WESTERN EUROPE REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A001600010003-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 16, 2016
• Document Release Date: November 29, 2004
• Sequence Number: 3
• Publication Date: September 20, 1978
• Content Type: REPORT

National
pFgFor Release 2004/12/14: CIA-RDP79T00912A00160001
Assessment
Center
14 i~
Western Europe
Review
20 September 1978
Secret
RP WER 78-008
20 September 1978
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WESTERN EUROPE REVIEW
20 September 1978
CONTENTS
UK-Rhodesia: Charges of Sanction-Busting. .
The political fallout from the release of a re-
port on British oil company violations of UN
sanctions against trade with Rhodesia is ex-
pected to be minimal because both the Labor and
Conservative parties were in office when the in-
fractions occurred and African leaders already
suspected that violations were being ignored.
Government Instability in Divided Portugal . . . . . 13
Further government instability seems likely as
the fundamental problem of Portuguese politics--
a deep and apparently unbridgeable gap between
left and right--continues to influence its demo-
cratic development.
Sweden's Nuclear Decision . . . . . . . . . . . . . . 20
The longstanding debate over the future of the
nuclear power industry enters a critical stage
as the government nears its deadline for deci-
sion on starting up two new nuclear power re-
actors.
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UK-Rhodesia: Charges of Sanction-Busting
The political fallout from the release on 19 Sep-
tember of the Bingham report--an inquiry into British
oil company violations of UN sanctions against trade
with Rhodesia--is expected to be minimal because both
the Labor and Conservative Parties were in office when
the infractions occurred. But the rhetoric--especially
from Labor's left wing---is expected to be considerable
and will continue at least through the debate scheduled
for November on continuing adherence to the sanctions.
Although African leaders probably will condemn the vio-
lations, the report should have little effect on Brit-
ish relations with Africa since most leaders already
suspected that London was ignoring the violations.
According to press accounts of the commission's
findings, oil has been reaching Rhodesia via both Mozam-
bique and South Africa ever since sanctions were imposed
in 1966. Elaborate systems of bonding were employed to
obscure sources and destinations. During part of the
time a swap arrangement with the French company Total
was in effect to further hide the involvement of Brit-
ish companies. British Petroleum and Shell consist-
ently asserted that they could not be held responsible
for the activities of their southern African subsidiar-
ies. Company assertions that sanctions were not being
violated went unchallenged by the British Government
until Foreign Secretary Owen commissioned Thomas Bingham
18 months ago to investigate compliance.
Hypocrisy in High Places
Press reports of the commission's findings put into
question the good faith of three successive British gov-
ernments in pursuit of their Rhodesia policy. The gov-
ernment has consistently defended sanctions, and indeed
it has encouraged the prosecution of minor offenders.
Moreover, substantial sums of money were spent to main-
tain a blockade of the Mozambican port of Beira to pre-
vent oil from getting to the Rhodesian pipeline.
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Only a full investigation will show where the big-
gest gap was: whether embarrassing facts were kept from
the directors of British Petroleum, especially from the
two government-appointed directors; whether the govern-
ment directors concealed facts from government ministers;
or whether the ministers knew what was going on but chose
not to act.
Impact on Domestic and Foreign Policy
There may be a bipartisan move to minimize the dam-
age done by the release of the Bingham report. Moderate
members of both parties believe that little can be gained
from the revelations, except to reassure voters that noth-
ing is being covered up. The left wing of the Labor Party
will probably press the hardest for a full investigation.
What effect the scandal will have on the voting to
renew sanctions is hard to predict. The Tories remain
divided on the issue. The Tory right, strong supporters
of the Smith-backed internal settlement, will try to
break any momentum generated by the report for renewing
the sanctions. While not condoning breaking the law,
they may argue that lifting sanctions is the more real-
istic course to follow. The party leadership, however,
supports the view of shadow Foreign Secretary Davies that
the time is not yet ripe for the party to press the issue.
In any case, the party must be unified and must win the
support of the undecided smaller opposition parties to
gain parliamentary approval for lifting sanctions.
It does not appear that this affair will have much
impact on British relations with Rhodesia or the African
Frontline states. The Patriotic Front and the Frontline
Presidents will regard the report as a confirmation of
their long-held suspicions that violations were occurr-
ing. Owen's credibility with the Africans could be en-
hanced if the report generates widespread publicity and
his role as the official who commissioned it becomes
well-known. So far Rhodesia's transitional government
has not reacted publicly to the revelations, largely be-
cause other matters weigh more heavily. Sanctions or no,
Rhodesia has been able to obtain oil, as various countries
abetted by South Africa have demonstrated their willing-
ness to do business with the white-dominated regime.
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Portugal: Distribution of Party Strength
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SPAIN
Socialists
Social Democrats
Communists
? Center Democrats
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Government Instability in Divided Portugal
Portugal's political and institutional crisis--in
some respects the gravest yet faced by the young democ-
racy--has deepened. The independent government of Prime
Minister Nobre da Costa, named only three weeks ago,
failed to obtain legislative support for its program
last Thursday. Intense maneuvering by the political
parties, aggravated by a continuing power struggle be-
tween President Eanes and Socialist leader Soares, will
complicate the search for a successor, and Nobre da
Costa could continue as caretaker for weeks and even
months.
The prospect of Nobre da Costa's joining the pro-
cession of ineffective postrevolutionary governments--
nine since 1974--makes government stability rather than
government policy the burning question in Lisbon these
days. Without stability, questions about policy seem
irrelevant. After the failure of three constitutionally
sanctioned formulations--minority government, a centrist
alliance, and nonparty rule--it is perhaps understandable
that Portuguese disillusionment with democratic institu-
tions is growing.
The problem of instability is not made easier by
the tendency of Portuguese politicians to look at it in
terms of superficial political and institutional fac-
tors--contrasting leadership styles, personal ambitions
and intrigue, the deficiencies of the constitution, and
the ambiguities in the division of power between the
President and the legislature. This approach implies
that the problem can be solved by a few adjustments in
political style and a little tinkering with the politi-
cal machinery.
Fundamental Problems
In fact, Portugal's instability is traceable to
much more fundamental causes that are beyond easy polit-
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ical manipulation. The most significant of these is a
deep and seemingly unbridgeable gap between right and
left.
Despite its leftist thrust, the 1974 revolution left
Portugal almost evenly split between left and right. The
Socialists and Communists moved quickly to fill the vacuum
left by overthrown Salazarist powerbrokers in Lisbon and
the south. After a brief retreat, the Social Democratic
and Center Democratic parties established conservative
strongholds in the center and north of the country. This
distribution reflects historic, geographic, economic, and
cultural factors that deepen and stabilize the left-right
cleavage.
In the north, the Communists and Socialists have
found it almost impossible to buck the conservative in-
fluences of Catholicism and an economic structure based
on medium and small private businesses and a network of
tiny independent farms. Politically, the northerners
experienced a development different from that in the south
even before the 1974 revolution. Consequently, they were
able to play a moderating role during the revolution and
are now spearheading a general resurgence of Portuguese
conservatism under the revealing rubric of "democratic
polarization."
The left is similarly well entrenched, embracing a
heterogeneous array of politicians, intellectuals, junior
officers, and urban and rural workers who were disfran-
chised under Salazar. Arising en masse in the revolution,
they are now flourishing in areas where Salazarist insti-
tutions were not well established or were decaying--the
cities and the south, which have long served as seedbeds
for leftist sentiment.
Numerically, the two sides are almost evenly matched.
The left may hold a slight edge, but the right is gaining
ground. The marginal superiority of either right or left,
however, does not translate into decisive political dom-
inance. Any government based on a leftist or rightist
bloc faces resistance from nearly half the country, and
opposition can be expressed in ways that go far beyond
actual voter turnout. A narrowly victorious conservative
regime would collide head-on with Communist-dominated
labor and agricultural forces that could frustrate im-
plementation of conservative economic and political
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policies. Such a regime would be similarly challenged
by a highly influential Socialist political elite that
comprises the country's only truly national representa-
tion and dominates certain sectors of its largest public
and private enterprises.
Leftists, on the other hand, lack control over crit-
ical northern agriculture and industry as well as the major
portion of the country's managerial class. They are also
strongly resisted by the senior military command--includ-
ing President Eanes--and by the Catholic church, certain
financial sectors, and the small but significant popula-
tions in the Azores and Madeira.
The near parity of left and right, both in terms of
voting strength and stability, predisposes Portugal to
political stalemates. The economy reflects this condi-
tion in its stagnation and decline.
No Centrist Solution
In response to economic exigencies and strong pres-
idential prodding, the Socialists and Center Democrats
formed an uneasy left-right alliance last February. The
hope was that by forging a political compromise at the
center, a stable legislative majority would emerge to
provide steady support for critical economic programs.
For a while it worked. Within five months the able
Socialist Finance Minister Vitor Constancio negotiated
$1.3 billion in short- and medium-term financing for
Portugal's large balance-of-payments deficit and capital
projects. As part of the economic recovery process, he
pushed through an austerity budget and other programs
recommended by the International Monetary Fund.
On the international front, Center Democratic Foreign
Minister Sa Machado arranged for Portugal's entry into
the Common Market and normalized relations with the coun-
try's former African colonies, whose raw materials and
ability to absorb excess Portuguese labor could assist
recovery.
In July, however, the alliance unraveled with aston-
ishing rapidity, the victim of its own deep internal con-
tradictions. Center Democratic leader Freitas Do Amaral
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Portugal: Party Strength in National Assembly
Number of Seats
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Parties
'- Center Democrats
Social Democrats
former Socialists
now voting as independents
Socialists
Communists
Popular Democratic Union
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accepted immediate responsibility for the break, citing
a grass-roots rebellion in his party against "unconscion-
able" leftist stances being taken by ministers supposedly
committed to centrist rule. Loudest among the objecting
voices were the powerful conservative agrarian lobbies
that were bitter about the virtual monopoly over agricul-
tural credit held by some 450 Communist-managed collectives
in the south. Compensation for lands confiscated by
leftists during the revolution, the promotion of social-
ized medicine, and controversial education programs were
also at issue.
The Center Democratic rebellion against the party's
participation in the government was reinforced by church
pronouncements against the "atheistic ideologies that rule
our Christian land" and public criticisms of the govern-
ment's performance from President Eanes, an erstwhile
supporter of Center Democrats' entry into the alliance.
Another decisive factor promoting left-right polar-
ization was the opportunistic competition between the
dominant parties within each bloc. Since there is little,
if any, chance of significant movement of Portuguese voters
between right and left, the most critical shifts in voter
support occur within the left and right voting blocs. Any
party that moves toward the center, and particularly one
that joins an ideologically inharmonious alliance, risks
being outflanked by its like-minded rival. Recent gains
by Social Democrats and Communists at the expense of So-
cialists and Center Democrats in the Mirandela County
election are probably attributable to this phenomenon.
Mirandela County Election Results
(Percentages)
Party
1976
1978*
Social Democrats
30
51
Center Democrats
32
15
Socialists
27
14
Communist
7.5
14
Other Parties
3.5
6
*The shift from left (Socialists, Communists) to right (Social
Democrats, Center Democrats) is accentuated by the rise in the ab-
stention rate from 42 to 59 percent. Voter participation tradi-
tionally is higher among supporters of parties on the right.
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The absence of a significant and visible centrist
constituency that could compensate for the loss of tra-
ditional support, is critical. When Portugal's revolu-
tionary left exploded on the scene in 1974, no political
force emerged to mediate between it and the old opposi-
tion to Salazar. That opposition, while liberal for its
day, was far more conservative than the leftist revolu-
tionaries who won and held supremacy until late 1975.
Because there is little to be gained in electoral terms
from centrist policies, party leaders of either right or
left have little incentive to moderate their political
line.
Intense intrabloc rivalries impinge on government
stability in two major ways. First, they inhibit far-
reaching political compromises that could lead to genuine
centrist government and make all political commitments
extremely tentative. Second, they restrain cooperation
within the blocs and encourage the articulation of defen-
sive and reactive party strategies. Lacking a tradition
of cooperation and compromise, even a more ideologically
unified government would be vulnerable to constant inter-
party disputes.
Other Possibilities and Future Pro sects
President Eanes' ill-fated installation of Nobre da
Costa as an independent prime minister heading a nonparty
government was an emergency effort to achieve stability
by divorcing government actions from the vagaries of
party politics. It was doomed to failure not only because
the parties were not about to surrender their government
prerogatives--though this was the institutional core of
the crisis--but also because the impact of government
policies on party constituencies would have eventually
given rise to general opposition. At best such a govern-
ment would be reduced to the status of a minority regime,
unable to follow a coherent policy because of the need
to seek party support from different quarters on a case-
by-case basis.
Proposals for some form of grand coalition including
all four major parties--or perhaps excluding the Commu-
nists--are a nonstarter. Such an arrangement would enable
the parties to protect their flanks by drawing intrabloc
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rivals into partnership, but in practice it would merely
transfer the forum for party disputes from the legisla-
ture to the cabinet, where constitutional machinery for
settling differences does not exist.
In view of this dilemma, it is not surprising that
Portuguese leaders are increasingly speaking in terms of
reformulating the constitutional basis of political in-
stitutions rather than simply reorganizing the govern-
ment. The most significant proposals involve changes
designed to minimize the destabilizing effects of the
polarized political structure.
Some involve giving the president more executive
powers, on the theory that his electoral majority pre-
sumably cuts across party loyalties. Such an arrange-
ment, however, would increase the parties' stake in pres-
idential elections and could eventually reduce the pres-
ident's independence. Other proposals call for a rede-
sign of the electoral system to produce legislative ma-
jorities. Most parties are leery of such an artificially
concocted majority, however, because it would not repre-
sent the plurality of interests in the country.
Certain-long term trends may help to erode the under-
lying bases of instability. One possibility is that con-
tinued economic decline will eventually raise social frus-
trations to the point where politicians are forced to make
far-reaching compromises in order to unify the country's
productive forces to achieve a solid recovery. But the
political costs associated with a left-right compromise
will remain high and there is growing fear that politi-
cians will let the economic situation get out of hand
before they feel constrained to come to terms.
In the absence of workable short-term solutions,
government instability will probably be a prominent
feature of Portuguese politics for the foreseeable future.
Almost as likely is that the Portuguese will find a way
to live with this instability. At a minimum, however,
they must develop stopgap solutions to their most press-
ing economic problems while controlling popular unrest
and fending off radical proposals.
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Sweden's Nuclear Decision
Sweden's three-party government is locked in heated
debate over the startup of two new nuclear power reactors
in anticipation of a self-imposed 21 September deadline
for a decision. Rumors of the coalition's collapse over
the issue have already reached the wire services. The
startup was postponed earlier this year, ostensibly to
allow time for the government to study a special com-
mission report on waste disposal safety. The real issue
is not technology, however, but differing views within
Prime Minister Falldin's coalition government--which
have threatened the coalition since its formation--on
the safety of and need for nuclear energy.
The opposition Social Democrats, who launched the
extensive nuclear energy program in 1975, have not been
effective in their criticism of the government on the
nuclear energy issue and are not prepared for elections
based on this question. Most observers in Stockholm re-
ject the possibility of early elections, and agree that
if the government folds, a minority government headed by
Liberal Party leader Ullsten would be permitted to fill
the gap until the regularly scheduled elections next fall.
Falldin's Center Party, which had expanded beyond
its traditional agrarian roots to include the emerging
environmentalist movement, promised the eventual dis-
mantling of the nuclear power industry during its suc-
cessful 1976 election campaign. Its coalition partners--
the Moderate and Liberal parties--support nuclear power
production so long as strong safety precautions are taken.
A coalition agreement negotiated at the time the
government was formed provided that plants already oper-
ating or ready to operate would not be affected by gov-
ernment action until after studies were completed on
safety, power needs, and alternate energy sources, but
that those still in the planning stage would be subject
to constraints. Six months after taking office, the
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government won passage of legislation--the Conditions
Act--requiring the nuclear industry to guarantee final
safe storage of all nuclear waste, with or without re-
processing. Plants close to or in operation were given
a period of grace during which they could use designated
temporary storage, but the timetable for starting up new
reactors was delayed.
The power companies owning the two reactors scheduled
to come on line earlier this year have completed reproc-
essing contracts with a French firm that they and nuclear
power supporters believe are in accord with the Conditions
Act. The government has not yet indicated whether it will
accept or reject these contracts, but will announce its
decision this month. Falldin and his supporters believe
there is still a question of safety, but they are faced
with the political impossibility of pressing the issue
without the backing of their coalition partners.
Time required to find alternative energy sources and
changing economic conditions are arguments used by gov-
ernment officials to support flexible decisions on nuclear
power. Research and development on alternative energy
sources received heavy funding for the first time this
year and will need time to bear fruit. The Swedes are
also exploring the use of commercial agreements that
would trade the country's technological resources for
oil. Closing down shipyards and steel mills in a program
to restructure Swedish industry has reduced energy con-
sumption, but has added to the unemployment problem. Some
officials believe closing down nuclear power plants or
nuclear construction projects in the coming months would
be politically unwise because of rising unemployment. At
any rate, most experts agree that the government need
not rush the nuclear program. The projections of energy
needs on which the Social Democrats based their program
of 13 reactors have been revised downward, and the pro-
gram could be reduced or stretched out without causing
power shortages.
In traditional Swedish fashion, hints on the outline
of a compromise have appeared in the press in recent weeks
as the decision deadline approaches. Public statements
by various members of the coalition imply the development
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of a schedule to charge both reactors--possibly with
some delay. The waste would be put in storage facilities
already planned to serve six presently operating plants.
This solution would allow Falldin to tell the environ-
mentalists that he had succeeded in freezing the risk
because overall nuclear operations would be limited by
existing storage space, while the pronuclear members of
the coalition could point to the increased number of
operating reactors. Safe final storage could be studied
further, and questions concerning reprocessing would also
be postponed. Such a solution to the government's nuclear
power dilemma would greatly reduce the value of this issue
to the opposition Social Democrats in the campaign leadin
up to the 1979 parliamentary elections.
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