JPRS ID: 9432 WEST EUROPE REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000300060013-8
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 64
• Document Creation Date: November 1, 2016
• Sequence Number: 13
• Content Type: REPORTS

APPROVEE:) FOR RELEASE= 2007/02/08= CIA-R~P82-00850R0003000600'13-8
~ECEM,~ER ~~BQ%.r
(F.01-10 511# z )
# IP7 ~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAI. I;SE Otil.l'
_ JPRS L/9432
8 December 1980
West Europe Report
(FOUO 51 /80)
Fg~$ FOREIGN BROADCAST INFORMATION SERVICE _
~
FOR OF:ICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
NOTE
JPRS publications contain information primarily frotn foreign
newspapers, periodicals and books, but also from news agency
_ transmissions and broadcasts. Materials from foreign-language
sources are translated; those from English-language sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
Headlines, editorial reports, and material enclosed in brackets
_ are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original inf.ormation was
- processed. Where no processing indicator is given, the infer-
mation was summ.arized or extracted.
_ Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
- Other unattributed parenthetical notes with in the body of an
item originate with the source. Times within items are as
given by source.
The contents of this publication in no way represer_t the poli-
cies, views or attitudes of the U.S. Government.
COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION
OF THIS PUBLICATION BE RESTRICTED FOR UFFICIAL USE OiNLY.
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
JPRS L/9432
8 December 1980
WEST EUROPE REPORT
(FOUO 51/80)
CONTENTS
THEATER NUCLEAR FORCES
FRANCL
Thousandth F.xocet MM-28 Delivery Noted
(AIR & COSMOS, 1 Nov 80)
rtA'I'RA Presents Naval Version of Surface-to-Air Missiles
(Pierre Langereux; AIR & COSMOS, 1 Nov SO)
Defense Budget for 1981 Voted by National Assembly
(AIR & COSMOS, 1 Nov 80)
Briefs
Tactical, Strategic Missile Distribution
COUNTRY SECTICN
INTF.RNATIONAL AFFAIRS
European Aerospace Industry's 1978 Activity Analyzed
(AIR & COSMGS, 25 Oct 80)
Pinancing, Participants of International Terrorism
(:1arcella Padovani; LE NOWFL OBSERVATM, 13-19 Oct 80)
rRAidC E
Draft 1983. Lefense Budget Increases Outlined
(AIR & COSMOS, 11 Oct 80)
= P,t.cisions Expected Shortly on Ari3nes 3, 4
(Pierre Laligereux; AIR & CQSKOS, 11 Oct 80)
New 5atellite Control Center Under Construction in Aussaguel
(AIF, & COSMOS, 18 Oct 80)
- a -
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
1
2
3
6
7
9
19
15
19
(III - WE - 150 FQUJ]

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
Briefs
Derense Cabinet Appointments 21
ITAL`I
Finance Minister's Bill on Fiscal Reform
(IL SOLE-24 ORE, 4, 7, 8, 9, 10 Oct 80) 22
Government, PCI, Labor Proposals for Fiscal Reform _
(Claudio Torneo; IL MONDO, 17 Oct 80) 41
_ Bank uf Italy May-June 1980 Statistics
(Livio Magnani; IL SOLE-24 ORE, 23 Oct 80) 48
NCRWAY
Stockpiling Debate Accentuates Splits in Socialist Party -
(Ragnar Kvam, Jr; VECKANS AFFARER, 6 Nov 80) 52
SPAYN
Biographic Details on GRAPO Terrorist Leader Isabel Llaquet
(CANBIn 16, 26 Oct 80) ................................o...... 56
- -b-
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFTCIAL USE ONLY
THEATER NUCLEAR FORCES
THOUSANDTH EXCCET MM-38 DELIVERY NOTED
Paris AIR & COSMOS in French 1 Nov 80 p 45
[Artic.ie: "Delivery of Thousandth Exocet MM-38 Missile"]
FRANCE
[Text] On 28 October, Aerospatiale celebrated the delivery of its thousandth Exocet
MM-38 antiship missile.
More than 180 warships of all types and tonnages are now or will be armed with the
MM-38. As now scheduled, it will be 19$6 before the last ship is equipped with
this missile.
Ttie very high success rate of the rore than 110 launches conducted since 1974 by the
various navies that have purchased the system has demonstrated that its reliability
is much greater than the initial specifications. Periodic checks have also con-
firmed this high reliability. As a result, navies have been able to lengthen to
18 months the period between schcduled periodic maintenance i.nspections.
The Exocet antiship missile family also includes:
' a. The AM-39 naval air-to-surface version which has been operational since 1978.
It has been or is currently being adapted for use with six types of aircraft or
helicopters for the five countries that have already ordered the system, including
France for the Super Etendard [naval strike fighter] and the Atlantic ANG [antisub- _
- marine warfare aircraft]. The AM-39 is now being proposed as armament for Aero-~
_ spatiale's AS-322 Super Puma-heZicopter.
b. The MM-40 naval surface-to-surface version which has been ordered by eight
countries, including Franc~ for r.he French Navy. Aerospatiale believes that the
MM-40's range and accuracy will remain optimal until introduction of the future
supersonic ASSM naval surface-to-surface missile. Development of the MM-40 has now
been completed ar.d regular production has begim. Delivery of production missiles
will begin in early 1981.
c. The SM-39 version is under development for the French Navy as axmament for
attack nuclear submarines.
CQPYRTGHT: A. & C. 1980
8041
CSO: ?100 -
1
FOR JFFICIAI. USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLX
THEATER NUCLEAR FORCES
I~,ATRA PRESENTS NAVAL VERSION OF SURFACE-TO-A.IR MISSILES
Paris AIR & COSMOS in French 1 Nov 80 p 45
FRANCE
[Article by Pierre Langereux: "MATRA Introduces tdaval Version of SATCP"]
[Text] At the recent Naval Show (Salon Naval), I4ATRA unveiled plans for a naval
version of th e new very short-range surface-to-air missile (SATCP). The French
Ministry of Defense recently selected MATRA to develop this missile.
The SATCP is to be devel'ope3 in three veraions for the army, navy and air force.
In its basic versian for deli.very to the army and air force, the SATCP will be a
light--about 20 kilograms--man-portable weapon to be carried in two loads, namely
missile and launch unit. The SATCP can also be turret-mounted on a vehicle for
arnry use or on ships for naval use. In its naval version, this weapon system will
- provide local air defense for sriips of all sizes and particularly fan small craft.
The SATCP will be guxded to the target by an infrared seeker developed by SAT
[Telecommunications Corporation]. It wi11 thus have the capability of intercepting
any aircraft approaching at very low altitude and maneuvering sharply, and likewise
any attack helicopter even when masked behind a hi11 or screen of trees. The
missile's cooled infrared seeker_ has very greaC sensitivl.ty--much greatez than, for
example, the Magic air-to-air missile-- thereby giving it an extenaive sphere of
action while still shielding it from interference (blinded by the sun). The
missile has been aerodynamically designed especially to optimize its operational
employment against aircraft dnd helicopters. The missile's rocket motor--developed
by SNPE [National Prapellants and Explosives Coffipanq]--ttas the design capability
' of intercepting superaonic targets. The 3-kilogram warhead equipped with sproxi-
mity fuze is capable of destroying an aircraft. An identification friend or foe
(IFF) capab ility can also be added to the weapon system. When delivery of pro-
duction SATCP's begins in 1986, t:ne missile will be unmatched in its field. Its
- performance characteristics will be clearly superior to those of the Soviet SA-7
- missile and American Stinger misaile.
COPYRIGHT: A. 6 C. 1980
8041
CSO: 3100
2

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
THEATER NUCLEAR FORCES
DEFENSE BUDGET FOR 1981 VOTED BY NATIONAL _".SSEMBLY
Paris AIR & COSMOS in French 1 Nov 80 p 11
[Article: "National Asse.mbly Passes 1981 Defense Budget"]
FRANCE
[Text] After deliberating for three sessions, the National Assembly adopted the
defense budgeC for next year on 23 Ocltober.. The approved budget was unchanged
- from the draft budget presented earlier by former Defense Minister Yvon Bourges to
the Assembly's finance and national defense committees.
Joel Le Theule who has been defense minister for the past manth, upheld the pro-
prosed budget prepar.ed by his predecessor.
1fie morning session and a good part of the afternoon session wexe dPVOted to hearing
various committee rapporteurs whose pr3.ncipal critical comments are reported in full
below.
- Mr Cressard, special rapporteur for the finance committee, made the following
observations:
"First of all, the defense 'blueprint' becomes a bit more illegible every year. As
a result, this year, in order to enable us to make objective 3nalyses, we had to
recast the budget in i[s 1980 format.
"Secondly,...there was na need to indulge in bookkeeping wanipulations in an effor*_
to make credulous persons believe a better job was being done than possible. Why
_ were the f unds for pay raises transferred this year to the defense section of the
budget instead of leaving them in the counnon funds section?"
Cressard considered the inerease in capital spending to be less that planned, and
_ he warned that "next year, the gavernmenC will have to make an effort to abide by
the p-rogramming 1aw."
Cressard concluded: "The finance coumiittee will closaly observe the preparation of
the next programming law and hopes the government wi11 inform the Assembly of that
law on a priori*_y basis. Indeed it is not n.ormal for Parliament to learn of impor-
- tant decisior.s through the press."
~
Mr. ftossi, special rapporteur for Title 3 [operations and maintenance], confirmed
- the "transfer" mentioned by Cressard: "A change in the appropriation of programmed
3
F(lR f1FFTf TAT. 1TRF (1NT.Y
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFIGIAL USF ONZY
- mxintenance funcls totaling some 900 mi.llion francs for the Frocurement of spare
parts, transfers to Title 5[equipaent] expenditures wtaich up to now have always
come under Title 3." 5peaking for the f.inance cotnnittee, Rossi ca11Pd partir_ular
atte7tion to the fact that "if increases in the price of petrcl.?um products should
t7appen tu exceed the estimates used ir, camputing allocationa, supplementarS funds
wculd then prove necessery to prevent a recluction in the activity of thp forces
becauae of a lack of fuel."
Pierre Mauge:, the national defense committee's speci-il rapporteur for the common
= section and ti?e budget supplement for the Armed Forces Fuels Ser.ti icP, made the
iollowing important statement about the latter: "The budget supplement for the
Fuels Service will amount to 4.1093 billion francs, an increase of 66 percent over
- Ltis year�5 ii.gure. This exceptional increase is obviously related to higher fuel
prices. It should enable all services to accomplish the missions assigned them
by the governmeat. Gie do, of cour.se, not2 a slight reduction in the amount of fuel_
allocated to the air force. NeverL�heless, the latter has stated that wiCh the
fuel resources allocated to iY, it coi:.siders itse2f capable of fully achieving the
~ objectives ttiat had been assigred it for the coming year."
Such was not the opinion of Jean-Pierre Bechter, the national defense cotnmittee's
special rapporteur for regular expenditures [operating and peraonnel costs]. He
expressed his and also the committee's reservations in the following terms: "What
gives defense committee members and this rapporteur t.he most concern is unquestion-
ably the problem of the activity of the force:; which depends on both the qual'ty of
training ammuniCion and the amount of fuel allocated.... "
In concluding his report, Bechter requested that fuel procurement be expressed i.n
quantitative terms and not in budgetary terms "Puels must be separated from
Title 3. The various services must define their fuel requirements and, each year,
the governnent should, for its part, schedule the corresponding budgetary resources."
Mr Cabanel, the national defense committee's special rapport:eu-r for capital expen-
ditures, said that "the proposed defense budget for 1981 is satisfactory but
must be assessed w.tth caution."
"Analysis of the distribution of capital investment funds among the three services
shows that the navy saction has the grestest increase in program obligational
authority, namely + 29.8 percent.
"I'he army section cotrzs next with an increase of +22.1 percent, followed by the
common section: +19.4 percent, the gendarmerie: +15.7 percent, and lastly, the air
_ force section with +14.0 percent. 'I'he latter may be reason for some concern."
"'Phe breakdown for outlays is nearly comparable. The army section has the greatest
increase with +28.9 percent, foliowed by the navy section with +24.65 pe.rcent, the
gendaruierie with +18.4 per.cent, the air force section with +17.25 percent and the
common section with +11.84 percent.
"If we make a detalled analyais of funds allocated to the different ser�aices, we
nute that the air fo,:ce has a budget which barely meets its requirements but is,
nevextheleas, sufficient for 1981."
4
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
Loic Bouvard, thp national defense commititee's special rapporteur for the air force
section, conmented harshly: "This proposEd budget is barely acceptable."
"Zt marks a defini[e pause in Title S program obllgational authotity for equipment,
and may be fraught with consequences for the -future. As a raatter of fact, the air
for.ce has never been able to hold the positian amorg the armed forces which the
programming Zaw had finaneial.ly reserved for it. It continues to receive 21.2
percent of defense funds instead of 22.2 percent. Even more serious is the fact
that Title S program obligational authority is increased only 15 percent from 1980
to 1981, cor^ired with 35 percent frnm 1979 to 1980 and with 22.5 percent for the
armed forces as a whole from 1980 to 1981. The financial efforz in support of the
nuclear forces and the increased support of the navy undoubtedly explai: why the air
force has been comparatively sacrificed. But will the shortage, as it we-re, of
2 billion francs in program obligational authority ever be retrieved?"
Jean Bozzi, the national defense commi.ttee's special rapporteur for the army, com-
mented as follows on. Titles 3 and 5 funds: "The problem is whether the army wl.11
be able to improve the combat reanineas of all its units in the next few years."
On the other hand, "the increase in funds allocated in Title 5 for armament research,
- development, and production is satisfactory: [words illegible] armed, jointly
with the FRG; development of the Hades tactical nuclear [missile] system to
replace the Pluton system: Milan miss'Lles for antitank units and HOT missiles
to equip eeven helicopter flights; equipping four regimente with RoLard [surface-to-
sir] misailes; and development of the SATCP [very short-range surface-to-air missileaJ
scheduled to go into production in 1984."
Minister of De�ense Joel Le Theule spoke at length in an explanatory vein about all
- of the pofnts mentioned by the different speakers. In his opening statement, he
gave the National Assemhly rhe following assurance: "The problem of information
- and of Parliament's analysis of budget data is a very real problem. I will give
my most careful attention to any suggestions offered me on this subject, because
- information is one field I intend to treat as a priority. For that matr.er, I
have asked my staff director and my special assistants to assume responsibility
for information matters in the Ministry of Defense."
COPYRIGHT: A. & C. 1980
8041
- CSO: 3100
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFZCIAL USE ONLY
THEATER NUCLEAR FORCES FRAIvCE
BRIEFS
TAC'LI('�AL, :."PRc1.'CEGIC MISSILF. DISTRIBUTION--The Technical Directorate for
MissilQe (DTEn), which is rpsponsible for study and development of French
strategic and tactical missiles, this year will preaent antisurface vessel
miasilee of the "Exocet" (HM 38, MM 40 and AN. 39) famiLy and the "C22" iianing
miasile [engin-cible] developed by AEROSPATIALE ~I3ational Industrial Aerospace
Agency], as well as "Magic," the Matra air-air missile and the Thomson-CSF
"Crotale naval" weapons system which employs a Matra missile. T'homson-CSF
is continuing maas prcxiuction of the sea-air weapons aystem, "Crotale naval"
whose tests and valldation were condiicted in the spring of 1980 and produced
a dozen consecutive fluccesaful firir_gs. 't'wo production line consignments are
eaxmarked for the National Navy. The firat consignment, already half completed,
hae nine firing unita (each equipped with eight ramp-mounted missiles) 3estined
for eight surface vessels and the Saint-Mandrier Naval Instruction Center.
Several foreign navies are now consi.dering adoption of the "Croton naval,"
_ ThoNe.an-CSF has announced. [Text] [Paris AIR ET COSMOS in French 25 Oct 80
_ p 55) 8143
CSO: 3100
6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
COUNTRY SECTION
EUROPEAN AEROSPACE INUUSTRY'S 1978 ACTIVIT`1 ANALYZEL
Paris AIR ET COSMOS in French 25 Oct 80 p 11
INTERNATIONAL AFFAIRS
[Article: "EEC Analysis of European Aerospace Industry"]
[Text] The "domestic market and industrial affairs" directorate of the European
- Community Commission recently released its annual statietical analysis--Ref.
SEC (80) 1287--of the European aerospace industry. It describes the aerospace
_ sector's status as of 31 DecQmber 1978.
This EEC analysis highlights the following -trends in volume of business and in
employment.
Volume of Business
While the Eurapean aerospace industry's 1977 volume of busine ss dropped below the
comparable 1976 figure, at constant prices and exchange rates, Che year 1978, in
contrast, was marked by a resurging growth of about 3.3 percent over 1977 and 1.6
percent over 1976. The American aerospace industry's grawth was more rapid, how-
ever: 8.7 percent in 1978 over 1977 and 9.2 percent over 1976. Export sales
increased their ahare of the volume of business done in 1978 (41 percent) at the
expense of governmental procurement's share (49.6 percent) and the domestic civil
roarket's share (9.6 percent). Hence in 197$ there was a reversal of the trend
observed in 1977 when government purchasea accounted foz 64.9 percent of the voluvne
of business and exports for merely 21.7 percent.
- The French aerospace industry pulled ahead of the f ield from the volume of business
standpoint: 4.22 bil lion UCE (European units of account) at constant prices and
3.482 billion UCE at 1975 prices and exchange rates. The French industry's volume
of buisness represented 1.14 percent of the gross domestic product versus 1.6 per-
cent for British industry and 1.45 percent for American indus try. It is noted that
France was the country that exported the 1Past to industrial firms in other EEC member
states. .
Employment
The EEC notes that annual fluctuations in employment within the Community precluded -
determination of a definite trend., By and larqe, however, the aerospace sector
can be considered to have a certaiTt stability which compared to the increase in
volume of business is an indication of increased productivity. According to the -
- EEC, the number of p ersons employed within the aerospace industry in 1978 was 421,176
compared with 967,000 in the United States, 33,800 in Canada, and 25,398 in Japan.
7
FOR OrFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOK OFFICIAL USE dNLY
This report a1so Sncludes data on public financing of research and development con- -
ducted hy civil ae=ospace activities.
An appendix to the report contains information about the Spanish aerospace indusrry.
CUYYRIG};T: A. 6 C. 1980
g041.
CSO: 8129/0165
8
: ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-00850R040340060013-8
FOR OFFICIAL USE ONLY
_ COUNTRY SECTION
INTERNATIONAL AFFAIRS
FINANCING, PARTICIPANTS OF INTERNATIONAL TERRORISM
Paris LE NOWEL OBSERVATEUR in French 13-19 Oct 80 p 51
(Article by Marcelle Padovani "Terrorism's Great FinanciPrs"J
[Text] The destabilization of Europe is of interest both for
the pawer b ehind it, and the abundance of capital flowing from
al1 s ides into the cof f ers of the "reds" and the "b lacks
"Black Internationals," "Euronazism," this secret organization was spotcen of in
Italy a long time ago, and it was believed that the organization wanted to desta-
bilize the penineula democracy. It must be sairi that t0 long years of terrorism,
- both "black" (1969-1974), and "red" (1974-1980), and then "black" again with the
murder attempt of Bologna (2 :agust 1980, 84 dead), pravides Ltalian terrorist
exper[s ana sociologists with a long history to analyze. Another "privilege" in
Ir_aly should also be pointed ost: that of being the favorite territory of European
secret services and a necessary turntable for all those who are traveling to the -
Middle East. For a long time, Rome has been an "open city" for all sorts of
_ international plots.
Here, the Libyans have 1,000 spies (they may have 100 flats available for their
assassi_ns). It is said that here che Israeli secrst services make contact with
the Miericans who would also like to destabilize Euxope so as to avoid playing the
rule of wet-blanket in the wholesale partition of the world between Moscow and
Washington. Here, the Palestini_ans are kings. Just think about it: all of the
Palestinian terrorists arrested in Italy for various murder attempts have been
expelled within a very short period of time through the intervention of the Italian
secret service, the SID, either by paying the bonds necessary for their release, or
by directly accompanying these terrorists, in military planes, to the cauntry of
their choice.
Fresh news of international. terrorism? It is contained in a document that the
right arm of Yasser. 'Arafat, Abou Ayad, may have--if we believe the revelations of
the weekly PAPIORAMA 15 September issue--had distributed to the magistrates investi-
_ g4ting the Bologna attempt. In this text, Abou Ayad may have told how he was informed,
= about a year ago, of the presence of foreigners in the Aqoura training camp, in Libya, -
- which is held by the pha:langists. Ayad may have made contact with two Germans who
were being tra ined in this camp, and forced them to talk. They may have revealed -
that in Novemb er 1979, f.rom 30 to 35 young European fascists (Italians, Spanish,
9
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
- FOR OFFICIAL USE ON7,Y
Germans, French) were in *raining in Aqoura. YANOi2AMA contirLues its revelations
by stating that a neo-Nazi camp may have been organized this summer at La Roche,
in Belgium, with Frenchmen, Flemings and Germans, including the famous Karl Heinz -
Hof_ f.mann.
- 3ome idea of how Ltaly approaches thc inter.national aspect of the "black" ar.d "red"
- fuctions of terrorism, from conversations with the authorities in some police
hureaus, and with some expert observers. 1fie firs t point in their reasoning is
simple: where is the money coming fron which permits these organizations to exist
underground and to procure arms and munitions on d emand, uiiless there are a great
ukany financj.ers? The policy association magazine prepared an estimate. In the city
f Turs.a alone, 22 "red" terrorist hideaways have b een f ound. This type of organi-
,!ation reeuire;, considerabl.e investments far the ptirchase of flats, arms (one
inactiine gui; costs 8,000 lire on the black market), and pquipment for falsifying
Identificar_ion pzpers. TF:2 police association estimates the cost of a s:ngle cache
- at 200 millioa ?.ire. Multiplyii:g by 22, we arrive at 4 billion 400 million lire
for the city of 'Turin alone. To this must oe added the cost of some 300 other
caches discovered elsewhere, and the pay of the underground members.
'rhese estimates are only f.or "red" terrorism, but the Italian experts are becoming
increasingly convincec that al.thaugh the men and the organizations of tie two
terrorist factions are profoundly different, the financing may well have something
in comnon.
Don`t the "reds" and the "blacks" have the same goals: to cause the downfall of
this democracy which is only a cover for authoritarianism in the eyes of the former,
aad is not authoritarian enough for the taste of the latter? Member.s of Sismi (the
Italian secret service responsible for national defense) states that there are
many powerful groups in the world--in Europe, the Mideast, Af*ica and the United
States--capable of financing both the red brigades and the neo-Nazis.
Sometimes, there is a tendency, at least in leftis t circles, to think that Israel
and Libya could be the interfaediaries for Annerican financing, while Czechoslovakia
and South Yemen may be the great financiers who are dealing in the name af the liSSR.
The Automobile Channel
The Minister of the Interior, Virginio Rognoni,has given the parliament a specific
example: a group of "independents" from Milan may have received a sum of 70 million
lire, which may have come to them through the Czech automobtle firm, Skoda, which -
also ;nanufactures arms. Other information: in East Germany, there may be training
- camps for "red" terrorists.
As for the "blacks," the connections may be more traditional: the neo-fascist
Italians may be cl.oseiy allied with their counterparts in Spain, who are still
active. r^ascists from the Guerrilleros del Cristo Rey may still be used today by
the Spanish secret service in hunting for Basque s eparatists, as well as former
members of the OAS, and some members of the local population. The reform of the
Italian secret service in 1977, and that of the Po rtuguese secret services after
the 1978 revolution, have sent hundreds of right-wing extremists "back to nature,"
and it is not known exactly how they have been "re classified": do they make up
the reserve army of "black" terrorism today?
10
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
And no one is forgetting Qadhafi, either: in any case, hundreds of trained
terrorists may ilave passed through the camps at Ras Ilal, Ain Zara, and Bir el-Ghanem.
According to on2 authority in the police associstion, Franco Fedeli, editor of the
I NEW POLiCE review, 56 years old, and a socialist, "the goal of international terrorism
is to weaken l;urope .'_n the world, and to prevent her .from playing an important role.
, Ireland has craated so much tension in Great Britain that the latter country finds
itselz in z politically inferior situation. In Italy, terrorism has kept the
- Conaunist Party from power. In France, it will undoubtedly cause an authozitarian
. hard line in political."
t.U?YRIGHT:1980 "le Nouvel Observateur"
9174
CSG: 3100
- 11
a
rOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAI. USE ONLY
(for whicfi. a 70 percent funding increas-e had to be allocated, in
terms of tfie 1980 budgetT, the increase in Title III is 13.9 per-
cant, which.is- less than the average increase Cup 16.3 percent for
- operating Expenses of the civili:ar_ budget.
These two tablES (Title III, ordinary expenses; and Titles V and VT,
capital spending} can be used to make quick comparisons.
_ .
~
3)
i i
i i
-
- -
'35+
_ ~ . ~ ,:I I
i : ! ~
:9e0
.:ua �c..cai
I ~ I I
I I
(6)
I
1 I:~c:~on co~mu-~ I . � I
I
:5'4' 1.7:?3
.?�.3:7'30:0 ::1::5:W.' 71.J.] 3:?
j !S~cuona..(7) +;3i:C7._0
:'5::0:0:
.=?3':7:.J
=
-'i_2.:4::CG '0:33.7'?.'.1
'
S I
9_s:....,
_.7 3:3
Vrf
I i;. ..0 . . . . program referred to in the preceding para, set up on a regio-
nal basis and approved, within one year of the entry into effect
of the present Act by decree of the finance minister in concert
with the ministErs for treasury and public works and published
in the GAZZETTA UFFZCIALE of the Italian Republic. Alterations
to the program shall be made according to the same procedures.
Article 22 (Program for extraordinary action to provide
housing for finance administration personnel)
The finance minister, in order to assure the smooth operation of
ttie central and outlying finance offices, including provision for
staff m.obility, is empowered to draw up and implement, wittiin the
5-year period following the entry intQ effect of the present Act
and for localities in which the aforesaid offices shall be sited,
a program for acquisition and construction of buildings of an
economical type for use exclusively as housing to be rented to
civilian employees of the finance administration.
The finance minister, for localities where financial offices are
to be sited and where it is not feasible or advisable to purchase
or construct buildings, and in any case until such time as the
- program referred to in the preceding para is completed, is autho-
rized to stipulate with the welf are institutes of the treasury or
- with other welf are and insurance agencies agreeraents to rent
- 36
FOR OFFTCIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
~
- FOR OFrICIAL USE ONL1
buildirigs owned by the same for sublease to civilian employees
of the finance administration.
Z'tic-; government is delegated power to issue, within 6 raonths of
t}xe entry into effect of the present Act, with one or more de-
= c rec,s having the Force of law and under the procedures envisaged
uricler paras 1 and Z of article 2, standards governing the draft-
ing anri implementation of the program referred to in para 1, the
agreements, referred to in par-a 2, and che rentirig or sub-letting
of housi.ng.
The c:overnment shall exercise its delegated powers as stipulated -
in the preced ing para, in adherence to the fallowing guidelines :
l. the ecc{uis;i;ion and construction program shall be based on
ttie needs of individual. offices, taking into account the diffi- culty of finding housing and of posting personnel on request; _
2. the program may contemg'late acquisition and construction of �
bui'ldings destined both for f. anily housing and for single persons
with common services, to whom the provisions of article 26 shall
be extended; -
3. provision must bP madefor a-u;mii,isL-ering the building, and for
_ the provision of joint services;
q. provision shall be made for exemptions from the law limiting
- the housing units owned by the welfare and savings institutes;
5. criteri.a shall be established for assignment of housing on
lease or sublease; .
6. leases and subleases shall be subject to the general ru1_es
governing such matters, including those relating to fair rents,
_ aside from the exemp-tions established by the delegated rules;
~ rules shall be laid down governing termination of assignment
and the consenuent dissolution of contracts, in connection with
the termination of service for any cause whatsoever or his trans-
fer to another office of the service. -
Article 23 (Siting and construction of real property)
~ The finance mir,ister shall provide for the siting of the necessa-
ry installations for implementation of the program referred to in
the preceding articles 21 and 22, within t;he meaning of article
- 81 or PJ 616 of 24 July 1977�
Construction of buildings referred to in articles 21 and 22 may
be entrusted, if necessary under an exemntion from existing regu-
- lations, under contract to a corporation with a prevalence of -
state participation, even indirect. The rules laid down in PL
37
F'OR OFFZCIAL USE ONLY ~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
584 of 8 August 1977 sha11 not apply, even when execution of the
work is awarded under a contract for construction only.
Wherever possible, areas owned by the state sha11 be utilized or,
should there be none available, acquired through expropriation
in the public interest, or by means of exchange or purchase and
sa1P. For purposes of exchange the provisions of royal decree
no 2000 of 19 September 1923, as converted into PL 473 of 17
April 1925, shall apply, even in cases where the areas offered
the state in exchange are of greater value.
Approval of the complete work plans referred to in the preceding
_ paras shall be equivalent to a declaration of public interest
and the work invollred shall be dPClared urgent and impatient of
deferral, even for purposes of the application of the provision
coiitained in PL nOl of 3 January 1978.
The provisions referred to in tile preceding paras shall apply
also in cases of modernization or restoration of government pro-
perty destined or to be destined :a premises For offices of the
f inance ministry.
Article 24 (Ext raordinary building maintenance)
The finance ministry shall provide for the extraordinary main-
tenance of buildings used for its own centraT and' outlying offi-
ces and for related social services, for housing for personnel
and for premises of the central and outlying training centers as
well as accommodations for students attending the central tax
sc:hool, and the cost of such maintenance shall be entered in the
proper- item in the budget forecast for the said ministry.
The finance minister may delegate to the individual in charge
the faculty of making commitments of the aforesaid budget appro-
priation, within the limits and under the procedures stipulated
_ in the special decree.
Article 25 (Rent or leasing of real estate)
~ During inii;ial inlplementation of the present Act expenditures for
t he lease of premises to serve as central and outlying off ices
- and related social services may be incurred, if necessary under
an exemption of the rules of the government accounting office,
with the exclusion of any sort of unbudgeted management.
Article 26 (Acquisition of real estate)
The detached section of the general superintendeL.t
assigned to the f inance ministry may effect as it
on the open market and under an exeraption from the
of the government accounting off ice and of article
of 28 September 1942, expenditures relating to the
38
FOR OFFICIAL USE ONLY
of the state
sees fit, even
regulations
14 of PL 1140
purchase of
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
= acquisition of real property, furnishings, and all technical and
instrumental means requisite to the initial installation of cen-
tral and outlying offices, of the necessary social services and
of the central arid outlying instruction centers and those for ac-
commodation of students at the central tax school.
Par-ticular care sha11 be t aken to improve and upgrade the equip-
meilt in the premises of cixstoms offices, customs chemistry labo-
i�atories, and those of the indirect tax offices and those of the
= manufacturing tax offices.
Ti_r_lc- %'--Final Regulations
Article 27 (Corimitments to spending)
For purposes of implement ation of the authority delegated and pro-
vided under the preceding articles, insof ar as concerns matters
relatirig to the legal and ecunomic discipline of personnel, total
expenditures of 130 billion lire are authorized for the 3-year
period of 1981-1983�
To meet the expenses related with completion and adjustments to
the data processing system referred to in the preceding article
20, as well as those relating to extraordinary maintenance of
the property referred in in the preceding article 24, a.nd to
those relating to the leasing of real estate referred to in the
preceding article 25, expenditures of 120,800 million lire are
- hereby authorized.
� For completion of programs of extraordinary intervention covered
in the preceding article 21, the f inance minister is hereby au-
thorized to commit funds up to the swn of 1,500 billion lire,
with the understanding that payments may not exceed the limits
of the appropriations entered in the proper chapter of the spencl-
ing forecast for the finance ministry, to wit:
75
150
300
300
300
225
150
billion
billion
billion
billion
billion
billion
billion
lire for 1982
lire for 1983
lire for 1984
lire for 1985
lire for 1986
lire for 1987
lire for 1988�
For completion of the program of extraordinary intervention refer-
red to in the preceding article 22, the finance mi1 lireby
authorized to make commitments up to the sum of 350 billion
with the understanding that payments may not exceed to limits of
the appropriations entered in the proper chapter of the forecast
39
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
of expenditui es for the finance ministry, to wit :
50 billion lire for 1981
100 billion lire for 1982
100 billion lire for 1983
75 billion lire for 1984
25 billion lire for 1985.
Distribution of the appropriations referred to in the previous
= paras may be modified in response to actual requirements connec-
ted witil t;he status of work in progress, with suitable regula-
tions to be inserted annually in the appropriations bill for the
national budget.
As for the acquisition of real property referred to in article
26 for each of the 7 fiscal years following the date of entry -
' into effect of the present Act, authorization is hereby given
= for the appropriation of $ billion lire to be inserted into the
preliminary estimate of expenditures of the finance ministry.
Article 28 (Financial expenses)
Provision is hereby made for expenses deriving from the implemen-
tation of the present Act, assessed for fiscal 1981 at a total of
92,670 million lire, of 42,670 million lire and of 50,000 million
lire, by means of corresponding reductians, respectively, of the
appropriations listed in titles 6856 and 9001 of the treasury
ministry's predicted expenditures for the same fiscal year.
The treasury minister is hereby authorized to perform, through
his own decree, the requisite changes in his budget.
COPYRIGHT: 1980 Editrice 11 Sole-24 Ore s.r.l.
- 6182
CSO: 3104
40
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
COUNTRY SECTION
GOVERNMEAiT, PCI, L,ABOR PROPOSALS FOR FISCAL REFORM
Milan IL MOh'DO in Italian 17 Oct 80 pp 18-21
[Article by Claudio Torneo: "The Antidragon in the Pocketbook"]
[Text] The crisis has prevented the Reviglio proposal on tax
relief from being discussed. But it will be impossible to
- aidetrack it: its author is not the only one exerting pressure
in this direction.
ITALY
It hae only been one of the many banana peels on which the government has slipped,
but it has certainly contributed greatly to enliven the hours which preceded
Francesco Cossiga's dark Saturday. In 'Lact, between Thursday, 25 September, and _
� Friday, the 26th, Finance Minister Franco Reviglio was destined to come into harsh
conflict with hie colleagues of the economic troika who asked him Co postpone the -
- bills on tax relief until the state's finances were in better condition.
- The governnent crisis then intervened to cut the dispute short. However, whatever
his poliCical makeup, the new executive will have difficulty sidetracking the
proposal. In fact, Reviglio (who, if he remains minister, does not intend to
waver from the principle of reducing taxes for the downtrodden by gradually seeing
~ to it that those taxes are paid by evaders) will not be alone in fighting the
battle; there will also be the unions and the PCI. On Thursday, the 25th, when
intense pressure had been put on Reviglio to persuade him to renounce his proposal,
Luciano Lama, Pierre Carniti and Giorgio Benvenuto telephoned to Cossiga to -
impress upon him the idea that tax relief could not be further postponed. And
even t:ie comunists were about to relaunch the project--presented to the senate _
in August during the debaCe on economic decrees--which particularly provided for
a revision in the rates beginning 1 January 1981. In short, the tax problem is -
- now more than ever the order o� the day and will very likely be one of the first
items for discussion on the parliamentary calendar once the government crisis is
ended.
But what would be the definite advantages for the taxpayers? What criteria have
inspired the proposals already made? IL MONDd has reconstructed and given a _
- comparison among the three proposals on which the political debate will be
centered: that of Minister Reviglio, not yet publlshed and whose contents are to _
be revealed for the firat time; that of the unions; and that of the PCI. All
these projects are aimed at reducing and partially neutralizing the effects of the _
41
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
fiscal drag: that is, they resolve to avoid an artificial increase of fiscal
- presaure on the growth of monetary fncome due to inflation. In fact, in view
of the lack of corrective measures, the million or so lire cost-of-living increase
which the workera will find in their pay envelope next year will suffice to produce
rates two or three points higher.
Reviglio Proposal
Resulting from a lengthy effort begun at the end of February, the Reviglio proposal
contains two principal objectives: to minimize the upward curve in rates beginning
in 1981 and caduce the tax burden on families in which only one person is working.
The operation, which will cost a toCal of 1.65 trillion lire, is designed to
complete the action begun this year with the increase in tax deductions and a
doubling of family allowances. "The increa.se in deductions," Vincenzo Visco, one
of Reviglio's most respected advisers, explains, "has protected low-paid workere the
- most, and a revision in the upward curve will substantially compensate medium-income
workers who are the ones hardest hit by the fiscal drag." However, in terms of
hard caeh, according to the finance minister's calculations, the total wage picture,
, that is, the overall compensation of subordinate employees, will be completely
covered by the fiscal drag both in 1980 and 1981. In fact, in view of greater tax
withholding due to inflation and estimated by Reviglio's experts to be 2.718
trillion lire in 1980 and 2.8 trillion in 1981, wurkers are receiving 2.75 trillion
this year (1.8 trillion for the increase in deduCtions and 950 billion for family
allowances) and will receive 3.2 trillion next year (1.65 trillion through the
correction of the curve and an increase in deductions for families with only one
breadwinner and 1.55 trillion for the increase in family allowances). -
Tab: 1` Ma1lovlrav'id`o gli scay1toi1r-131 :
.
. Scaglidni d!�reddilo e aliquote~.lorde : ~ 2~. . �
.
Slslema aHuala PtopaNo Revlqllo
~4.). Progrlto Pc! ( 5
Scaqlionl
-.All-
5crylloni .
All-
� Sesgllonl
' All-
�(In mllionl
quol
(le mlNonl
~ `quob
: (In mlllonl
quo!
6 di IIre)
. dl Iln)
dl Iln) .
0 - 3 : , ;704 .
,
.
� , ,
da3a4 .
. 13 .
.�0-4 .
1046
0-4
1096
da4e5
...16
.
.
da5a6 �
19
da4a6 �
16 .
�
da4 a6
16
da 6 a 7,5
� .2z . .
; �
�
�
'
da7,5a9
; .25
,da6a9
22 .
�
` �
da6a9 . �
20
da9alt' '
-,27
da11a13
:'%'2? '
da3a13
~ 26 '
~
de?a12 '
23
da 13 e 15
31
da 12, a 15
28
da 15 a 17
32
da 13 a J
T
29
da 17 a 19
, 33
.
�
-
da 15 a 20
32
da 19a22
,34
da 17a21
31
�
da 22 a 25 '
- 35 -
da 21 a 25
33
da 20 a 25 :
-37.
da 25 a 30
36
da 25 a 30
34
da 25 a 30
.
.40
da 30 a 35
38 -
da 30 a 35
40
. da 30 a 40'
' t2 �
da 35 a 40
,..40
da 35 a 40
41
� '
'da 40 e 50
42
da 40 a 50
43
: da 40 a 60
.
45
da 50 a 60
44
da 50 a 60
44
.
�
da 60 a 80 '
46
da 60 a 80
46
, da 60 a 80 �
47
da 80 n1(l0
AB
da 80 a 100
48
da 80 a 100
49
da 100 a 125
50
da J 00 a 125
50 �
: da 100 a 125
.
51
da 125 a 150
52
da 125 a 150
52
''da 125 a 150
52
da 750 a 175
54 ,
da 150 a 175
54
da 150 a 175 �
54
da 175 a 200
56
da 175 a 200
56
' da 175 a 200
56
da 200 a 250
58
da 200 a 250
58
da 200 a 250
58
da 250 a 300
� 60
da 250 a 300
60
da 250 a 300
60
da'300 a 350
62
da 300 e 350
62
da 300 a 350
62
da 350 a 400
64
da 350 a 400
64
da 350 a 400
64
da 400 a 450
66 ,
da 400 a 450
. 66
da 400 a 450
66
de 450 a 500
68 .
da 450 a 500
68
da 450 a 500
68
da 500 a 550
70
da 500 a 550
' 70
da 500 a 550
70
dtre550
72
olhe 550�
72
o4re 5$0
72
42
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
KEY :
(1) Table 1 "Manipulating the
Progressions"
(2) Progressions of Income and
Gross Rates
(3) Current system
(4) Reviglio proposal
(5) PCI proposal
(6) Progressions (in millions of
lire)
(7) Rates (in percentages)
How will the new curve work? "In a less irrational manner than in the past,"
Viaco replies. "The progression has been attenuated to 50 mil2ion of income. As
a result, not only will less taxes be paid but also the effects of the fiscal
drag will ba reduced in perspective." in practice, taxpayere with an income of
less thaiz 50 mi.llion will have a double advantage: they will obtain fairly
consistent tax relief (it ranges from 75,000 lire for an income of 10 million to
385,000 lire for an income of 23.5 million) and in the future will be less exposed
to the risk of having a higher rate sprung upon them with variations in their
monetary income. However, for taxpayers with an income greater than 50 mi17.ion
lire, there will be neither advantages nor disadvantages (see Chart A and Table 2j.
Reviglio's Curve
KEY:
38
1
29
Z7
zs
22
19
18
1
Nuova curva
13
10
-
34567,5 11 13151719 22 28 30 35 40 50 60 80 100
(1) Rr3tes (in percentages)
(2) Present curve
(3) New curve according to Reviglio
(4) Progressions (in millions of lire)
43
FOR OFFICIAL USE ONLY
~
~
~
W
F~
O
~
d
Curva attuale 2

secondo Revigli ~ 3}
.
I
.
T~4)
SCAGLIONI (in milioni di Ii~e1
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
PCI 's Curve
KEY:
38
~
27
25
22
19
0010
13
10
F
T
(4)
SCA6LIONI (inmilionidi Irco)
34587,5 9 11 13 15 17 19 22 26 30 35 4~ SO 60 80 100
(1) Rates (in percentages) (3) New curve according to PCI
(2) Present curve (4) Progressions (in millions of lire)
To arrive at these reaulta, Reviglio changed the progressions of income up to 25
million and reduced the rates which apply between one progression and another
(aee Table 1). For examgle, one who earns 7 million and sees his wages increase
through cost-of-living increases to 8 mi.llion is currently taxed on the additional
million at a 26 percent rate; but w1.th the new system he will pay at a 22 percent
rate. One who earna 15 million and goes to 16 million now pays a 32 percent tax
on the additional million; with the new system he wili pay 29 percent.
The tax relief to be gained from a revision in the curve will be higher for families
with only one breadwinner. Ever since cumulative earnings were considered
unconstitutional, the one-income family has been paying more taxes than a familq
with two incomes and has been more exposed to the effects of the fiscal drag. This
is clearly shown in the following exa~le involving two families: in one family
only the husband works and earns 15 million annually; in the othes both husband and
wife work and earn 10 million and 5 million respectively. Both families have the
eame income, but, due to the progresaion of the persona.l income tax, the one-income
family pays 894,000 lire more taxes than the other. To eliminate Lhese dis-
criminations (which particularly affect the families of the South where there are
- fewer job opportunities), Revigl3o maintains Chat it is not enough to correct the
curve. More is needed. And while Italy is weiting to arrive at a system similar
to the German system of splitCing (which in all cases provides for dividing the
family income in half and taxing each half separately), Revi.glio calls for a
greater deduction for the dependent wife. This operation, whose details the
finance minister wants to work out with the uniona, will have to take into
consideration: the greater amounts the one-income famtlq pays to Che state
treasury and the gre~ter expenditure incurred by the family in which both wife
44
FOR QFFICIAL USE ONLY
~
.
�
c
~
~s
.fi
W
0
~
0
,

-

a
Curva ~ttuale 2
N
uove curve
s~canrlo il Pci ~3)
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
and husband uro rk. In this connection, Reviglio is not thinking about a deduction
in a fixed amDunt but rather a series of deductions commensurate with incotne.
For example, 50,000 lire up to 8 million of income, 75,000 up to 10 million, 100,000
up to 15 million and so on. At the same time Reviglio plans to raise the minimum
income limit to that where the wife is considered a dependent. At present, that
limit is 960,000 lire; in 1981 it is to increase to 1,350,000.
PCI Proposal
The communist proposal also calls for a new rate curve. Designed by Napoleone
Colxjanni, one of the PCI's economic brains, the new curve takes fiscal pressure
off incomes up to 30 mi113on and provides for tightening up the rates on incomes
from 32 million up. In terms of immediate advantages Colajanni'.s curve is more
generous than that of Reviglio for medium to low-income taxpayers. For example,
a worker with a little more than 8 million lire of taxable income will paq 127,000
lire less taxes; a taxpayer with an income of 14 million will pay the treasury
345,000 less taxes; a taxpayez who earns 20.5 million will save 400,000 lire of
taxes (see Chart 8 and Table 2). "However," Vieco objects, "we are dealing
with advantages which in perspectl.ve could be less consistent than the figures
indicate. In fact, the curve proposed by the PCI does not reduce the rate
progression in an acceptable manner and, therefore, offers the taxpayer less
protection from future fiscal drag.'�
Tab.2Chi ti guadagnq (1):
Ouanb si paga in meno o in p!u dr tesse
z\ dopo la revisione delle eliquole (lMoosfa e1 lordo de/le detrazioni) �
Uvslll df
PropeNo �
Progeito PCI
nddllo (In
RevlyIlo (In,
, (Irt mlpllsla
di Il
millonl di
nffll~ls dt
9
n)
.
Ilro)
(
Iln)
4
2 '
. 0
0
3,5
- 15
- 15
4,5
� - 20
30
' 5,5 �
' - 15
- 45
6,75
- 20
- 75
8.25
- 42
, - 127
10 . �
- 75
- 205
12
. -115.
- 305
14'
-165
- 345
16 ` �
' --215
- 375
18
--265
- 385
20,5
� :-330
--'400
23,5
--~85 .
' 325 .
27.5
--~-340
- 195'.
32
5
~-21 5 -
~ � + ' S
,
37;5
'
~ � =140
+ 155
.
45. �
- 65
' 355
100
- 15.
1005.
KEY:
(1) Table 2--Who Will Gain
(2) How vruch less or more taxes are paid after revision of rates (tax before
_ deductions)
(3) Income (mtllions of lire)
(4) Reviglio proposal (in thousands of lire)
(5) PCI proposal (in thousands of lire)
45
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
- The Colanjanni proposal, which would coat the treasury about 2.4 trillion lire,
does not contain measures of advantage to the one-income family.
Union Proposal
The union proposals also call for a correction of the rate curve. However, unlike
the Reviglio and PCI proposals, the union proposal is centered around the
protection of the incomes of workers and clerical employeea. "We are not competing
with the finance minister in designing the most besutiful curve," says Marina
Ricciardelli of the tax department of CISL [Italian Confederatfon of Labor Unions].
"Ours is a discussion of policy," adds Alfredo Forgione, tax expert of CGIL
[Italian General Confederation of Labor], and since the present curve particularly
penalizes the wro rkers burdening them almost entirely with the fiscal drag, it is
logical for the union to consider it a priority measure to revise the rate structure
up to a certain level of income." 'in Essence, the unions pr-ipose to reduce the
number of progressions and lower the rates up to 13 to 15 million lire of income
(see Table 3). The reat of the curve can remain unchanged up to 30 million and
become even more progressive from 30 million up, if it is desired to recover what
may have been lost.
Tab 3 L'aliquota sindacale
Scaglioni di ieddilo e eliquole loide
secondo il piogetfo dei sindacati ( 2).
da 0 a..4 milioni
'
� 1096
da
4 a 7 milioni
� 1596
da 7 a 10 milioni
2196
~
da 10 a 13 milioni
� 27q6
da 13 milioni fino
(3) confef ma delle
a 30 milioni �
attu3fi aliquote '
4)
c1a 30 milioni in su
(
aumento delle
� . afluah aliquo.te
KEY :
(1) Table 3--Union Rates
(2) Income progression and gm ss rates according to union proposal
(3) From 13 to 30 million, current rates to be used
(4) From 30 million up, current rates to be increased
Naturally, for the unions there are also groblems in recovering what the fiscal
drag will take in addition from the pay envelopes during 1980. And on this score
they do not fully see eye to eye with Reviglio. "In quantitative terms the
minisCer's proposals," obseives Silvano Miniati of the tax department of UIL
[Italian Union of Labor], "are appreciable but not sufficient. We are counting
on recovering at least two-thirds of the fiscal drag, that is, somewhat nmre than
the 1.6 tri111on lirp which Reviglio believes he can spend." Among other things,
the unions contend that the family al]_owances can be included in the debit and
credit account, as Reviglio is doing.
Even on fiscal protection of the one-income family the union positions are far
from coinciding with those of Reviglio. Precisely contrary to the system of
deductions proposed by Reviglio, the uniona are asking for a reduction in-
46
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
the taxable income of the one-income family. "If, as the union maintaine, we
should in the future arrive at splitting," Ricciardelli asserts, "deductions
could take us farther away instead of closer to our objectives" However, it is
a different case if we head toward some form of lowering the taxable income.
"If we reduce the taxable income by a certain percentage and then begin to shorten
the distance between the tax burden of a family which has only one income and
thaC of a family with two or more sources of income, it will be easier in the
future to divide the income between husband and wife and taz it separately."
These are the three proposals with their pros and cona. However, after the failure
of the economic decree which, among other things, will involve an.appreciable loss
of income by the treasury, there is a danger that we might see a fourth proposal,
that of sidetracking everything until we harre more favorable conditions, a
proposal which may now have more valid arguments than exiated a few weeks ago during
the meetings of the Council of Ministers.
COPYRIGHT: IL MONDO 1980
8568
CSO: 3104
47
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300064413-8
- FOR OFFICIAL USE ONLY
COUNTRY SECTION
BANK OF ITALY MAY-JUNE 1980 STATISTICS
Milan IL SOLE-24 ORE in Italian 23 Oct 80 p 7
[Article by Livio Magnani]
ITALY
[Text] Last June, as never before, net receipts of the credit system (bank
depoaits, special institution debentures and the like) showed a substantial increase
over thoae of June 1979 (2.922 trillion) but were less than current receipts and
considerably m4re than investments by companies and special credit inatitutions,
- including the underwritinga of organizations and enterprises (3.905 trillion
compared with 1.85 trillion). The decrease in receipts was such that its traditional
surplus with respect to investments was limited in June to 269 billion lire
_ compared to 1.072 trillion the year before and 2.761 trillion in June 1978.
The variations which occurred in June appear in part to be a correction of the
- May results which had shown an appreciable decrease both in deposits and invest-
menta by banks. Thus, looking at the bimonthly period, May and June, we note a
subatantial decrease in net receipts over those of the preceding year (3.033
tri111on compared to 6.236 trillion), which indicates that the June recovery was
not sufficient to compensate for the decrease of the previous month. With regard
to investments, theq increased during r11at bimouthly period by 2.795 Crillion
lire compared to 3.070 trillion in May and June 1979; this means that the June
recovery somewhat made up for the slow-down in May, which probably intervened to
limit deviations from the maximum installments which were bimontiil.y at the time and
_ were due in odd months. However, even on a bimanthly basis (this confirms the
rather close correlation between deposits and investments by credit firms), net
receipts showed a surplus over the rather modest innestments (237 billion against
a good 3.166 trillion in May and June 1979 and a good 5.64 trillion in the same
bimonthly period 2 years before)..
= EVOLUTION OF MONETARY CIRCULATION
May and June June
(Billions of lire) 1979 1980 1979 1980
Budget adminiatration
Total receipts -8,289.4 -16,009.4 -4,059.7 -9,921.0
- Partially cash payments2 12,751.3 18,054.8 5,884.9 10,219.4
A) Balance (net indebtedness =+)2 4,461.9 2,045.4 1,825.2 298.4
48
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2047102108: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
Credit system financed ops.
-3,830.5
2,867.6
-1,335.4
2,011.3
Market financed operations
-1,429.0
-18.1
-832.5
575.2
Net BI [Bank of Ita1.q] and UIC
[Italian Credit Union] funds
- at Treasurq Department
-797.6
4,894.9
-342.7
2,884.9
~
- Foreign operations
F.O.B. exports
10,241.7
11,302.9
5,227.8
5,706.1
C.I.F. imports
-10,938.9
-13,797.7
-5,222.7
-6,709.1 _
Trade balance
-597.2
-2,494.8
5.1
-1,003.0
= Bzlance--services and travel items
1,531.7
not det.
833.6
not det.
B) Current balance
834.5
not det.
838.7
not det.
Bal.--auton. capital movements
-265 . 7
not det.
-71. 8
not det.
Bal.--delayed payments
-281.4
not det.
-710.4
not det.
"Auton." balance attributed to
-
BI and UIC
287.4
-2,443.0
56.5
-1,348.1
Credit firms and institutions
-
Investments and shares of organizations
and firms2
3,070.3
2,795.1
1,849.8
3,905.0
Net receipts
-6,236.3
-3,032.5
-2,921.8
-4,174.3 -
Balance with market
-3,166.0
-237.4
-1,072.0
-269.3
Net funds at Txessury Dept.
3,830.5
-2,867.6
1,335.4
-2,011.3
Net funds with BI and UIC
664.5
-3,105.0
263.4
-2,280.9
Market and indinidual operations
Nonyield deposits by importers

_ Bal.--other lesser operations
787.1
1,495.8
997.4
1,342.0
Bal.--ops. with o rganizations,
companies and BI itself
l
787.1
1,495.8
997.4
1,342.0
- Banknote and coin circulation
941.4
842.7
974.6
579.9
1. Variations in index of cycl. move.
+2.0%
+0.8X
+2.4%
+1.4%
2. Inclusion of previous debts for:
221.7
7.8
131.1
5.0
Theee results of the credit aystem are obviously corr
elated with
the progr
ess of
_ operations with foreign countriea as well
as with tha
t of the ad
ministration of '
the state budget and autonomous firms. With regard to forefgn o
perations,
June
cloaed with a trade balance deficit of mo
re than 1 trillion lire
, thus bei
ng -
almost identica]. to the situation which p
revailed in
June 1979,
and with a
deficit
in the bal-lnce of payments (after elimina
tion of foreign loans f
rom state
participations and ENEL [National Electri
c Power Agenry] in the
amour_t of
1.348 -
- trillion lire) compared with a gain of 57
billion in
June 1979.
On a bimo
nthly
baeis there was even a deficit of a good
2.443 trillion compared with a ga
in of 287
billion last year. As is known, what was
especinlly
involved was a greate
r =
inerease in imports (26.1 percent in the
bimonthly perciod) than
that regis
tered
in exports (10.4 percent), even considerably lower than the increase in prices, -
which sagnifiea a decrease in the velume
exported.
49
FOR OFFICIAL USE ONLY
,
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8
- FOR OFFICIAL USE ONLY
To the deflationary effect of these resulta with foreign operations we must add a
leaser inflationary effect of the administration of the budget and the Savings
and Loan Fund which, last June, ahowed an increase in net indebtedness of only
998 billion compared with 1.325 trillion the previous year; on the bim4nthly
basis (May and June) there is a net indebtedness of 2.045 trillion lire compared
to 4.472 trillion in the same period of 1979. It is difficult to explain the
reasons for the improvement in the administration due to lack of detailed
information; we know only that, last June, there was an exceptional increase both
in payments and total deposits and that the latter increased more than the former.
- Conaidering bimonthly results, we note that cash payments increased 41.6 percent
_ over May and June 1979, while deposits increased 93.1 percent. The June figures
are very likely somewhere between deposits and paysents, thus swelling the cash
flow in equal measure.
Obviously, these treasury results are attributable to a minor injection of funda
- on the market simultaneously with the deflationary effect of operations abroad.
And it is further obvious that the minor surplus of receipts over investments
chalked up for that purpose by the credit system resulted in a limited availability
of funds by the credit system itself for financing the Treasury Department.
During the period in question, the crediLl system drastically reduced its availability
. of atate securities with the result that, last June, the Treasury Department
ended up paying the credit system more than 2 trillion lire, while it had received
only 1.335 trillion from it during the same month of the previous year. Moreover,
on the bimonthly basis we note treasury disbursements to the credit system in the
amount of 2.868 trillion, while in May and June 1979 the credit system had poured
3.831 trillion into the treasury. Also on the part of the public direct contribution
to the treasury ahows a slowing down, particularly due to the reduction which
occurred in current postal accounts and to a slowing down of deposits and interest-
bearing postal bills in addition (in June) to a strong lack of investment in
securities by the public and of a lesaer purchase of BOT. Thus, it is estimated
that the Treasury Department had reimbursed the public 565 billion lire in June
while, in the bimonthly period, May and June, the Treasury Department had received
18 billion.
The result of all this is that, despite the substantial decrease in the treasury's
net indebtedness, its recourse to the credit institution was enormous. Last June
the ireasury Department requested funds from the Bank of Italy in the amount of.
2.885 trillion (compared with a reduction of 143 billion in its indebtedness the
previous year), while in the bimonthly period, May and June, the Treasury Department
had incurred debts with the Bank of Italy in the amount of 4.897 trillion despite
having reduced ita indebtedness by 18 billion the previous year.
These operations with the Bank of Italy have strongly weakened the deflationary
effect of the balance abroad and also that stemming from a reduction in the net
i.ndebtedneas of the credit system to the issuing institution which showed up
particularly through a decrease in loane from the Bsnk of Italy to credit firms.
If we also consider the massive volume of "nonclassifiable operations" which
usually show up in June (1.342 trillion i3re compared with 998), we see that the
effect of all the preceding has been to apply the brakes on monetary circulation
to the extent that this circulation increased by only 598 billion compared with
- 975 billion in June 1979 and, on the bimonthly basis, tiy 843 compared with 841.
50
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-00850R040340060013-8
FOR OFFICIAL USE ONLY
More than absolute figu:es the real significance lies in the variations in the
index of movewent (the Juiy 1961 to June 1969 trend/100); this shows a 0.8 percent
' increase for May and June compared with a 2 perc ent increase for the same bimonthly
period of 1979. -
COPYRIGHT; 1980 Editrice I1 Sole-24 Ore s.r.l.
8568
CSO: 3104
' 51
FOR UFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
COUNTRY SECTION
5TOCKPILING DEBATE ACCENTUATES SPLITS IN SOCIALIST PARTY
Stockholm VECKANS AFFARER in Swedish 6 Nov 80 pp 56, 57
NORWAY
[Article by Ragnar Kvam jr: "Party Split Threatens Nordli's Government"]
[Text] Norwegian Prime Minister Odvar Nordl.i's atruggle for
continued government power can be described as a political
poker game ott the highest 1eve1. The debate over advance
storage of heavy NATO weapons on Norwegian soil has urveiled
the split in the Labor Party and LO [the Trade Union Confeder-
ation] before a epiteful audience: the bourgeois opposition,
which senses victory in next year's Storting election. Open
oppoaition, defections irom government, and disruptive conflict
in the top lea,dership of rhe party threaten to undermine Nordli's _
- position as the foremost leader of the Norwegian social
- democratic par.ty.
Oslo. "One should hear it from his own," is an old and reliable Norwegian saying. -
- Prime Min iste: Odvar Nordli certainly agrees, but bitterly. He probably heard it ,
last autumn, when he was forced to struggle with the left wing of the Labor Party
and large sections of L0. Odvar Nordli must seek support from the bourgeois oppo-
sition in order to carry out his policies.
A visible result of that is that Odvar Nordli presented a national budget which
- only the Conservative Party has found to be somewhat satisfactory. Another is that
the prime minister has opposed his own parCy in the widespread national secuxity
debate which is now shaking Norway.
- In the midst of all that the prime minister was forced to hurry home irom a visit
to China(!) to hold his own government intact since three central cabinet ministers
, surprisingly resigned "for private reasons." One of the three was the party's--
_ and the country's--perhaps strongest politician during the entire 1970's: the
independent Minister of Oil and Energy Bjartmar Gjerde.
~ Events o� the autumn have openly weakened the governing Labor Party in advance of
next year's Storting election. According to the latest opinion polls an election
today would have been catastrophic for the party--it would have been replaced by a -
bourgeois coalition, probably under the Conservative Party leader Kare Willoch.
As everywhere else in the western world, the debate in Norway mainly involves eco-
nomic pol icies. But the governing Labor Party is hauntsd furthermore by the strong
52
.1
FOR OFFICIAL USE ONLY
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE C'1!iLY
opposition which atomic weapons in Europe and advance storage of heavy American
military equipment in central Norvaay have caused. Add to this the drawn out and
damaging environmental conflict about the development of the A].ta River, escalated
by the cortege of Norwegian civil defenae vehicles via Sweden and Finland.
Before Open Curtains
This drama, painful for the Labor Party, is being performed before open curtains
and observed by a spiteful audience. The bourgeois opposition is not now campaign-
ing for election. The voters forget these obvious conflicts between the government
~ and the opnosition on questions of oil and industrial policies.
Tne guvernment's new budget, presented last month, totals over 86 billion kroner.
But despite the fact that the gross value of Norway's oil exports next year will
exceed 43 billion kroner (of which 26 billion wilY remain in the treasury), the
budget is underbalanced by 3 billion kroner. To Swedish eyes that looks purely
idyllic--but then one must remember that everything that Norway earns from its oil,
and a bit more, is used to cover the deficit for so-called "Continental Norway."
This part of the Norwegian economy, built on traditional industry, is not a bit
more profftable than the Swedish. Without income from gas and oil production the
Norwegian national budget would have a deficit of about 34 billion kroner.
The budget reminds one of the internal conflicts: the government has LO against it.
They oppose that which ia bourgeois policy in 3weden: alleviation of the income tax
burden and weakening of progressive taxation--at the same time almost a billion
kroner in subsidies of the staple foods is being lost. Several different LO groups
have therefore atrongly criticized their own government.
Liberal Tax Policies
To a still higher degree than previously the national budget is marked by the
reverse side of the oil wealth. Inflation will be higher next year. The goveriunent
estimates 11 - 12 pPrcent, but economists frequently speal: of 20 percent. Since
the previous strict price and wage controls have been lifted, the government expects
inflation during the next 2 years to total at least 25 percent. The bourgeois op-
position's benevolence toward the national budget is aade possible by more liber.al
- social democratic tax policies and the promise of relaxation of the long-lasting
price regulation.
It is still not clear whether Nordli will be able to push his budget through the
Storting. Above all LO's negative reaction has created doubt within the Labor
Party's own Storting group--with a risk of open confrontation on the Storting
floor. One consolation for the government can be that the opposition hesitates to
use the inner splits it the government party to avoid tying themselves down in case
they--as the election polls now seem to predict--should win next year's election.
I
A The security debate constitutes the largest pol:Ltical strain for the government and
_e the Labor Party. If not before, it became obvious when the former minister of
maritime law, Jens Evensen, now ambassador and chief negotiator in Norway's mari-
time boundary negotiations with the USSR, sensationally stated publicly in favor of
a nuclear-weapon-free zone in the north, and openly questioned advance storage of
- 53
FOR OFFICIAL USE QNLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
_ NATO weapons, at least for now. On top of everything else Evensen made his attention-
getting political statement at the same time as Foreign Minister Knut Frydenlund and
King Olav were visiting Finland and President Urho Kekkonen, who is pushing hard for
a nuclear-weapon-free zone in the north. The result was that Rnut Frydenlund was
forced to gtate that his former government colleague forfeited the foreign mini.ster's
. conficlence, while the speaker of the Storting, Guttorm Hansen, advised Evensen to
leave the partyl But to deprive the ambassador of hia important post was not a po-
litical possibility--it would have been too serious a challenge to the party's left
wing.
Political Poker Game
Prime Minister Odvar Nordli thereby reaps what he has sowed in a risky political
game with the question of advance storage and the national security debate. When
it leaked out in August that the government was negotiating with the Americans
about placing heavy military weapons on Norwegian soil, Nordli optimistically
expected to get endorsement by the party to continue negotiations without inter-
ruption. The prime minister was then forced to promise that the question would be
- debated openly until it was approved at the highest level. But he added that it
would damage Norway's reliability as a NATO member if advance storage were not
_ approved--something that the party's left wing saw as a provocative cabinet ques-
tion.
Odvar Nordli's political future stood in the balance when the Oslo branch of the
_ Labor Party, the party's largest, expressed skepticism about the entire question of
advance storage. But by changing advance storage to a question of party loyalty,
Odvar Nordli frightened the Oslo branch ataay from an irreversible vote--he there-
by aucceeded in winning the first pot in that political poker game at the highest
level.
During the general political debate in the Storting recently the bourgeois opposi-
tion went on a hard attack against the government and demanded assurance that
Norwegian national security policies are sound. The prime minister responded that
they are, but added that the government had still in principle decided to approve
advance storage.
In spite of the fragility of the security policies and in spite of the growth of a
strong all-party popular movement for a new defense policy--pop-.,lar movements are
an anathema for the. Norwegian Labor Party, which split and lost government power
after the popular "no" to EG 1972--the government is probably go:ing to do as it
pleases. The Storting majority is in any case still sufficient.
~ Political Compromise
- But from a little lcnger view the Labor Party government is taking a risk with
weariness after seven years of minority government--and several votes of no
confidence--by trying to claim its due. A destructive personality conflict with-
- in the party leadership has already eroded the governing party's power.
The division in 1975 of the party's highest posts, with Odvar Nordli as prime
- minister but Rei.ulf Steen as party chairman, was a political compromiae which to
_ a lesser degree atrains the truth. Wf.th the "Friday massacre" of last autumn--
half the goverrunent was moved out at that time--Reiulf $teen was forced to enter
[he government as minister of conmmerce and shipping. He thereby actually lost his
54
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
FOR OFFICIAL USE ONLY
power as party chairman. Odvar Nordli has
minister for the next election--and Reiulf
the party just now says that Reiulf Stepn
already made claim to reelection as prime
Steen as party chairman. Sentiment in
is going to be sacrificed.
But Biartmar Gjerdes' sudden defection frrnn the government shows how politically
vulnereble Odvar Nordli is. Even i.f Gjerde fails to be the choice to take over
next year as director general of the Swedish Broadcasting Corporation, the debate
has speculated that he is planning a comeback as both party chairman and candidate
for prime minister. And if Nordli is not successful in quelling the concern over
the leadership question in time, his own position can be undermined. In such a
vacuum even former Minister of Environmental Affairs Gro Harlem Brundtland--
vice chairman of the party and leading Storting representative--can be raised in
party opinion.
The political situation in Norway is roughly comparable to that in Sweden--but with
a few changes:
In Norway a social democratic party is governing, but it risks losing governing
power because of interior splitting. In Sweden the social democrats are in the
opposition, but the party has the possibility of taking over if the bourgeois
government coalition flies apart from inner disagreement.
Norwegian politics are now showing a picture of a system which is being hollowed
out from within. It may thereby show next year that ita perhaps most uncontested
statement during the election campaign of 1977 did not hold true. It was, "T'he
political bloc which wins this election can remain in office throughout the 1990's
because it wtll be that government which has the pleasure of administering the
first Norwegian oil billion..." But today all these oil billions do not look like
any bleseing for the Labor Party--even if it still succeeds in fulfilling its
perhaps most important campaign promise: to maintain nearly full employment.
COPYR-GHT: Ahlen & Akerlunds tryckerier, Stockholm, 1980
9287
CSO: 3109
55
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
COUIJTRY SECTION
BIOGRAPHIC DETAILS ON GRAPO TFRRORIST LEADER ISABEL LI,AQUET
Madrid CAMBIO 16 1n Spanish 26 Oct 80 pp 39, 41
SPAIN
[Text] Last 2 September, at 0830 hours, two men openly intercepted a car on Carlos
III Street in Barcelona and killed Intendancy General Errique Briz Artnengol in cold
blood.
An hour later, a woman i.n her thirties in a striped blouse and jeans lsft through
ons of the gates ad jacent to the scene of the murder, crossed the police cordon and
left the area at a rapid pace.
Once out of the police's grasp, the woman got into a phcne booth and dialed from
_ memory a Barcelona number.
"You're crazy; " she cried to the pexson on the other end of the line. "How could
you launch an attack right outside my oxn house?"
Thirty-five days later, last 7 October, Isabel Llaquet, one of the most sought after
women terrorists in the country, along with Dolores Gonzalez (htaxain "Yoyes, " of
the Basque Fatherland and Liberty Group-m (ETA-m), xho had grone right undar the
Barcelona police's noses xithout being recognized, was trapped in a fl.at on Carlos
III Street, whese General Briz Armengol fell.
At the moment of the arrest, Isa.bel Llaquet, 32, a native of Huesca and daughter of
an Arn~y captain (xho has been dead.for years), as well as secretary general of the
Spanish Oommunist Party-r (PCE-r), was xriting an article for GACETA ROJA, the propaganda
mouthpiece of her panty and of its armed lranch, the Firet of October Armed Revolution-
ary Group ( GRA.PO ~ .
, 'I'he article was to be printed 4 days later in Madrid, where the PCE-r had
built the
entire infrastructure of ita propaganda apparatus. An informer who "sang" to the
Madrid police ha,d enabled them to Yseak up the terrorists' propagand,a committee days
_ earlier, and to arrest 14 people in charge of running the photocoFierso
Following that txail, the agents for the first time since Octobe,r 1977 (xhen they Y
caught the former secretary general of the PCE-r, Manuel Perez Martinez, in Benidorm)
managed to get to the "head honcho" of the terrorist group. When Isabel Ilaquet,
the most mysterious woman of the PCE-r, answered the door to her flat in Barcelona,
- ahe thought she would find the courier xho was to take her article to Madxid. Instead,
several xeapons met her at the door.
56
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R000300060013-8
The stone-faced policemen xho aimed their xeapons at her xere on the alert to antic-
ipate any suspicious mave the woman made in case she tried to draw a gun.
Isabel I,laquet was unarmed. Although the police considered her "a xoman of action, _
slyer +.han a fox and snea3cier than a snake," the secretary general of the PCE-r
I
kGk00) had taken no precaution before opening the door.
An hour later, the most clandestine woman in GRAPO (Spanish police were after her for
3 long yeaxs) was cooling her heels in jai1. Thus end.ed her terrorist activities,
tha product of a life devoted to GRAPO.
- ?ier ljfe as a terrorist had begun 10 years earlier. In 1970, Isabel Llaquet moved
- to Madrid, registered as a first-year student in Political Scionce, and began to
be ac�tive in the Democratic Organization of Antifasci$t Students (ODEA), the student
wing of the PCE-r.
In 1973 rsabel Llaquet attended the first congress. of the arganization of Marxist-
Leninists of Spain (OMI,E) in Los Angeles de San Rafeel in the grovince of Segovia.
The follawing year she traded in her books for xeapons and xent to live in Brussels,
where the PCE-r leadership moved for security reasons.
By then Isabel Llaquet was married to Ma.nuel Perez Martinez, 36, a plasterer f`rom
Melilla xho Ras secretary general of the PCE-r. The couple still had no money to
live on, and Parez Martinez had -to work in construction while Isabel Llaquet earned
a living taking care of children at a day-care center.
In 1975 the couple returned to Spain and attended the first congress of the PCE-r,
held in La Cabada (Santander), xnere GRAPO was founded.
_ Two years later, in June 1977, the PCE-r-GRAPO held its second congress in Javea
(Alicante). Manuel PArez Martinez and Isabel Llaquet defended the theory af the
asmed struggle, which triumphed once again. Four� months later, the GRAPO leaders
were captured by police in a Benidorm apartment.
Mariuel Perez Martinez, the highes+,-ranking official of the PCE-r, and 15 other ter-
rorists were sent to ,jail. "GRAPO has been sma.shed," reported the police then. "Al].
- the leaders are imprisoned. "
_ The police were wrong. With the first amnesty, Isabel Llaquet was released. The PCE-r
immediately namsd her secretary general of the organiza.tion, and as soon as she got
out of ,jail she bought an airline ticket to France. There she would dedicate body and
- soul to the reconstruction of GRAPO.
H`rom June 1978 to July 1979 she lived in Paris with other party activists, including
Antonio Martinez Eizaguirre, Aurelio Martinez Caro and Anton{.o Pedrero Donoso.
F'rom the French capital, Isabel Llaquet called Juan Carlos Delgado de Codex and Jose
Maria Sanchez Casas, putting them in charge of the GRAPO commandos. Ilurirjg the Sa.nchez
Ca.sas era, they plagued the country xith terrorist activities.
Isabel Llaqueto as the party's highest politica.l authority, did not discourage these
activities. Delgado de Codex xas ki].led by police in mid-March 1979 in a Madrid plaza,
57
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300060013-8
and Jose Maxia Sanchez Casas was captured with the last GRAPO commando on 12 October
of that year.
"NoH GRAPO has really been wiped out," gloated the police. "After the capture of
Sanchez Casa.s, it cannot possibly raise its head again."
Wrong aga.in. Isabel Llaquet, the most cunning terrorist of recent years, was still
on the loose. And she would go to Work again for the purpose of rebuilding her
husband's terrorist group.
The negligence of some Ministry of Justice officials, who were unable to keep dis-
_ cipline ir, the Zamora jail where the most dangerous GRAPO members were being held,
was to faciiitate matters a great deal. In mid-December 1979, Abelardo Collazo
Araujo, Fernando Hierro Chomon, Francisco Brotons Beneyto, Juan Martin Luna and
Enrique Cerda.n Calixto escaped from prison. I,ast January they ha.d their f9rst ren-
dezvous With Isabel Llaquet, xho entrusted them xith the mission of resuscitating
the terrorist group.
5!:: months latery last 29 July, GRAPO bared its teeth once again. General Arturo
Criado, of Military Health, was the victim of an abortive assassination attempt in
Madrid. The terrorists had revived, and xere up to their old txicks.
Amin's Weapons
The police realized then that the terrorists' wings must be clipped before they flew
too hlgh. Fernando Hierro Chomon was arrested in Vigo. Abelaxdo Collazo Araujo died
in Madrid in a confrontation with police, and Francisco Brotons Beneyto, the military
- "tZraina" of the organization, perished at the end of last September when he was pre- -
paxing important terrorist actions ($ee CAMBIO 16, number 462).
They had yet to arrest, however, the woman who might put the terrorists back on a war
footing. They still hadn't detained the only person with interna.tional contacts to
- purchase arms atroad and give the organization a certain internationa.l ba.cking.
Because Isa.bel Ilaquet, during har stay in France in 1978 and 1979, was the onl,y
person capable of achieving a certain international recognition--although minimal--
for +.he oxga.nization.
In Paxis, Llaquet visited the embassies of all the socia.list countries. Benin and
Angola indica.ted a wa.llingness to provide moral support for GRAPO. Congo Brazzaville
went further and invited a group of PCE-r members to visit the country to get a f3xst-
hand view of the "advances" of its socia.list revolution. A coup d'etat in the Congo
grevented the trip at the last minute.
_ Another military coup, on the other hand, meant that GRAPO for the first time in its
history could obtain its own arms. On 30 March 1979, Idi Amin Dada was overthrown
in Uganda, and a Belgian axms tra.fficker suddenly found himself without a buyer for
the 500 SV sutanachine guns of Czech design and Rhodesian manufacture Hhich the little
dictator of Uganda ha.d ordered, having paid half the price in advance.
To recoup the losses, the trafficker put the weapons on the market in small quantities,
- and GRAPO, through Isabel ISaquet, bought 48 submachine guns. The transfer of the arms
from Belgium to France, where GRAPO had made a safe house, was done in sevexal
trips.
58
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R000300060013-8
_ On on~ of the trlps, Antonic Pedrero Donaso was arrested b,y Frenr,h poiice on the
traln from Frussels to Paris. 2'he gendaxmes tound on his person several SV clips
and more than 1,000 Lapu,a bulZets of Finrsish maka.
Pedrero Donoso was obliged to spend a fex months out of the action in a French jaila
Meanwhilef ;omeone squealed to some Spanish secret service, and Martinez Eizaguirre -
and Fernandez Caxo, who had also participated in the arms purcha.se but we:re not ar-
rPat.ed, were shot and killed in Paris months later.
The deaths of Eizaguirre and Caro did not prevent GRAPO ft-om getting a nold of Weapons.
- Three months la,ter, Pedrero Donoso, tha,nd:s to a gasture of solidarity by the French
Governmont taward the young Spa.nish democracy, was relea,sed. The first SV subma.chine
guns reAched Spa.in.
The Par i3 Killings, however, did strike fear in Isabel Llaquet's heart. Fearing her _
oLTn murdar, the PGE-r aecretaxy general returned to Spain in -Tuly 1979, and until
last 7 Gctober no one knew hex whereaboutsi not even the "big cheeses" like Sanchez
Casas, Delga.d_a de Codex or Brotons Beneyto, who under her supervi sion were spread.ing -
daath across t.he la.nd in the last two resurrections of GRAPO. "b'or tha.t reason, with
her ca.ptura and imprisonment, we are all going to feel a littlo safer," police told
caMBIO 16.
Isabel Llaquet, the most m,ysterious woman of (RAPO, and an SV subnachinegun.
COPYRTGHTs 1979 [as published) INFORMACION Y REYISTAS, S.A.
8926
CSO 1 3110 END
59
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300060013-8