FINLAND'S ECONOMIC SITUATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R004200090029-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: October 24, 2003
• Sequence Number: 29
• Publication Date: September 26, 1958
• Content Type: MF

5ECRET
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tiispleasure at haphazard planning by Indian officials* He gumedeimmEmmeeme
"B and K" again in June 1957 when they visited Finland, and accompanied
Khrushchev to Budapest in April 1958.
The support given by Serov to Khrushchev during two trials of
strength appear to have made Serovls position secure for the time being,
During the expulsion of the "anti?Party" group of Malenkov, Molotov,
Kaganovich, and Shepilov in July 1957, Serov is reported to have stood
by Khrushchev, supporting him in debate within the Central Committee.
Later, in October, Serov played a leading role in the ouster of Marshal
Zhukov. It is reported that earlier Zhukov had recommended Serovis
removal as chairman of KGB. In view of the friction supposed to have
existed between them as far back as their service in Berlin, the story
that Serov, resenting the curtailment of police controls in the Armed
Forces and Zhukov's increasing prestige, in turn recommended to Khrushchev
that Zhukov be dismissed appears to have some plausability.
During his career, Serov has received the usual honors accorded a
successful Soviet official, In the recent period these have included
promotion to full General (August 1955), thus making him senior police
officer in military rank, a fourth Order of Lenin on his 50th birthday
November 1955), and election as full member of the CPSU Central Committee
at the 20th Party Congress (February 1956), In addition, he has held
many elective offices, including those of deputy to the Supreme Soviets
of the USSR (1946 and 1958) and RSFSR (1955), and the Moscow City Soviet
(1954), In his capacity as legislator, Serov was reported in May 1957
to be participating in work on the draft of a new law entitled "Basic
Legislative Principles of the Judicial System of the USSR."
Clearances: DHS
.TR:EE
IRC:BI:IBelousovitch September 26, 1958
5ECRET
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Approved For Release 2003/11/04: CIA-RD
Secretary of State
lecacemic Situation
1. I an aware that you are thoroughly familiar with the
background of Finland's present economic difficulties, which
have been /114%-lighted by the recent visit to Washington of
the Director of the Beak of Finland to attempt to negotiate
a 00,000,000 loan. The current CIA. eatimate of the serious-
nese of this situation might be of ammiatence to you in deter-
mining the U. S. Ocvernment's polioy with regard to this regoest.
2. Ton, or course, are as familiar as we with the tetanal.-
ation of Soviet econoeic pressure on Finiales which culminated
during President Zekkonsn's recent visit to Macaw in the Soviet
offer of a 500,000,000 rale loan. Aker, element in the Pinn's
increasingly deeperete efforts to preserve their economic stability
is or course their ebility to acepire investment capital from abroad
The at majority at the Finns are naturally very reluctant to
accept large scale desistance from the Soviets, since they realize
that to do so is Utplaoe themeelves Increasingly under the control
of the USSR eeonomically -- end, ultimatelY, Politios1147. The
only apparent alternative is to get this aseietance from the United.
States. In our view, failure to receive economic assiatance at
this moment of crisis in rizaandis post-war econostic affairs,
Illight well be a decisive factor in an unfavorable turn for Fin-
land's future *commie and political aevelopment.
3. I fully Appreciate the severe preblems that have been
created for the Deportment by the recent curtailment of fun&
available for foreign assistance, at the same time that there is
minting cometitioa from all over the world for the remaining
funds available. Nonetheless, it is our view that there are few
cases where the timely arfplicatiaa of ANOXIC= economic assistance
would have more clear-cut prospects of over-all. benefit to a
friendly government, the continued welfare Mia independence of
whiCh is of high interest to and of direct relation to the security
of the United States.
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ILLEGIB
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Approved For Release 20WISfit1CIA-RDP801301676R0042000iat2Seel/4
of State
Finland's Economic Situation
1
Executive 1117;:y
1 1-.1-941754-
1. I am mare that you are thorouggy familier with the
background of Finland's present ecomom4C difficulties, which have
been high-lighted by the recent visit/to Washington of the
Director of the Bank of Finland to ttempt to negotiate a
30,000,000 loan. The current CIkestinate of the seriousness of
this situation might be of assispince to you in determining the
U. S. Government's policy vithitegard to this request.
2. In our view, the fidlure of the U. S. Government to
respond to this Finnish rest, at this moment of crisis in
Finland's post-mar econo,ic affairs slight well be a decisive
factor in an unfavorab14eturn for ?Inland's future economic and
political development./ You, of coarse, are as familiar as we
with the intensifica4on of Ooviet economic pressure on Finland,
which culminated during President Xekkonen's recent visit to
Moscow' in the -Soviit offer of a 500,000,000 rale loan. A key
element in the Finns increasingly desperate efforts to preserve
their economic *ability is of course their ability to acquire
investment capital from abroad. The greet majority of the Finns
are naturallvitery reluctant to accept large scale assistance
from the Soviets, since they realise that to do so is to place
themselves increasingly under the control of the USSR economicall
and, ultimately, politically. The only apparent alternative is
to get this assistance from the United States.
3. I fully appreciate the severe problems that have been
created for the Department by the recent curtailment of funds
available for foreign insistence, at the some time that there is
mounting competition from all over the world for the remaining
funds available. Nonetheless, it is our view that there are few
oases where the timely application of American economic assistance
would have more clear-cut prospects of over-all benefit to a
friendly government, the continued welfare and independence of
which is of high interest to and of direct relation to the security
of the United States.
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4?11.4116
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4. I take the liberty of expressing these th4ts to you
because it appears that an intelligence assessm9nt or the
imNlicatione of the current economic crisis lirrialand will
inevitably form one part of the picture whIth you must view In
arriving at a decision an this natter.
cc: DDCI
Signature Recommended:
Pepeputy Director krians)
C. P. CABELL
General, usAr
Acting Director
Distribution:
Orig. & 1 - Addressee
ADCI
I - DD/P
1 - WE-1
- n7:
f
Date
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