NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A028200010015-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 20, 2016
• Document Release Date: September 5, 2006
• Sequence Number: 15
• Publication Date: October 29, 1975
• Content Type: REPORT

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Minso ~1,
National Intelligence
Bulletin
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State Dept. review completed
DIA review(s) completed.
Top Secret
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National Intelligence Bulletin
October 29, 1975
CONTENTS
PORTUGAL: Government
asserts its authority . . . . . . . . . . . . . . . . . . . .
.
1
LEBANON: Security committee formed
to implement cease-fire . . . . . . . . . . . . . . .
..
3
ETHIOPIA: Crisis developing within
ruling Military Council . . . . . . . . . . . . . . . . . . . .
.
5
SPANISH SAHARA: Further talks . . . . . . . . . . . . . .
.
6
SPAIN: Economic downturn . . . . . . . . . . . . . . . . .
.
8
SPAIN: Franco's condition
still grave . . . . . . . . . . . . . . . . . . . . . . . . .
.
9
NETHERLANDS: Dutch may pressure NATO
on defense specialization issue . . . . . . . . . . . . . . . .
.
10
EC: Effort to achieve
common energy policy . . . . . . . . . . . . . . . . . . .
.
11
EAST GERMANY: Labor trouble . . . . . . . . . . . . . . .
.
12
LAOS-THAI LAND: Vientiane taking
harsh line toward Bangkok . . . . . . . . . . . . . . . . . .
.
13
ARGENTINA: New accord aims at
easing pressures on government, . . . . . . . . . . . . . . . .
.
14
BRAZIL: Multinational participation
in weapons production . . . . . . . . . . . . . . . . . . . .
.
15
ANNEX: Difficult Days
Ahead in Poland
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National Intelligence Bulletin October 29, 1975
PORTUGAL
The Portuguese government has taken further steps to assert its authority in the
wake of Prime Minister Azevedo's successful trip to Porto last weekend.
The first crackdown by the military on Communist-backed seizures of privately
owned farms occurred on Monday north of Lisbon when a cavalry unit arrested ten
farms workers' union squatters. The security forces said the workers would be
prosecuted for the illegal possession of military firearms. An amnesty for turning in
such firearms expired on Saturday. An attempt by outsiders to occupy another farm
in the area eventually was abandoned.
Monday's action by the military is significant in light of the
Communist-inspired seizure of over half a million acres of prime farmland in
southern Portugal since summer. Because much of the expropriated land lies fallow
and large numbers of livestock have been senselessly slaughtered, the take-overs
could confront the government with serious agricultural shortages by next year.
Also on Monday, left-wing demonstrators were ousted from the civil governor's
offices in Faro, in the southern Algarve resort area, after they were occupied to
protest the recent removal of the pro-Communist governor. Soldiers rushed to the
scene after a combined assault on the offices by the Socialists and Popular
Democrats resulted in a brawl in which ten people were injured.
In another incident south of Lisbon, an infantry regiment intervened to prevent
violence when leftist farm workers occupied the local farmers' guild.
The Portuguese army, and particularly Chief of Staff Fabiao, have come in for
harsh criticism because of lax discipline and their failure to ensure public order. An
army spokesman said Monday that 18 percent of the army will be demobilized while
Fabiao is away this week on a visit to West Germany.
On the economic front, the government has announced a series of measures
intended to stop the flight of capital and strengthen the escudo. Foreign exchange
transactions by Portuguese nationals have been severely limited and violators face
prison terms ranging from two to eight years.
Meanwhile, the approaching end this week of the government-sponsored airlift
of Angolan refugees could spell additional problems for Azevedo's government.
Nearly 200,000 returnees will have reached Portugal by October 31. The
increasingly embittered and frustrated refugees have refrained from taking direct
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political action, reportedly for fear of reprisals against friends and relatives still in
Angola. Last weekend, however, a group believed associated with the refugees
claimed responsibility for a bomb attack on the left-wing Angolan cultural center.
The group, which blamed the government refugee agency for the plight of the
returnees, said it has decided to "answer force with force and violence with
violence."
Another refugee group, called the Liberation Front of Portugal, sent a
delegation to the US embassy last week to ask for arms, money, and organizational
support.
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National Intelligence Bulletin
October 29, 1975
The fighting in Beirut's commercial area was heavy throughout the day
yesterday. By late afternoon, however, the Phalangist militia seemed to be on the
defensive and was withdrawing from the luxury hotel district it seized over the
weekend.
The Phalangist move into the district was opposed initially by Lebanese
Nasirists led by Ibrahim Qualayat and by radical Palestinians. By yesterday morning,
it had drawn in units of the major fedayeen groups, Fatah and Saiqa, which
previously had stayed out of the fighting.
The Phalangists could still put up stiff resistance, but there is little doubt that
the Palestinians will ultimately be able to force them out.
Prime Minister Karami yesterday announced formation of a ten-man "security
committee to put into effect a cease-fire that was called last Sunday. He said the
group, which includes the country's major political leaders, would be meeting in his
office until the fighting stops. The committee will probably not succeed. Most
members have been unable to reach the Prime Minister's office because of continued
fighting, and one, Socialist leader Kamal Jumblatt, has said he will not participate.
Jumblatt dismissed the new committee as an outdated attempt at "tribal
reconciliation." He insisted that Lebanon's problems must be solved through
fundamental reforms. Despite this attack and his many other political differences
with Karami, Jumblatt almost certainly prefers that the Prime Minister resist efforts
by right-wing Christians to force his resignation.
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October 29, 1975
A showdown between Karami and Interior Minister Shamun was averted
yesterday when parliament again failed to muster a quorum. In fact, an aide to
Phalangist leader Jumayyil was killed yesterday in the continuing fighting around
the parliament building. His death will lead to Phalangist calls for revenge against the
far left and will reinforce Jumayyil's refusal to make political concessions
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October 29, 1975
A crisis seems to have been developing within Ethiopia's ruling Provisional
Administrative Military Council over the past two weeks.
The council's two leading lights, First Vice Chairman Major Mengistu and
Second Vice Chairman Lt. Col. Atnafu, appear to have lost significant support
within the military because of their continued squabbling as well as general
disenchantment over council policies. Until their pictures appeared on local
television and in the government-controlled newspaper a few days ago, both vice
chairmen had been absent from the public view. The council chairman, Brigadier
General Teferi Benti, and Minister of Defense Alayew have recently begun exercising
more authority.
Military units in the field may play a key role in resolving the crisis. Their
leaders have expressed increased concern about the unrest throughout the country
and over what many see as excessive repression. There have also been complaints
that military council members are not equipped for the tasks of government and
suggestions that civilian officials should have more authority.
We do not know just how much ground has been lost by Mengistu and Atnafu
in the current machinations. In the interest of maintaining a facade of unity, any
major changes which occur may not become apparent for some time.
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Moroccan Foreign Minister Laraki, accompanied this time by his Mauritanian
counterpart, returned to Madrid yesterday for another round of talks on Spanish
Sahara.
The quickening pace of diplomatic contacts and the inclusion of Mauritania,
which is aligned with Morocco on the Spanish Sahara dispute, suggest that
negotiations with Spain are making progress. An understanding may be near that
would partition Spanish Sahara between Morocco and Mauritania and grant Spain
military bases and various economic concessions.
The three countries have reason to settle the Sahara dispute quickly. Morocco
and Mauritania would like a negotiated fait accompli in hopes of heading off a
debate on self-determination for the disputed territory in the UN General Assembly
this fall. Spain would like to settle this contentious issue before Juan Carlos assumes
power, to spare his new government an additional burden and forestall or at least
limit the size of Morocco's planned mass march into Spanish Sahara.
Spanish security officials report that the Spanish military is concerned that if
King Hassan goes through with his planned march of 350,000 people, the situation
will get out of control. Madrid might allow a small number of Moroccans to make a
symbolic entry into Spanish Sahara, but the military has indicated it will not allow
large numbers of marchers to cross the border and continue on to El Aaiun.
The three governments may seek a Security Council resolution endorsing
whatever arrangements they are able to work out. Spain has consistently sought UN
approval for any arrangements for the decolonization of Spanish Sahara. Morocco,
for its part, is beginning to refer to its ongoing contacts with Madrid in the context
of the Security Council resolution of last week that called on all parties to begin a
dialogue.
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weakening Morocco's claim to the territory.
decolonization should be left to the General Assembly. He added that these
measures must be in accord with a recent report by a UN fact-finding group and an
advisory opinion by the International Court of Justice, which had the effect of
October 29, 1975
Algeria, which opposes a turnover of the territory to Morocco and Mauritania,
remains the chief stumbling block to an early resolution of the dispute. According to
an Algiers radiobroadcast, Foreign Minister Bouteflika, who is still at the UN, sent a
message to Secretary General Waldheim last weekend endorsing his consultative
mission to Morocco, Mauritania, Algeria, and Spain, which ended yesterday.
Bouteflika made it clear, however, that Waldheim should confine himself to seeking
a reduction of tensions in the area and that the adoption of appropriate measures for
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National Intelligence Bulletin
October 29, 1975
Juan Carlos will inherit an economy that has experienced a downturn after
many years of robust growth.
The sharp deceleration of the economy, beginning last fall, was precipitated by
a slump in exports. From 1970 to 1974, Spain's economy grew at a 6-percent annual
rate. Because of rapid inflation and a looming payments problem, the government
has proceeded cautiously in efforts to revive activity. As a result, the increase in real
Gross National Product this year probably will be only 2 percent, roughly half that
of 1974.
Industrial production began to falter in the summer of 1974, plunging steeply
after October as export orders shrank. In the first quarter of 1975, seasonally
adjusted output fell at a 23-percent annual rate before reviving in April. Industrial
production has continued to creep up, but remains well below last year's levels.
Industry operated at only about 80 percent of capacity during the first half of
this year. Unemployment worsened as output sagged, rising to 4 percent officially
in late July, compared with less than 2 percent last year. Consumer prices are rising
at a 17.5-percent annual rate-about the same as last year-with wages increasing 20
to 25 percent.
While Madrid has increased spending and lowered the tax on capital gains to
bolster output, it increasingly has focused attention on prices. Anti-inflation
measures introduced this year include:
--a linking of further wage increases to rises in the cost of living,
--a freeze on rents and profit margins, and
--a 10-percent tax surcharge on dividends and profits and a 15-percent tax on
interest earnings from savings deposits.
The foreign sector is a major constraint on stimulative efforts. Imports are
more than double exports, and we expect the trade deficit to rise to more than $9
billion this year from $8.3 billion in 1974.. Continued heavy demand for imported
oil, together with the recent 10-percent OPEC price hike, will push the oil bill to
more than $3.5 billion. Tourist revenues and worker remittances have done well
despite the world recession.
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We estimate that the current account deficit may be held to slightly more than
$3 billion-about the same as last year. Madrid has preferred to borrow abroad to
cover the current account gap, although foreign reserves are adequate at $6.3 billion.
Madrid publicly blames its poor trade performance on what it considers unfair
treatment by the EC and the US. Spanish-EC trade negotiations have been
deadlocked since last year. The EC recently decided not to resume negotiations
because of the execution of terrorists. Madrid also is dissatisfied with the results of
its attempts to gain more favorable trade treatment from the US.
Franco's condition yesterday evening was "extraordinarily grave," according to
a bulletin signed by his medical team. Earlier in the day, his doctors reportedly
admitted that he would not recover, even though his condition at that time had
shown signs of improvement.
The prospect that Franco might linger renewed speculation over whether he
should be declared incapacitated. There is strong sentiment against leaving the
country leaderless for an extended period, but after each relapse, the movement to
have Franco declared incapacitated loses ground. It would be a drawn-out, possibly
controversial, and in any case ignominious end to the Caudillo's rule.
The need for firm leadership was underlined yesterday by the arrest of 20 more
alleged Basque terrorists in the north of Spain and also by the continuing
negotiations over the Spanish Sahara problem.
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National Intelligence Bulletin October 29, 1975
The Hague may use an impending study on defense spending to try to pressure
NATO on the issue of specialization of defense roles.
The purpose of the new study is to determine whether revisions to the 1974
White Paper on defense plans are necessary in view of future budgetary constraints.
Plans for the study were revealed in a letter from Prime Minister Den Uyl to NATO
Secretary General Luns which confirmed that the Netherlands has reconsidered its
plans to retire 13 NATO-committed anti-submarine warfare aircraft and to dispose
of a guided-missile cruiser. The aircraft will remain in service and the ship, though
already decommissioned, will be kept in reserve reportedly until sometime next
year.
Den Uyl pointed out that the Netherlands will not be able to sustain a
creditable NATO commitment unless considerable progress is made soon on Alliance
efforts to streamline European defenses. The Prime Minister and Defense Minister
Vredeling have been strong proponents of specialization of defense roles within the
Alliance. Studies are under way on this subject, but progress has been slow.
Some allied officials believe that the Dutch specialization gambit is aimed at
reducing The Hague's defense costs. The Dutch, on the other hand, claim their
primary purpose is the more efficient use of expenditures at present levels, especially
by the smaller allies who find it increasingly difficult to arm a full range of forces
with increasingly costly, sophisticated weapons.
Specialization is scheduled to be discussed by NATO defense ministers at the
Defense Planning Committee session on December 9 and 10. Meanwhile, Vredeling
will continue to advocate speedy NATO action in this field. He will likely contend
that cuts are inevitable unless he can report progress on the specialization issue to
the Dutch Parliament.
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National Intelligence Bulletin
October 29, 1975
Commission Vice President Simonet is making a major last-ditch effort to
achieve a common EC energy policy. His proposals contain something for each of
the Nine-including the independently minded British-and could provide a new
impetus for bargaining in this long-stalled area.
Simonet is holding his plan closely, but apparently would ask the member
states to agree:
--To speak with one voice on energy matters internationally. The UK would
have to give up its demand for a separate seat at the Conference of
International Economic Cooperation (CIEC) in December. France would not
have to join the International Energy Agency, but would have to stop impeding
its work.
--To act together in a supply crisis. France has considered such a commitment
provocative to the oil producers, and the UK has feared it would involve
sharing control of North Sea oil.
--To guarantee the profitability of investment by community producers.
Designed as a major inducement to the UK, this is the key to the Simonet
program.
--To share information about oil supplies, nuclear power, and other energy
matters.
Another possible element in the program would be a scheme for countries such
as West Germany, France, and Italy to provide capital to speed up production
particularly, but not exclusively, in the North Sea.
The Commission is to discuss Simonet's proposal today, and could approve a
version of it within a few days. Simonet may then decide to submit it to the EC
heads of government meeting in Rome on December 1 and 2.
A political decision by EC member states on whether to seek a common policy
hinges primarily on the Wilson government. Foreign Minister Callaghan has insisted
that London should have its own seat rather than accept EC representation at the
CIEC. He has been keeping his own subordinates in the Foreign Office guessing
whether his attitude is merely a negotiating tactic. Discussion of Simonet's proposal
in Rome might elucidate the British position.
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October 29, 1975
New momentum toward a common EC energy policy could conflict with the
CIEC in Paris in December. Rebuff of the Simonet initiative, on the other hand, is
likely to bring EC efforts to find a common energy policy to an end for some time
to come.
The East German leadership is still concerned over labor trouble at the
strike-torn Schwarze Pumpe brown coal combine, despite the fact that workers
returned to their jobs over the weekend.
The trouble started when the party capitulated to the demands of about 140
striking Algerian migrant workers for higher wages and better living conditions. The
result was a very serious reaction among East German workers at the enterprise.
Some 1,200 party workers were mobilized to bring the situation under control, and
party representatives had to occupy the central workshops to ensure security.
Many disgruntled East German workers reportedly saw the Algerian strike as an
opportunity to complain about inequitable wage scales. Party chief Honecker and
Central Committee Economics Secretary Werner Krolikowski believe that the
incident was a political provocation that must be treated with the "utmost severity."
They are eager to identify the ringleaders. Honecker reportedly said that "when
communists are among those who stand against the party, they must be thrown
out."
East Berlin's sudden decision to meet the Algerian demands led to sharply
different views between local officials and the top leadership. Local leaders were
convinced that the strike was near its end and felt that the surrender was "shoved
down their throats." They had warned East Berlin that "we will have the Polish
workers on our backs, and our own workers too." Encouraged by the Algerians'
success, Polish and Yugoslav migrant workers evidently did jump on the Algerian
bandwagon, and local officials must now explain to German workers why the
Algerians are getting more money for the same tasks.
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The Lao are taking a harsh line toward Bangkok and are refusing to cooperate
to reduce tensions along the common Mekong border.
Vientiane last week rejected out of hand a Thai proposal for joint Mekong
River patrols to assist in preventing clashes along the river. The Thai had proposed
this joint effort following several border skirmishes earlier this month. Commenting
on the Thai proposal, Radio Pathet Lao asserted that progress on relations could not
be made because Bangkok had:
--failed to return former Lao military equipment now in Thailand;
--allowed Lao non-communist exiles "to carry out activities in Thailand;"
--helped the US to "create disturbances in Laos."
Vientiane's position almost certainly reflects Hanoi's influence on the Lao
communists. The North Vietnamese have been citing the Thai refusal to return
military equipment that came from South Vietnam as a major stumbling block to
improved relations with Bangkok. Progress on Lao-Thai relations will probably have
to await a resolution of the impasse between Hanoi and Bangkok.
Meanwhile, the Lao seem to be attempting to pressure Bangkok by playing on
Thai sensitivities regarding communist insurgency in northeast Thailand. A broadcast
on October 23, after blaming the Thai for all bilateral problems, expressed
confidence that Thai "patriotic and democratic forces"-a euphemism for the Thai
communists-will eventually overthrow the Bangkok government. A Pathet Lao
cabinet member on October 23 added fuel to the anti-Thai effort by publicly
emphasizing historic Lao claims to much of northeast Thailand. He said that "sooner
or later" this area would be reunited with Laos.
For their part, the Thai are taking steps to lessen the possibility that conflicts
along the Mekong will get out of hand. Their patrol boats have been issued strict
rules of engagement, and other armed forces elements have been ordered not to
assist Thai boats involved in clashes with the Lao.
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The newly announced accord with portions of business and labor, aimed at
staving off mounting pressures on the administration, is an attempt to buy time for
the government while it continues to grope for solutions to Argentina's serious
economic problems.
Termed the "social truce," the document is a pledge to approach serious
economic problems by means other than outright confrontation. It seeks to revive
the Social Pact hammered out by the late Juan Peron in 1973, which committed
labor and business to limiting their demands in the interest of social peace and
national development.
The new accord comes amidst a wave of protest strikes and increased tension
among workers, following President Peron's recent announcement that there would
not be any new wage hikes. Workers for some time have been complaining that even
the huge increases they wrested from the government last June have been eroded by
rampant inflation. Thus far, there have been five walkouts at major auto plants in
Buenos Aires and Cordoba, while bank workers are out as well.
Union leaders, fearful of losing the support of the rank and file, generally echo
the workers' sentiments, but have so far avoided a major confrontation with
Economy Minister Cafiero. He publicly advocates holding the line on wages and
seeks to tie future increases to greater productivity. Cafiero, despite his strong
Peronist credentials and long association with labor, cannot survive indefinitely
without giving the powerful workers at least some of what they want; indeed, he has
already compromised somewhat by increasing family allowances.
Those labor leaders who are still committed to Peron's presidency eventually
could break with her if worker pressure became too heavy. In that event, the
administration would be deprived of most of its few remaining active supporters.
Some administration critics, particularly among the military, may well hope for such
an occurrence as further proof of the administration's weakness and the need to
replace it. For every officer who feels this way, however, there is undoubtedly one
who fears the emergence of an undisciplined, leaderless labor movement that would,
at the very least, greatly complicate any military attempts to govern.
The Peron administration also continues to encounter problems in congress,
where opposition leaders are pushing for an investigation of alleged high-level
corruption. Peronist politicians, while trying to steer the investigation away from the
President herself, have reversed their earlier position and voted to pursue the matter.
Presumably, they consider the investigation inevitable, and hope to lessen the
potential for damages by insisting that it be conducted in private.
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The Brazilian government is encouraging foreign cooperation with its new state
weapons industry, apparently in hopes of making its armed forces self-sufficient and
expanding the nation's export market.
Last April, President Geisel formally proposed the creation of a public
enterprise to be known as the War Materiel Industry that could also provide
incentives for industrial growth and advance strategic research and development. In
justifying the action, Army Minister Sylvio Frota emphasized that stronger
centralized government control is needed because "private enterprise, developing
without a clear and fixed orientation, had not been enough."
It would appear that government support is already having a major impact.
During the past year more than 100 directors of large firms specializing in the
production of military equipment have visited Brazil to explore investment
possibilities. Brazil has already concluded over $100 million in export contracts,
including major credit deals with Chile and Libya. A recent article in the influential
daily Jornal Do Brasil expressed special interest in cooperating with the West
Germans, stating "We have an ideal community of interest with Germany... Brazil
will take advantage of excellent German expertise in the production of arms,
including sophisticated missiles, with a guaranteed market assured."
Economic considerations may be as significant as strategic ones. The
government is attempting to bolster its sagging balance-of-payments position, and an
upswing in weapons exports would provide needed foreign exchange. Although
Brazil will probably still need to import sophisticated weapons for some time, an
expansion in exports of small arms, motor vehicles, and trainer aircraft would result
in valuable feedback from foreign buyers that might speed the transition to
self-sufficiency.
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POLAND: DIFFICULT DAYS AHEAD
October 29, 1975
Polish party chief Gierek is facing the most serious challenge to his political
skills since he consolidated his power some five years ago. The Polish people are
restive over sporadic meat shortages and prospective increases in food prices.
The current leadership in Warsaw probably has the means and political acumen
to avoid the mistakes that toppled the Gomulka regime in 1970. The situation is
such, however, that a "spark in the right place" could flare into serious trouble.
The Poles are exasperated. The mood finds expression in widespread
complaints about meat shortages and in the recent circulation of stories about
dissent within the leadership, strikes, and arson. Polish officials, who admit that the
people are dissatisfied, are trying to remedy the situation.
The dissatisfaction is basically an outgrowth of rising popular expectations in
the face of a scarcity of food and high-quality consumer goods. In 1970, Gierek
promised a better standard of living, and he has delivered on that promise. In his
first four years as party chief, personal consumption increased rapidly as a result of a
60-percent increase in real income and sharp rises in supplies of consumer goods.
Meat consumption rose from 117 pounds per capita in 1970 to 145 pounds in 1974.
Consumption of pork, the meat most Poles prefer, was up more than 28 percent
from 1971 to 1974.
Despite these advances, Warsaw has been unable to provide enough attractive
consumer goods to soak up the purchasing power generated by Gierek's wage policy.
Housing has been a major problem. In the 1971 to 1975 plan period, 1.1 million
units will have been built, and Warsaw has promised 1.5 million more by 1980.
Gierek has publicly admitted that the numbers are insufficient, but said that no
more can be built. Cars, quality furniture, and a number of popular items are also in
short supply.
Much of the increased purchasing power of individual Poles can, therefore, only
be saved or used to purchase food at artificially low prices. As a result, the demand
for food regularly outstrips the supply. Food shortages have sparked occasional
outbursts of discontent. Last spring, for example, a meat shortage before Easter
touched off numerous minor disturbances. The regime is trying to bring the supply
of food and meat into line with demand. The recent attempts to boost meat supplies
by raising procurement prices and reducing exports are no more than a-stopgap.
Al
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Polish economic specialists have urged strongly that food prices be raised to
channel excess demand to consumer durables and away from heavily subsidized food
products. Party leaders, fearful that price increases on basic foodstuffs would create
political instability, have postponed any decision. Party leaders have, however, been
laying the groundwork for price increases. They have been trying to convince the
people that price increases for food and other commodities are essential. For several
months, they have been spreading the news of the bad harvest this year and
conditioning the public to accept the need for higher food prices. They have been
enphasizing that Poland cannot go on being an"island in a sea of inflation," and that
subsidies to farmers and the food industry are putting a strain on the state budget.
Limited Options
Gierek himself apparently has accepted the need for price rises, and the
question now is essentially one of timing and size. The regime could extend the price
freeze on basic foodstuffs into 1976, while sharply increasing prices on other items,
such as alcoholic beverages. This, however, would do nothing to eliminate recurring
food shortages, especially meat.
If, as seems likely, the leadership decides to boost the prices of food and
consumer goods, Warsaw will do everything it can to avoid announcing the decision
until after the Christmas holidays and to ensure that stores have an adequate supply
of meat. Polish leaders vividly remember December 1970, when widespread rioting
in the wake of price hikes on food helped bring down the Gomulka regime.
To have any impact on demand, price hikes will have to be substantial. Whereas
Gomulka implemented a massive, one-shot increase, Gierek may well decide to
increase prices by increments over a period of time. He will probably offer the
workers some concessions, such as increased wages and reduced prices on some
consumer durables, to compensate in part for price increases on essentials. Popular
reaction will be strong, however, no matter when and by how much prices are
increased, and public disturbances like those of last spring could result.
Although there are similarities to the situation in 1970, there are also
important differences. One of these is Gierek's style. Unlike the cold, aloof
Gomulka, Gierek has been careful not to isolate himself from the people or from
other party leaders. Since September, he has spent a good deal of time visiting
mines, factories, and farms, sampling public sentiment and reminding his fellow
citizens that they never have had it so good.
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National Intelligence Bulletin
October 29, 1975
Media coverage of these events has been frank in reporting Gierek's answers to
some tough questions. Poles were told that price hikes cannot be avoided
indefinitely, that some food shortages will continue, and that some problems are not
susceptible to immediate solution. Gierek seems to enjoy a measure of popularity
and trust. Poles acknowledge his accomplishments and are appreciative of his
judicious use of the police, but they know that he could be repressive if he chose.
The Gierek team is not fictionalized as was Gomulka's leadership. There
undoubtedly are differences of opinion over policy issues, but no one seems to covet
Gierek's job and he has no obvious successor. All told, Gierek is in a stronger
position than Gomulka was in 1970, and he will probably be able to weather the
coming storm. In addition, he will probably make some personnel changes to
strengthen his economic team. For example, an important shift was made at last
Thursday's session of parliament. The ailing chairman of the State Planning
Commission, Mieczyslaw Jagielski, was replaced by Tadeusz Wraszczysk, whom the
US embassy in Warsaw considers to be the man who symbolized party leader
Gierek's commitment to sharply increased trade with the US.
Soviets in the Background
As always in Eastern Europe, the Soviet role will be important. Gierek has had
strong backing from the Soviet leadership, if only because he has brought political
stability to Poland.
Moscow has several options for dealing with problems in Poland. It can, as it
did in 1971, come to Gierek's aid with hard-currency loans to finance imports of
meat and consumer goods. The Soviets promised hard-currency credits when they
suspended grain shipments to Poland earlier this year. This level of Soviet help will
probably not suffice, and Moscow may be tapped for further loans.
In the event of widespread disturbances in Poland, Moscow could withdraw its
support from Gierek and turn to another Polish leader. The Soviets would have to
tread carefully. Polish nationalism is particularly strong, and a heavy-handed Soviet
push for a leadership change could easily backfire. The Soviets would consider
military intervention only as a last resort, for example, if the Polish party,
government, and military clearly were unable to preserve the leading role of the
party and control the population.
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