WEEKLY REPORT PREPARED EXCLUSIVELY FOR THE SENIOR INTERDEPARTMENTAL GROUP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A002400240001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 19, 2016
• Document Release Date: July 13, 2005
• Sequence Number: 1
• Publication Date: July 24, 1967
• Content Type: IR

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DIRECTORATE OF
INTELLIGENCE
Weekly Report
Prepared Exclusively for the
Senior Interdepartmental Group
Approved For Release 2005/07/20 : CIA-RDP79T00826A002400240001-3
 Approved For'Ieas
WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
EXCLUDE,, FROM AUTOMATIC
I)O`AN(.k AUING AND
DF.C LASS IFWn TION_
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Page
1. West German Defense Debate. . . . . . . . 1
2. Libya . . . . . . . . . . . . . . . . . . 2
3. UK-EEC . . . . . . . . . . . . . . . . . . 3
4. Chile . . . . . . . . . . . . . . . . . . 4
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A spirited debate is under way in Bonn, the out-
come of which will influence the future shape of the
West German defense establishment. The debate was
triggered by a cabinet decision of 6 July to trim
over $2.3 billion from projected defense expenditures
for the period 1968-71. At issue is what the cuts
are to mean in terms of men and materiel.
Chancellor Kiesinger has stated that it is by
no means certain the cabinet will have to decide "to
reduce significantly" the armed forces' personnel
strength. Defense Minister Schroeder, however, as-
serts that the only realistic choice is a troop
reduction of 60,000, spread over a two- to three-year
period, with no sacrifice to the equipment moderniza-
tion program. Finance Minister Strauss contends that
a good defense minister could keep the Bundeswehr at
its present level of effectiveness with the money
available, through economies and structural changes.
Some Socialists argue that Germany should give up
nuclear delivery systems, and build a mobile, modern,
conventional force, perhaps only half the present
strength of 460,000 men.
The cabinet evidently hopes to agree on a
defense plan prior to the convening of a special
Bundestag session on 4 September. Kiesinger will
come to the US on 15-16 August; Schroeder may make
a separate visit on 11 August.
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2. LIBYA
Although Libya remained outside the arena of
the Arab-Israeli war, the political balance of the
country has probably been greatly altered by it.
Prior to the outbreak of hostilities, the mod-
erate regime in Libya had no significant radical
opposition; even Nasir had relaxed his earlier ef-
forts to expel US and British forces from Libya. The
country was beginning to feel the prosperity of a
fast-growing oil economy, and there was little ar-
ticulate Libyan concern for the political problems
which racked most of the Arab world. The subsequent
Arab defeat brought deep humiliation to the Libyans,
who were aware of their small contribution to the
Arab cause.
Important changes in the country's power struc-
ture appear to have resulted. The crisis emphasized
once more the total absence of able ministers or
successors to the 78-year-old King, who remains
Libya's boss and only political leader. Furthermore,
previously ineffectual groups of radicals and sub-
versives, united by the crisis, have now formed a
group which could offer significant opposition to
the regime and perhaps prevent the future accession
of the Crown Prince.
The intensity of this opposition, moreover,
is reinforced by a traditional regionalism, because
it springs largely from the urbanized area around
Tripoli and is directed against the rural nomadic
power base of the regime, which originates in
Cyrenaica.
These political weaknesses, acting together
for the first time, provide a distinct threat to
the future of the present regime and. to its friendly
policy toward US interests in Libya.
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3. UK-EEC
The initial sparring over Britain's request for
EEC entry has proceeded better than might have been
expected last fall, but a hard fight lies ahead.
Despite French desires to deny them even a
hearing, the British have presented their case,
notably at the recent WEU session. There and else-
where they made clear that their conditions for
joining are minimal. This has compelled De Gaulle
to reveal his essentially political objections to
UK membership. These objections have not impressed
the Five or French domestic opinion, and the Five
are now on record in principle in favor of British
entry, as is the EEC Commission. London has thus
at least succeeded in getting the EEC formally
seized with the issue, and the council will resume
discussion in the fall.
Britain's tactical problem will be to maintain
the momentum and get formal. negotiations under way
without giving the French opportunities to attempt
to exercise a veto. Britain will need to maintain
a manifestly pro-European posture across the board
to deny the Five excuses for wavering in the face of
French pressures. London also will need to prevent
further deterioration in its economic position, as
well as increased domestic opposition during what is
likely to be a prolonged negotiation.
Among the Five, Bonn's attitude is crucial to
the UK, but remains equivocal. While willing so
far to do what is required at the moment, Bonn would
clearly find it a political and psychological wrench
to have to part. with Paris on this issue. Among
those Germans friendly to Britain, the belief that
French support is important to Bonn's Eastern policy
is a restraint on the help they would otherwise give.
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Events of the past month point to a general
movement to the left in Chilean politics.
The centrist Radical Party came under formal
control of leftists at its convention in late June.
This group opposes President Frei'sreform program
and advocates cooperation with the Communist-
Socialist Popular Action Front (FRAP).
Frei's Christian Democratic Party (PDC) is under-
going some changes which will undoubtedly add to
his problems. Members of a leftist faction won most
of the official positions in the party's National
Assembly on 15-16 July.
This
faction
had earlier played a considerable
role in
preparing
the statement issued by the PDC
National
Council
on 10 July which at least condi-
tionally
accepted
the establishment of a Chilean
commiteee of the Havana-based Latin American Soli-
darity Organization. This statement specified that
the committee must not foment violence in Chile or
in other countries, but justified guerrilla activity
in cases where democratic means are closed. The
statement has been criticized by Colombia and
Venezuela, and Frei promptly dissociated himself
from it.
Although it is by no means certain that the
Chilean electorate is becoming more leftist, the
scramble for votes in the congressional and presi-
dential elections--March 1969 and September 1970--
may induce the more demagogic leaders to advocate
policies that Chile can ill afford, such as nation-
alization of foreign-owned industries. They may
try to play upon popular disappointment with the
pace of economic and social reform under Frei's
"Revolution in Liberty."
In the past, President Frei has often been able
to rally public support by raising the specter of
a FRAP government if the PDC loses backing. With
the left wing of the PDC sounding more and more like
FRAP, this argument is losing much of its strength.
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