsening of Italy's competitive position at the end
of 1979. Indeed, as noted earlier, the wiping-out of the residual margins =
was followed, for the first time aince 1976, by considerable loases of com- ~
petitiveness. In the present context, the broadening of the forms of in- '
dexing in our economy mak~s it highly probable that inflationary impulses
greater than those of our competitors will prevail--impulses that must be
brought under control, under penalty of reoccurence of the vicioua circle
of inflation-devaluation-inflation.
_ Pursuing the objective of satisfactory economic growth--enaured by the ex-
istence of adequate levels of competitiveness--requires, in addition to
containment of the domestic inflation rate, growing increments in produc-
tivity, necessary to compensate at least for the effects of the oil price
increases on the development capacities of our economic system.
- The mechanism of indexing of wages, in fact, favors an automatic corrective
to the worsening of the exchange rates, to the remuneration for the labor '
factor, but not to that for capital, reducing the accumulation process and
' therefore the future posgibilities of growth. -
Complementing wk~at has been said above, it can be noted that the influence -
af inflation on the costa-eascni.ngs bala:~ce does not affect all the sectors
- of our economy in equai ~ieasu:~; indeed, there exists in the various sec-
_ ~oxs cap,~ci.ty �o~ carryover of higher c:;sts into prices.
- '!'he ser~=ices br3nch, fcr example, which can show broad structural �lexibil-
- icy, ~n ~~sntrast ~o the industrial branch (especially with reference to =
m~dium-large ~irms), which ~s burdened with innumerable rigidities, cer-
tainly Y~as r~ot Zost positions in equal measure by comparison with the for-
eign competition.
Problems of Strueture; Productivity and Profitability _
_ Starting in 1974, both comparison of the evolution of consumer prices (in-
cluding the prices of "services") and comparison between the general index
of wholesale prices (which include the prices of the products of agricul-
ture) and the wholesale price index for industrial products only, without
the component of energy-product prices, show, on the whole, a price evolu-
tion that has favored the "services" branch and the "agricultural" branch.
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- Table S. Competitiveness of the Economy and Profitability of Industrial
Exports (Percentage of variation in relation to December 1975,
taken as base 100)
Improvementa in
Improvement in competitiveness profitability of
of economy as a whole industrial exports
1976 - 5.0 + 1.6
1977 - 2.2 - 1.8
1978 - 2.2 - 2.5
1979 - 0.9 + 0.9 ,
1979 I - 2.9 + 2.3
II - 2.3 - 0.3
III - 0.1 + 2.3
IV + 1.6 + 4.0
The export prices considered include consumer goods and investment
goods.
- Provisional.
Still with regard to 1979, and with reference to the uaual base period
(December 1975 = 100), it is noted that profitability from exportation of ~
industrial products underwent an abrupt reversal of trend starting with the
third quarter of the year, in parallel with the appearance of losa of com-
petitiveneas for the economy as a whole (Table 5).
_ Oversll Results
This makes it obvious that, in the present experience, industry has f~lt
earlier, noting itbefore the other sectora of the economy,�the appearance of
losaes of competitiveness, and has felt them more than the others, through
an abrupt reversal of the trend of profitability in exportation.
_ While on the one hat~d this shows industry'~ greater senaitivity to the eco-
= nomy's general variati~ns in competitiveness, on the other hard it mskes it
clear that in tenna of price carryover, it is the sector of economic activ-
= ity that carries the biggest burdens deriving from inflation as regards
the e~+port marketa.
COPYRIGHT: 1980 Editrice I1 Sole-24 Ore s.r.l.
11267
CSO: 3104 ~
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COUNTRY SECTION SWITZERLAND
ECOI~OMIC, POLITICAL PROBLEMS OF 1980'S VIEWED
~ Hamburg CAPITAL in German Apr 80 pp 305-308 _
[Article: "Rate of Exchange"] -
[Text~ The allegedly richest country in the world is no longer what it _
once was. Through his recently published book--"Wohin treibt die Schweiz"
[Whither Zs Switzerland Drifting? Munich, Scherz Verlag]--the Swiss public
finance expert Dr Walter Wittmann, 44, professor at the Universitp of
Fribourg and visiti~xg professor in Vienna; demolished a hope: Namely that ~
in spite of all the attacks by the Ayatollah Khotaeyni on the Shah's -
billions in the vaults of the Swiss banks, the country of Wilhelm Te1Z
could be protected from economic upheavals. '
On the contrary: The slender, sporty economist, who belonga to numerous
_ Swisa conrtniseions of experta, discerna acute danger. Ba$ing himeelf on
thorough studies, he formulates his forecasts as cautiously as he climbs
the mountains of his home territory, the Buenden highlands near Bisentis,
to stalk chamois bucks nr to pick mushrooms.
"Now, on the threshold of the 1980's, we are facing the moment of truth," -
writes Wittmann. He claims the next recession will hit the Alpine
republic as aurely as the spring avalanches from the Mont Blanc and the
St. Gotthardt. In fact, the economic conditions in the vaunted model
- country have undergone striking deterioration.
In 1979, the GNP increased by a mere 1 percent and thus ciearly lagged
- behind the production 3ncrease in the Federal Republic of Germany (4.4
percent). On the negative side, the Swiss rate of inflation (1978, only
1.1 percent) approximate~ the German rate (1979, 4.1 percent). As is the
case everywhere, the inflation is fueled by the expenaive petroZ~eum, even -
ehough the country of the franc with its as yet rock-hard currency should
be able to cope with the OPEC price dictates more easily than other -
industrialized nations.
However, the fact that,a alight decline vis-a-vis the deutschmark notwith- -
standing, the Swiss franc is still being t~aded at ~xcessive prices at the
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international foreign exchange markets has had a bad side effect as well.
- It is only with the aid of state subsidies that Swiss industry, SO to 90
percent of which is dependent on exports, can sell many products on the
world markets.
It i$ for the same reason that the tourist industry has been suffering
from a decline in the number of visitors. Walter Wittmann urges the
government and the National Bank "to do everything possible, in order to
_ stem an economically un~ust~fied revaluation of the franc."
The factory ahutdowns in the watc~~making industry show most clearly in _
what direction Switzerland ~r~ay be drifting, if the worst comes to the ,
. worst. In this branch alane, 30,G00 3obs have been lost. But in the
tex*_ile 3nd construction ind~sstries as well, structurally weak enterprises
collapsed. _
= The academic mushroom picker states apenly that the low "statistical
unemplo3?ment" (presently 4.4 pe.rcent) is eyewash, for: "So far we have
been able co 'export' the unamp~oyment, since the foreign workers concerned
- were sent back to their homelands. In the 1980's, Switzerland must expect
= an unemployment rate such as in other highly developed countries is
= customary during economic sl~ps. In addi~ion, there will be structurally
- caused underemploymznt, ali of which may r~esult in hundtceds of thousands
of unemployed." For Swiss conditions, this would be almost tantamount to _
a catastrophe, for IO years ago, only about 300 older workers a~nd office
4 employees were unemployed in any given yea.r.
According to mountain cl:tmber ~littraann, anothe~ E~anc,mic avalanche may be _
triggered by the raeh r~ocial legislationr which was passed in Bern shortly
before the outbreak of the receaston, with~ut regard for long-term conse-
' quences. The young professor urges "to anply modern methods ~f efficiency
� to the social state of Switzer"land;" Witt~:^.n cl~ims that otharwise the _
- State Old Age and Survivors' InsurancE %~und (AHV), from whi.ch every Swiss
obtains a basic pension, may go bankrupL in a few years.
Like the Federal Republic of Germany, th2 Swiss are fa~ing a penaion fund
- collapse, since in the euphoria of the past economic boom t~he legding =
politicians--ignoring the industrialists and the taxpayers--gave full rein
= to their soeial spending impulses and miE~alculated tihe costs of the
guaxanteed ad~ustment to the permanent inflation. Z~he deficit~ must now -
= be offset through increased premiu~ns and higher taxes. _
In addition, the Swiss Social I~enocrats and leftist groups want to obligate
all employers to pay the retirees industrial pensions to comper~sate for the
gaps in the AHV state insurance fund. The trade unions--forme~ly as ueace- _
ful as a glee club--are equally outspoken in p~irsuing the samp aociopoliti-
cal ob~ectives. During times of crisis, the worthy funct3onaries formerly
= recommended to the union members voluntary wage r,uts until the return of -
normal economic conditions. Strikes were as taboo as the plague. Ydung .
62 =
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hothe$ds have long since disabused the old journeymen of this unmarxist re- -
straint. At the Construction- and t~ood-W~orkers' Congress in October, the
leading functionaries announced that they would not forever feel bound to
the peace agreement of 1936, accordir~g to which all point of controversy
were to be settled "by mutual agreement." The trade union bosaes rolled up
th~ir sleeves and threatened to take aggressive steps, unless their "raini-
mum demands" were met soon:
--Reduction of the working time to 40 hours per week (at present, 44 hours
are the rule, and in many enterprises, 48 hours);
--4 to 5 weeks of vacation, and in addition, leave for continuing education;
- --intra-plant codetermination;
- --a more equitable adjustment of wages to the cost of living;
--protection against dismissal in the event of introduction of modern
labor-saving technologies.
German employers can only smile aoout this: These issues were settled by
them and their trade unions a long time ago. But in Switzerland, where the
legislature is for th~ most part 10 to 20 years behind German legislation,
_ especially in regard to social policies, such demanda sound like a call for
_ revolution.
Even WitUrann, the Liberal, is shocked--despite the fact that in his book
- he himself sounded the alarm. But his priorities are different: He feels
- the conf.ederacy should at long last solve those fundamental problems, which
the parliament and the Federal Council have been putting off for years.
In Wittmann's view, the mos t urgent task is the elimination of the federal -
- bud~et deficit of presently 10 million francs, which will double by 1983,
- and the much-delayed total revision of the federal constitution, which has
- been in the works for 8 years.
_ The attempt to increase revenues by introducing the value-added tax was
blocked by a national referendum--a procedure typical of Switzerland. The
Social Democrats and the trade unions now want to close the growing financial
gap by imposing additional taxes on banks and wealthy citizena and foreign-
ers. However, their planned national referendum is unlfkely to be carried
by a ma,jority, since the Swiss direct democratic process does not function
any more.
Wittmann furnishes convincing proof of that: "A sizeable percentage of the -
voters rejects all proposals. In addition, there are the malcontents on the
- right and the left, who are totally opposed to the state in ita present con-
dition. A decidedly larger group of voters has to a great extent written
= off the Swiss state; these voters no longer expect the atate to do anything
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of impoxtance." Not even 50 percent of the citizens entitled to vote turn-
ed out for the federal elections in October.
This unfortunate lack of interest, which reduces the splendid federal demo-
cracy ad absurdum, is attributable to the sterile system of proportional
representatior., which has been in operation for 24 years. After each of the
federal elections since 1956, the seven Bern ministries have been distrib-
uted among the same four (dominant) parties--Liberals, Chrietian and Social
Democrats, and the bourgeois-rural People's Party. Overahadowed by this
large four-party coalition, the other political groupa--ranging from the -
Proteatunt People's Party to the Communist Labor Party and the ultraleftist
Revolutionary Marxist League--are mere backbenchers in the National Council ~
(federal parliament). What is missing is a genuine parliamentary opposition,
without which--claims WitUnann--~'the fundamental problems cannot be solved.~'
- However, the Social Democrats headed by the Basel trade union leader Helmut
Hubacher are not prepared to terminate the agreement concerning proportional
- repreaentation and to cede the political power in Bern to the mid~le-class
bloc. As an opposition party allied with the hitherto weak radical reform-
ere, they would stand a chance only if in the next electiona a catastrophic
economic crisis drove the hi~herto resigned abstainers into their arms.
Wittmann does not dare predi.ct that this is going to happen in the critical
1980's. At any rate, Switzerland's foreign friends, who on account of their
stock and cash deposits with Swiss banks, their valuable insurance golicies !
and their real estate in Tessin, Valais or Graubuenden have so far felt
utterly secure, must willy-nilly get used to this idea: With the usual time
lag, Switzerland is slowly drifting to~�ard the left, while in other coun-
tries conservative �orces are coming to life again. ,
For many a wealthy reader of Walter Wittmann's book, the belief in a safe,
inviolable world between Lake Constance and Lago Maggiore ha~s been shaken.
The Franc Free Again ,
The exchange rate of a currency is the international indicator of the eco-
nomic conditions in the country concerned. Viewed in this way, the normali-
zation of the rate of exchange between the Swiss franc and the deutschmark
signals the end of an occasionally ebullient enthusiasm for the Swiss Re- _
public. -
Federal German fugitives had to pay up to DM 1.32 for 1 franc, if they want-
ed to deposit German money in a Swiss account on Zurich's Bahnhofstrasse.
And even this was possible only under certain conditions: For a long time,
foreigners were not permitted to deposit more than 100,000 francs in
Switzerland. And interest was returned only for a maximum of 20,000 francs.
Now the run on the Swiss currency is a thing of the past. After 3 years
that were distinguished by low rates of inflation, the oil-induced inflation
has gained momentum in Switzerland as well. The alpine republic, which lacks -
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. raw materials, is also affected by the inL.ernational rise in the prices of
metals and other raw materials. _
The Swisa franc has lost its glamour. Vis-a-vis the deutschmark, the rate
has leveled off at approxi.mately DM 1.04 to 1.05. And at the end of Feb-
ruary, the National Bank lifted the ban on intereat on savings accounta
kept by foreignere. Since mid-March, time deposits with a minimum term of
3 months have been permitted as well.
5.t.we~er Fr~nken in Mwrfc 1~ o~r: ~v.~ InOotio~alen in Prozent 2~
~,~Q IO
3 $C~7wC12
8
121) ~ ~ j
100 sfrs in DM I ~ f
+ ( I~ilt~i!' , i f _
~ I ~ ~ ~ i
i~N? I) ( tl , Brundesrcpunl;k
,
~ ~t~ ~
~1ld~ll~ u I -
~ 197h 1977 I')7d 1979 19tW i97U 7l T 73 ~4 '75 76 7. ~S 74
~4
~ Key:
1. Exchange rate Swiss franc/deutachmark
2v Rates of fnflation
3. Switzerland
4. Federal Republic
COPYRIGHT: 1980 Gruner + Jahr AG & Co.
8760
- CSO: 3103 END
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