THE OUTLOOK FOR EASTERN EUROPEAN STABILITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00603A002600070006-4
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 32
• Document Creation Date: December 15, 2016
• Document Release Date: December 8, 2003
• Sequence Number: 6
• Publication Date: May 20, 1977
• Content Type: MEMO

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Economic Troubles ..................................... 2
The Dissident Problem ................................. 6
If Leaders Change ..................................... 8
The Soviets ........................................... 10
The Western Connection ................................ 15
Poland: A Preference for Relative Liberalization
and Autonomy, But a Serious Stability Problem ....... 18
East Germany: Forces for Instability High But
Regime Probably Up to Them .......................... 21
Hungary: The Cleverest One ........................... 22
Czechoslovakia: Prospects for Liberalization or
Autonomy Dim, For Stability Good .................... 24
Romania: Stalinist Within, Maverick Without .......... 25
Yugoslavia: Uncertain Prospects ...................... 27
Albania: A Wild Card ................................. 30
Bulgaria: The Last Satellite ......................... 30
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INTERAGENCY INTELLIGENCE MEMORANDUM
THE OUTLOOK FOR EASTERN EUROPEAN STABILITY
1. The riots by workers in Poland last year and the
subsequent emergence of serious dissident activity in Czechoslo-
vakia, East Germany, and Romania suggest that East Europe is
headed into a period of heightened political instability. The
underlying causes of instability are unchanged:
--All of the regimes are, to varying degrees, repressive
and do not command the loyalty of their people.
--The geopolitical ties to the USSR are at war with
strong nationalist sentiment, and the emotional and
cultural pull of the West.
--The economic performance of the regimes is deficient.
Moscow's own detente policy has promoted and therefore made
legitimate the idea of increased interchanges with the West.
The resulting increased trade with the West and a series of
agreements, notably those involving increased contacts between
the two Germanies and the Helsinki accord, reduced the isola-
tion of the East European people and raised expectations and
demands for increased personal freedoms and quality of daily life.
At the same time, detente fostered an atmosphere that has made
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it more difficult for the regimes to deal with the resulting in-
ternal control problems in authoritarian ways abhorrent to West-
ern sensibilities.
3. There are also new economic problems emerging. The
East European economies and the material well-being of the East
European people have grown significantly over the past 15 years.
But the growth rates are slowing down, and the prospects are good
for growing consumer dissatisfaction over the next few years.
The East European regimes will be in increased jeopardy of losing
control of the inherent tension between the rising material ex-
pectations of their people and the capacity of their economies.
This is particularly dangerous because those expectations were,
in considerable measure, consciously generated by the regimes
as a way of deflecting or absorbing unfulfilled, and unful-
fillable, political and national aspirations.
4. Excepting Poland, East European countries are resource-
poor. Even in good harvest years, the region is not self-suffi-
cient in grain. Eastern Europe is especially heavily dependent
upon energy imports. Thus dependent on foreign trade, the East
European countries have suffered the consequences of Western
inflation in recent years, higher prices for Soviet oil and raw
material imports, and larger grain import needs due to poor
harvests.
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5. At the same time, East European manufacturing plants
are obsolescent in important areas. The labor force is skilled
but productivity suffers from lack of incentives. Economic
management is still beset by the irrationalities and ineffi-
ciencies endemic to centralized planned economies led by politi-
cal operators and ideologues. The East Europeans have thus
been unable to generate sufficient exports, particularly in the
face of Western recession. The result is a large and growing
hard currency debt.
5a. With heavy debt burdens and continued uncertainties
in their Western markets, the East Europeans are faced with dif-
ficult choices. In order to keep new borrowing down, they will
have to restrict imports from the West while attempting to maxi-
mize exports. Since economic growth depends to an important
degree on imports of Western capital goods and industrial ma-
terials,* cutbacks in import growth will have a negative im-
pact on the economic health of the East European countries.
6. The East Europeans have already responded by scaling
down their growth projections for the current (1976-80) five-
year plan. The regimes are still promising an increased stand-
ard of living, although at a slower pace. There is reason to
doubt whether even these more modest projections will be met.
The leaderships will be hard pressed to balance the need to
* Graphic
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meet growing consumer expectations in the face of requirements
to increase exports, to maintain imports of Western materials
and technology, and to meet Soviet investment demands. Pres-
sures will mount to increase consumer prices, but regimes will
be wary in view of the Polish experience.
7. The East European economies will be much more severely
strained in the early 1,,980s when anticipated declining Soviet
oil production will reduce oil imports from the USSR* and con-
sequently will greatly increase East European hard currency
purchases of oil elsewhere. Although the brunt of this coming
energy crunch will probably hit beyond the time horizon of
this paper (about three years), the East European leaderships
may well begin in the next few years to perceive the dimensions
of their problem and to take some initial steps.
8. Clearly a time of increased economic constraints
does not augur well for political stability, particularly in
a region where the legitimacy of the regimes and their rulers
are chronically in question. How bad things will get politically
is much less clear. The East European people are better off
materially than ever before, and they know it. They also are
accustomed to some economic discomfiture and even deprivation.
They also know that the West too is experiencing economic troubles,
* Graph showing EE, by country, present % oil needs imported
from USSR, and anticipated total oil needs to 1983 or 1985.
Second chart showing % of Soviet oil exporting to EE, and to
West, plus % oil earns for USSR in hard currency.
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that there are high levels of unemployment in Western Europe and
the US. The regimes will bear down hard in their propaganda on
the negative aspects of economic life in the West. And East Euro-
peans have had enough experience with the ups and downs of West-
ern moral support and economic help to be no less skeptical than
hopeful about Western impact on their lives. With clever eco-
nomic tinkering and reasonable luck, many or all of the East
European regimes may dodge the various hazards of the next few
years with the grudging support of peoples reluctant to risk
their hard-won margins of improvement.
9. If regimes cannot fulfill their promises sufficiently
to keep unrest at bay, the growing gap between the standard of
living in the West and the East may become more obvious, and
unacceptable. The reaction will not be uniform in East Europe
and the likeliest trouble spots will be Poland, whose people
are the most greedy and volatile in the region, and East Ger-
many, where the attraction of West Germany cuts very deep.
10. Economic problems may also give risk to renewed
calls from some East European economists for reforms--more
decentralization, increased material incentives, and realistic
price structures. Most of the East European leaders would
be reluctant to embark on such reforms. In addition to their
ideological misgivings, they are likely to want more, not less,
centralized control at a time when hard economic choices must
be made, particularly in an era in which the political winds of
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CSCE and Eurocommunism are stirring ideological orthodoxy.
Economic and ideological pressures are also likely to make the
East Europeans more mindful of their relations with the USSR
and less inclined to get involved in policies that might raise
unnecessary questions in the Kremlin.
11. While reluctant to make basic structural changes,
the East Europeans will want to increase the output from the
private sector of the economy, and perhaps increase its share
of the economy. For example, at the last party plenum Polish
party leader Gierek approved a number of economic measures that
are designed to increase the productivity of the private sec-
tor in agriculture and retail trade--not a major departure,
but palliative.
12. The East European leaders find that not only is
their performance in the economic arena being weighed against
the material achievements of the West, but increasingly, their
very legitimacy as rulers is being judged against the standard
of Western notions of freedom, liberty, and human rights. Those
values are of course fundamentally at war with how the East
European Communist party leaders rule, but those Western values
have some historical roots in East Europe, in contrast to the
USSR.
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13. The emergence of a nascent dissident movement in
Eastern Europe over the past six months is one manifestation
of the increasingly destabilizing ideological penetration of
the West. While the dissidents are, almost by definition, vision-
aries, they are also aware of their limited resources, the lack
of active popular support, and, most important, the ever-present
threat posed by the Soviet Union and its troops. They are
trying to modify prevailing strictures so as to gain elbow
room to push for eventual change. This is one reason the re-
gimes feel they cannot give ground by recognizing the kind of
broad ''rights'' the dissidents assert, even if, in practice,
they are willing or compelled to tolerate their activities.
13a. Nowhere do the dissidents seriously threaten the
rule of the Communist leaders, nor will they do so in the fore-
seeable future. But they do have the potential for making very
serious trouble. It seems safe to assume that there is a
reservoir of passive popular sympathy for the dissidents, although
most would shy away from the risks of even mild active support.
The East European leaders must be concerned that a time of in-
creased economic constraints and disappointments will increase
the trouble-making potential of the dissidents.
14. The dissidents also make it more difficult for East
European regimes to maintain the kind of political relations with
the West and the US that can be helpful on the economic front.
Their activities also create another potential source of dis-
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agreement and discord with Moscow and among the East European
party leaders themselves, who differ on what tactics to pursue.
These very tactical differences themselves undercut any re-
gional display of discipline or ideological consistency. So
far, the East Europeans have been giving considerable latitude
in handling the dissidents by the Soviets, but this could
change. And if Moscow does try to call the shots, or if it im-
poses a tougher dissident policy on the East Europeans, then
the prospects for miscalculation and serious troubles increase.
Specific consequences are far less certain or predictable al-
though they may well become severe and might even result in
a situation reminiscent of Hungary in 1956, or bring down one
or more leaders, like Gomulka in 1970.
15. The other most palpable contingencies which could
have a significant impact on the internal stability of any
East European regime and on its relations with the USSR and
the West center on the political longevity of some of the lead-
ing actors. If Tito were to leave the scene in Yugoslavia, for
example, a chain of events might be set in motion that would in-
evitably reverberate in the rest of Eastern Europe. Serious
instability in Yugoslavia or a clearly discernable movement
toward the West by a successor regime are the kind of develop-
ments that would greatly alarm the Soviets and the East European
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leaders. The latter would almost certainly be inclined to
tighten up their internal control and to take special care
in their external policies not to give the Soviets cause for
concern. Dissidents and often disgruntled elements in coun-
tries like Poland, East Germany, and Czechoslovakia might be
goaded by the developments in Yugoslavia to press harder for
changes at home.
16. A change in the leaders in any of the East Euro-
pean countries might have an unsettling effect. Any new lead-
ers might well implement internal policies differently. Most
would also be relatively uncertain quantities to the Soviets
and would have to gain their confidence over time. In the
interim, Moscow would try to keep a tighter rein, and this
could result in more orthodox internal policies and a less
venturesome policy with the West or, in the case of Romania,
with China and the Third World.
17. A leadership change in the USSR itself would have
a more wide-ranging and potentially more pronounced effect.
The East European leaders are comfortable with Brezhnev be-
cause he has given them considerable latitude in managing
their internal affairs, because his demands have by and large
not been unreasonable and, not least, because they have with
time gained some sense of what he will and will not let them
get away with. If Brezhnev left his position of power, a whole
new series of understandings would have to be established.
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This might happen with relative ease if Brezhnev's successors
consolidate power relatively smoothly and have similar policies
toward East Europe and toward the West. But a period of politi-
cal infighting and factionalism in the Kremlin, or a new So-
viet leadership with a relatively stiffer and more ideological
stance toward Eastern Europe would be very unsettling. Con-
fusing and contradictory signals on policies and personalities
coming from the Kremlin and the political jockeying there might
well be mirrored in the politburos in Eastern Europe. A less
.pragmatic Soviet policy approach toward Eastern Europe would
restrict the leeway of the national parties to deal with their
own problems and might well compound existing economic diffi-
culties and political unrest.
18. The Soviets would like an Eastern Europe that was
as one with the USSR, a series of nominally independent states
that ordered their internal and external affairs in ways that
were pleasing to Moscow. But Moscow has few illusions and
knowns, from bitter experience, that there is frequently a
contradiction between economic or political subservience to
Moscow and internal political stability. While Czechoslovakia
in 1968 proved that Moscow could be pushed too far--and will
intervene with force if it feels its security interests are
threatened--by and large the Soviet leadership under Brezhnev
has opted for stability in Eastern Europe at the expense of
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ideological purity. In the case of Romania, the Soviets have
suffered a divisive and mischievous voice in the Warsaw Pact
and on the international scene, in part because they know that
Ceausescu runs a tight Communist state at home.
19. Moscow is obviously concerned about the unrest
in Eastern Europe. A blow-up in any country not only has impor-
tant implications for the region as a whole, and for its ties
to the USSR, but also for the internal tranquility of the Soviet
Union itself and for whatever agenda of East-West business may
be underway at the time. The variety of approaches in Eastern
Europe to the dissident problem is prima facie evidence that
Moscow has not imposed any uniform line on its allies. The
Soviets feel uncomfortable with the more permissive approaches
of the Poles and the Hungarians, but they have reluctantly per-
mitted both Gierek and Kadar to fashion their tactics to fit
their own circumstances. An important reason is that, whatever
their deviation from the Soviet model, Gierek and Kadar are, in
Soviet eyes, good Communists who will not be metamorphasized
into social-democrats and who will not forget the special rela-
tionship with Moscow.
20. In Moscow, results count.
Kadar's most powerful
argument for his policies is that they work, that Hungary does
not have a significant dissident or stability problem, and is
still a Marxist state faithful in its own way to the USSR.
Gierek argues from a weaker base and would make the case that
the situation in Poland would get worse if he tried tougher
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tactics. If things there get worse anyway, Gierek will be in
deep trouble with Moscow.
21. The Soviets have also come to understand that
there is no quick or easy fix for what ails a country like
Poland or East Germany. Moscow has supported Honecker's ef-
forts to get on top of the problems caused by the Helsinki ac-
cords and the increased Western influence on the East German
population. But the problem for Honecker, and Moscow, is that
the steps he has taken to promote an East German identity, for
example, by eroding the special status of the GDR's capital,
East Berlin, are not likely to significantly ameliorate the
yearning of many East Germans, particularly those in the tech-
nical and professional classes, to travel or emigrate to the
West. Detente in central Europe has created internal pressure
on Honecker that will not go away unless detente goes away.
22. The Soviets can help promote political stability
in East Europe on the economic front. Indeed, they helped
create the tougher economic environment in which the East Euro-
peans must operate. In 1975, Moscow sharply increased the
price it charged East Europeans for oil and other raw materials,
and prices also went up in 1976 and 1977. For some time, the
Soviets have been reluctant to make long-term commitments for
key raw materials, especially oil, and have become more insis-
tent about getting quality East European products. They have
required the East Europeans to invest in Soviet development
projects in return for guaranteed supplies of raw materials.
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23. Moscow's policies, however, have derived essentially
from its own economic problems, plus a lingering feeling that
the East Europeans have not been doing their share. Why should
the Soviet Union make sacrifices to ensure that people in East-
ern Europe continue to live better than Soviet citizens?
24. In gross economic terms, Eastern Europe has become
more of a liability than an asset for the Soviet Union. And
the trend lines, particularly as Soviet oil production declines
in the early 1980s, will get worse. The Soviets will have to
make some economic sacrifices for Eastern Europe, for the al-
ternative is political unrest which is the last thing Moscow
wants. The problem is to establish the proper balance between
economic and political equities and this becomes harder as the
Soviets begin to face up to their coming oil shortage and a more
constricted Soviet economic outlook generally.
25. One consequence of these economic pressures is
that the USSR will have to continue to look relatively favorably
on Eastern Europe's economic ties to the West. They hope that
the West will help relieve the economic burden on the Soviet
economy by financing Eastern Europe's purchases of industrial
and raw materials and agricultural products that are addi-
tionally in short supply there, and by helping to modernize
East European industry so that it can pay with quality goods
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for Soviet imports. The Soviets may well be more willing to
countenance such ideologically questionable arrangements as
those involving joint ventures with Western companies. The
Soviets will be willing to allow a more favorable political
relationship to develop between Eastern Europe and the West
to the degree that seems necessary for closer economic ties.
But how far they will be willing to let the East Europeans go
in showing more independence of the USSR and in taking steps
toward liberalization at home will depend on how much economic
pay off is in prospect, their confidence in the particular
Communist leader's ability to retain essential control, and
how Moscow perceives the political intentions of the US and
the West. This is a complicated mix that Moscow will recalculate
as specific situations arise.
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26. Without making any special effort, the West has a
substantial, unsettling impact on East Europe. Many in the
region identify with Western cultural and social traditions,
and consider an ''Eastern way'' in alliance with Russia as
alien to those traditions. The Western bias is one reason
that some East European intellectuals are attracted to Euro-
communism, that is, a model of Communism that is allegedly
more in keeping with Western traditions. Other East Europeans
are drawn to the dynamic and material features of Western life
that frequently contrast sharply with the drabness of their
own lot.
27. At the same time, the West has been in some respects
a force for stability. Western goods bolster economic growth
and enrich consumer supplies, Western credits soften the impact
of large trade deficits, and Western contacts cater to, as
well as arouse, popular aspirations. Eastern Europe's economic
needs have been a strong underlying motive for detente in
Europe and for the region's opening to the West. These needs
will grow over the next few years, and while increased trade
and credits from the West will not be a panacea. for Eastern Europe's
economic ills, they can be of considerable help. The East
European leaders will discover that the USSR will be increas-
ingly reluctant to bail out their economies and that they must
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do more business with the West. Those countries which do not
have MFN will have increased interest in getting it. All will
show increased interest in barter arrangements with Western
companies and in joint economic ventures. The Soviets will
pose fewer objections to such innovative and ideologically
questionable activities. There are definite limits to present
and feasible Western economic input to East European economic
needs, however, and the West European share is, and is likely
to remain, much greater than that of the US.*
28. At the same time, the East Europeans and the
Soviets will be increasingly wary of Western political inten-
tions with respect to East Europe. Feeling more vulnerable
at home because of their economic problems and because of
the increasingly vocal and assertive actions of dissidents,
East European leaders will continue to give ground, although
reluctantly, on some human rights issues of interest to the
West. But they will be hypersensitive to evidence that the
West is seeking to use its economic leverage to bring about
* Graph here on percentage of East European trade (by coun-
try) with West (by US, West Germany, the West, USSR) and
some words estimating how much more trade with West as a
whole and US might realistically grow in next three to five
years.
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significant political change in East Europe. The Soviets in
particular will be disposed to see evidence that the West is
seeking to make trouble for them in their backyard. They
will continue to see in the US emphasis on human rights
hostile political, rather than humanitarian, motivation and
impulse. If problems of internal order grow serious enough,
if for example there is a blow-up in Poland or East Germany,
interest in increasing economic ties to the West will of
course give way to the need to restore order and discipline.
Under these circumstances the Soviets would have little choice
but to accept the damage to wider equities with the West.
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Poland: A Preference for Relative Liberalization and
Autonomy, But a Serious Stability Problem
29. Of all the East European states, Poland will proba-
bly continue to hover closest to serious instability over the
next two or three years. Polish workers have several times
demonstrated their ability to use force to change unacceptable
policies. Disaffection with the regime is also widespread
among students and intellectuals. A dissident movement emerged
in the aftermath of last year's worker riots over proposed
price increases, and the dissidents will continue to try to
make common cause with the workers and students. The regime
has had to treat the dissidents circumspectly for fear of
sparking more disturbances and out of a desire not to blacken
its name in the West. It will also continue to try to main-
tain an accommodation with the powerful Catholic church, which
has been an important force for stability.
30. Party leader Gierek's primary goal will be to
keep the lid on. He can do little else, for there are no short-
term solutions to the economic problems that sparked the
June 1976 riots over sharp price increases on basic foodstuffs.
Supplies of consumer goods will continue to fall short of de-
mand. The regime will continue to juggle reserves of foodstuffs
and import extra supplies of consumer goods to take the edge off
frustration and to get through sensitive periods like Christmas
and Easter.
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31. Much of Poland's economic progress since 1970
has been due to extensive imports of Western technology.
This practice cannot continue at such a rate during the next
five years because of its serious balance-of-payments problem.
Hence, the emphasis will be on finding ways to use the
resources already on hand more efficiently. The leadership
has hesitantly taken measures to encourage private farmers
and craftsmen to expand their activities. More investment
funds will be diverted to the production of consumer goods.
Poland may well seek refinancing of its Western debt. But
the present mood of the people and the conservative nature of
the Polish party and government bureaucracy make it highly
unlikely that there will be much real progress out of the
basic economic predicament over the next few years.
32. Gierek still is in control and still committed
to his relatively flexible economic, political, and cultural
policies. He has Moscow's support and he will retain it un-
less there is new and more dangerous public disorder. If
Gierek could not or would not take the harsh steps necessary
to get on top of such a situation, Moscow would look for
another leader for Poland. The Soviets clearly have no desire
to go this route, but they are concerned to avoid a loss of
political control in Poland that compels the intervention of
Soviet forces.
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33. Meanwhile, Poland is likely to say and do the mini-
mum to appease Moscow on Soviet foreign themes unpalatable to
the US. However, that minimum will rise with respect to policies
on which Moscow is trying to orchestrate a united East European
position (e.g., human rights) or generally, in a situation in
which Gierek's internal control appears tenuous.
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East Germany: Forces for Instability High But Regime Probably
Up to Them
34. Western influences are greater in East Germany
than anywhere else in East Europe. Most East Germans watch
West German television and there have been more than 35 mil-
lion visits by West Germans to East Germany since 1971. The
result is a continuing sense of German national feeling which
is the Honecker regime's greatest obstacle to the stabiliza-
tion of political control.
35. The pressures from the East German people for a
better material life and for the ''right'' to travel and even
emigrate to the West seem to be growing. The Helsinki agree-
ment has been, and will continue to be, a stimulus. The
pressures will grow worse if the East German economy falters
badly, particularly in comparison to that of West Germany.
Under such circumstances, Honecker's relatively moderate
policies will get tougher which will, in turn, generate more
dissatisfaction.
36. So far, the regime has contained the challenge
of Western influence by paying attention to consumer well-
being, by reacting to popular grievances, and by suggesting
that even closer contacts with West Germany will be possible
at some future time. It is aided by relatively efficient
and disciplined party and security organizations.
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37. Honecker will continue efforts to erode the spe-
cial status of East Berlin so as to strengthen the image of
East Germany as a separate and fully ''normal'' nation state.
This will inevitably cause tension with West Germany and the
Western allies. Brezhnev, not Honecker, will decide how far
the East Germans go, and Soviet equities beyond East Germany
will be critical to each recalculation Moscow may make.
38. The East Germans will continue to pursue improved
relations with the US and Western Europe because they want to
strengthen their government's legitimacy, expand its trade
possibilities, and make it less dependent on economic dealings
with West Germany. They will continue to have Moscow's gen-
eral backing, although the Soviets have misgivings about the
extent of East Germany's economic relations with the West, and
particularly its tendency to keep Moscow in the dark about
dealings with West Germany.
39. The Kadar regime seems well prepared to handle the
economic and political challenges of the coming years without
serious problems. Its political finesse, economic expertise,
and solid popular base have been amply demonstrated over the
last several years. Budapest has raised prices on consumer
goods and cut back domestic consumption cautiously and in-
crementally enough to provoke nothing more serious than grumbl-
ing; it has ignored a modest show of political dissidence and
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prevented it from growing; and it has made solid, if limited,
progress in stemming its foreign trade imbalances.
40. Stability in Hungary--at a time of greater turmoil
elsewhere in the region--augurs well for a continuation of
moderate policies. While there has been some recentralization
of decisionmaking under the impact of economic pressures, the
essential features of Hungary's economic reform are intact
and likely to remain so. The measure of personal freedoms
and cultural diversity that Hungarians enjoy has proven an
effective innoculant against intellectual dissent.
41. In fact, there is likely to be a greater show of
Hungarian pragmatism in the near future. The Kadar regime
knows that the Hungarian consumer will have to withstand
more price increases, realizes that it has drawn heavily on
accumulated political capital, and is therefore taking steps
to expand its base of support. It has shown a new readiness
to reach an accommodation with the Catholic Church and has
mounted a new campaign to get back the national treasures
held by the US and MFN status in trade. It has been more
willing to cater to nationalist aspirations with a more active
foreign policy, particularly with respect to Western Europe.
Kadar appears to have garnered Soviet endorsement of these
moves, which taken together comprise a show of greater autonomy
in foreign and domestic affairs. Budapest can be expected
to pursue them with caution, keeping a close eye on Moscow's
reactions.
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42. Serious instability seems possible only in the
event of Kadar's abrupt departure from the Hungarian scene,
an unlikely eventuality in the near future but one that cannot
be ruled out because of Kadar's perennially poor health.
Kadar is not easily replaceable. He has gained Soviet confi-
dence and understanding while, at the same time, cultivating
a domestic popularity among Hungarians, for whom anti-Soviet
sentiments are part of their national feeling.
Czechoslovakia: Prospects for Liberalization or Autonomy Dim,
for Stability Good
43. In Czechoslovakia, political and economic stagnation
continues to masquerade as stability, and prospects for in-
ternal liberalization or economic or foreign policy autonomy
are dim. The Prague leadership is divided, mediocre, and
has little genuine support or respect in the country. The
emergence of the Charter 77 dissident group has been a pointed
reminder that the problems and sentiments that gave rise to
the ''Prague Spring'' in 1968 are still at work. The economy
is hard pressed by Soviet and Western price increases, badly
needs extensive modernization, sorely misses the expertise of
the 1968 reformers, and needs greater productivity from an
apathetic populace.
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44. All these factors would add up to a seriously
unstable situation, if it were not for the apathy and despair
that has pervaded much of the popular mood since the collapse
of the Prague Spring.
45. The prospect is for more of the same over the
next few years. Economic problems are not likely to result
in serious popular disorder and without strong pressure from
below, the impasse between the moderates led by party leader
Husak and hardliners led by Bilak is likely to continue.
Moscow seems comfortable with a divided leadership in Prague,
and it will continue to be reluctant to endorse any efforts
to introduce economic innovations or to bring back into the
mainstream of Czechoslovak political and economic life those
who were implicated in the 1968 revolution. Czechoslovakia's
foreign policy positions are likely to continue to track
Moscow's closely.
Romania: Stalinist Within, Maverick Without
46. Party leader Ceausescu is not likely to lose his
firm grip on Romania's rigidly authoritarian political and
economic system during the next several years. Party cadre
and popular resentment of Ceausescu's authoritarianism and
personality cult may grow, but we judge that Ceausescu can contain
or thwart any such reactions effectively.
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47. Romania faces an economic slowdown--largely because
it lacks the substantial oil and coal resources necessary to
sustain its projected annual growth rate of 8 percent. This
will affect the Romanian consumer, and could spur grumbling
within the leadership over Ceausescu's overly ambitious
economic goals. But it probably will not provoke serious
popular disturbances or threaten Ceausescu's predominance.
Ceausescu has long slighted consumers, always with a keen
sense of what they will bear, and in the past has successfully
blamed underlings for economic shortfalls.
48. Ceausescu is unlikely to relax the strict domestic
controls which he considers necessary to maintain his personal
power and to allow him freedom of maneuver vis-a-vis the Soviets.
The appearance of Romanian dissidence--as feeble as it is--has
alarmed Ceausescu, and although he has so far shown reasonable
finesse in containing recent dissident stirrings, he has also
stepped up his efforts to increase vigilance in the media and
cultural affairs.
49. Ceausescu will continue to pursue his ''independent''
foreign policy. It appeals to Romanian national egotism and
is probably supported by the political elite as well as wider
segments of the populace. But it will also come under
increasing pressure because of Romania's heavy dependence on
the USSR as a source of raw materials and as a market for its
poor quality goods. The thaw in Soviet-Romanian relations
over the past year stems in part from such considerations.
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50. Ceausescu will continue to pursue a ''special re-
lationship'' with the West. It provides psychological sus-
tenance for his maverick stance vis-a-vis Moscow and has
helped support Romania's economic growth. The economic mo-
tivation will grow as the Romanian economy slows down.
Yugoslavia: Uncertain Prospects
51. Prospects for stability in Yugoslavia over the
next,, two to three years are clouded by the likelihood that
Tito will die within that period while the succession in the
party is still unsettled. We are not certain how smooth or
bumpy the first few years without Tito will be, both with
respect to party leadership and to federal cohesiveness.
Party leaders may work out their political and policy rela-
tionships with typically intricate Balkan machination but
escape seriously straining the country's institutions. There is
also a real possibility, however, that nationalist tensions
or economic discontent may prompt popular disturbances and
expose weaknesses of the civilian leaders. In this
event, various outcomes are possible including a military
takeover and/or active Soviet meddling.
52. There are also strains in the shorter term. Prepara-
tions for the 11th congress next year have already begun to
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trigger tests of strength among the contenders for party
53. The regime's repressive internal policies of
the past five years--part of an effort to pave the way for
a tranquil succession--will probably continue after Tito
dies, when uncertainties about external ''threats'' will give
them new impetus. Liberals--out of favor for some time--
are looking for opportunities to moderate these policies
as they try to enhance their political position before Tito
dies. Their prospects do not look bright.
54. Yugoslavia will continue jealously to guard its
independence from the USSR. Its autonomous course within the
Communist movement and in international affairs has been a
deeply-rooted feature of its national policy since 1943, and
appears to conform with the large degree of anti-Soviet feeling
within the party and among the populace. The proximity of
Soviet power and Moscow's potential for mischief-making inside
Yugoslavia makes the Soviet Union a matter of constant concern
to Yugoslav policymakers. Tito's support of autonomous trends
in the Communist movement, his identification with nonaligned
goals, and his efforts to maintain working relationships with
China and the West are all intended to keep Soviet influence
at a distance as well as to advance Yugoslav national aspira-
tions to count on the world scene.
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55. Tito has tried to work with Brezhnev to establish
the norms of a Soviet-Yugoslav relationship that would help
carry Belgrade through the immediate post-Tito period. He
also shares many ideological goals with the USSR, not the
least of which is that Yugoslavia should remain a Communist
country after he leaves the scene. Moscow's attitude toward
his successors will turn first on their apparent dedication
to keeping Yugoslavia from alarming movement toward the West
or toward social democracy.
56. Western influence on Yugoslav stability in the
coming years could be considerable. Economic recovery in
the West means a better forecast for Yugoslav growth--in
particular a breather in expected problems in unemployment.
The Yugoslavs are also counting on Western support for
Yugoslavia's independence and ''nonalignment'' in the
immediate post-Tito period. They would welcome enthusiastically
any Western and US efforts to contain anti-Titoist emigres,
which they consider a serious threat to stability in Yugo-
slavia. But the highly suspicious Yugoslavs are in fact in-
secure enough about their national and international standing,
and resentful enough of stronger powers, that they can also
easily misread or even deliberately miscast actions of the
West, especially the US.
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57. Serious ideological differences with China and
reduced Chinese assistance to the Albanian economy have evi-
dently prompted Tirana to break out of its isolation in
Europe. It has made some cautious overtures to Greece, Turkey,
and France in search of increased trade. It seems likely
that these efforts will continue. The Soviets want to get
back into Albania, but their prospects are poor.
58. How far Tirana will go in overcoming its xenophobia
depends in part on how its internal politics develop. These
have been in some turmoil and a number of younger people have
emerged whose political orientation is not clear. No major
adjustments are likely as long as party boss Hoxha and
Premier Sheha are in power. But our information on Albanian
internal forces is fragmentary and a political upheaval should
not be excluded. Should one occur--whatever its policy
directions--it would provide a destabilizing focus for other
endemically troubled nationalist currents in the Balkans.
59. Bulgaria has been, and probably will continue to
be, the most stable country in East Europe. The recent purge
of party leader Zhivkov's long-time associate Boris Velchev
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is likely to precipitate numerous changes further down the
party hierarchy. But these are unlikely to change Bulgaria's
close economic and political affiliation with the Soviet Union.
Popular affection for Russia predates the birth of Bulgarian
Communism, and Bulgaria can be counted on to carry a spear
for Soviet foreign policy positions.
60. Bulgarian domestic policies will continue to be
among the most conservative in East Europe. There has been
evidence of some popular dissatisfaction with economic and
social conditions, but the chances of large-scale unrest seem
remote. Intellectual dissent will remain only a minor irritant,
in large part because Bulgaria is both geographically and
intellectually far removed from the West.
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