NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029100010008-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: September 18, 2006
• Sequence Number: 8
• Publication Date: July 6, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Tuesday July 6, 1976 CI NIDC 76-157C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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Top Secret
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State Dept. review completed (Security Classification
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National Intelligence Daily Cable for Tuesday, July 6, 1976.
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The NID Cable is for the purpose of informing
JAdolfo Suarez, who was sworn in as Spain's prime min-
ister yesterday, is a bright, articulate, 43-year-old politician
who supports political reform in spite of his close ties to the
Franco regime's National Movement.
King Juan Carlos evidently chose him over the other
two candidates presented by the Council of the Realm because of
a close personal. relationship that has developed between them
and a belief that Suarez will provide vigorous leadership in mov-
ing forward with the stalled political reform program.
The King reportedly wanted to end the generation gap
that existed between him and the 68-year-old former prime minis-
ter, Carlos Arias, who appeared unwilling or unable to cope with
opposition to the reform program among rightists as well as the
deteriorating economic situation.
Suarez' career has been in the National Movement but,
as minister of the Movement in the outgoing cabinet, he led the
way in deemphasizing it. He publicly supported the new law
legalizing political parties last month. His relative inexperi-
ence and his previous connections to the Franco regime, however,
have led various politicians and newspapers to reserve judgment
on him at least until his cabinet is announced.
Reports that several reformist ministers in the out-
going cabinet have refused to serve under Suarez may mean that
the new cabinet will be denied a reformist image, at least in-
itially. Foreign Minister Areilza, who was one of the three can-
didates for prime minister proposed by the Council of the Realm,
and Interior Minister Fraga reportedly refuse to stay at their
posts, and the information, education, and justice ministers
will not remain.
A reliable source told the US embassy that both Areilza
and Fraga felt they had received a slap in the face by the King
who had neither consulted them nor told them of his intention
to request Arias' resignation.
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Other sources report these ministers also object to
Suarez because of his rumored plans to bring technocrats of the
Roman Catholic lay organization Opus Dei back into influential
positions. The Opus Dei technocrats planned Spain's economic
boom in the 1960s but were removed from the cabinet as a result
of jealousy over the power they wielded. Their managerial tal-
ents would be useful at the present juncture.
Should Suarez call back a large number of the Opus Dei
technocrats his cabinet might be reminiscent of those of a
decade ago, Such an image
might hinder the reform program, and especially the King's
efforts to get the democratic opposition parties to participate
in the referendum on constitutional changes in October. A number
of opposition part leaders have expressed disapproval of the
referendum.
The agreement over the weekend among Italy's major
parties to give the Communists the presidency of the newly
elected Chamber of Deputies is a substantial concession that may
eventually become part of an arrangement under which the Commu-
nist Party would agree to cooperate with a government in which
it holds no cabinet posts.
I IThe parties also decided that the Christian Democrats
wou receive the presidency of the Senate and that the Social-
ists, Italy's third largest party, would receive a substantial
number of second echelon posts.
I I At their first meeting yesterday, the Chamber confirmed
Pietro Ingrao, a leading Communist Party figure, as president
and the Senate selected Amintore Fanfani, a Christian Democratic
notable who has served several times as premier.
The Communists have been insisting that their new
strength in parliament entitled them to the presidency of either
the Chamber or the Senate, posts previously held only by govern-
ing parties. At the same time, the Communists have hinted that
such a concession might induce them to agree to an arrangement
under which they would be consulted formally on a new government
program and agree not to oppose it in parliament.
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It is generally recognized in Italy that some degree
of Communist involvement is necessary to the success of any eco-
nomic recovery effort. It also is agreed, however, that it would
be politically difficult, if not impossible, for the Christian
Democrats to offer cabinet membership to the Communists at this
time.
I No timetable has been set for negotiations on a new
governmen , although they could begin later this week.
Last week, the Christian Democrats officially proposed
A coalition in which the Socialist Party would be their major
partner and in which the smaller parties--excluding the neo-
Fascists--would have limited roles. The Christian Democrats
offered to consult with the Communists on the government's
program provided they agreed to remain officially in the
opposition rather than become part of the government's working
majority in parliament as the Socialists have been demanding.
The negotiations are likely to center on an effort to
e ine t e Communists' role in a way acceptable to all three
major parties. The Socialists have yet to comment on the sub-
stance of the Christian Democrats' proposal and have said only
that they will not discuss it bilaterally with the Christian
Democrats. The Socialists insist that the negotiations take
place in a round-table format similar to that which produced the
agreement on division of the parliamentary posts. 25X1
Palestinian leader Yasir Arafat returned to Lebanon
through Syrian-controlled territory on Sunday and met there
almost immediately with Syrian Foreign Minister Khaddam and offi-
cials of the Christian Phalanges Party to try to negotiate another
cease-fire. Representatives of Kamal Jumblatt's leftist coalition
were asked to join the talks, which were scheduled to resume
Wednesday under the auspices of Arab League Secretary General
Riyad. The talks, however, were canceled reportedly due to the
renewal of fighting.
haddam arrived in Moscow yesterday for a four-day
visit. His trip, which had not been announced beforehand by
either side, is the first high-level Soviet-Syrian contact since
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Premier Kosygin's visit to Damascus early last month. Syria's
intervention in Lebanon has deeply troubled Moscow because it
has pitted Damascus against the fedayeen and left-wing Lebanese
who are also on friendly terms with the USSR. Foreign Minister
Gromyko probably is doing whatever he can to encourage the
success of the multi-party peace talks.
returned to Beirut from Damascus, despite an announcement last
week that he was ending his mediation mission and would return
to Libya.
Tall Zatar refugee camp and are engaged primarily in mopping
up operations. Fighting continued in several other areas, in-
cluding just south of Tripoli where the Palestinians opened up
a new front. They attacked the town of Chekka and several other
nearby villages, presumably in retaliation for the Christian
assault on Tall Zatar.
tinian- or leftist-controlled towns in the northern Bekaa Valley
as well as the southern port of Sidon. The Syrians shelled a
ship trying to enter the Sidon port on Saturday.
just north of Beirut over the weekend, tightening their control
over access to the capital. The Palestinians say the Syrians
shelled one of their relief columns trying to reach Tall Zatar
on Saturday.
dan President Amin is planning to retaliate militarily for Kenya's
complicity in the Israeli rescue operation at Entebbe Airport on
Late Monday Libyan Prime Minister Jallud reportedly
The Christians claim they have overrun most of the
Syrian forces maintain their blockade of several Pales-
The Syrians apparently linked with Christian forces
//Kenyan officials reportedly fear that Ugan-
Saturday.
//For the moment, Amin appears to be playing the
role of the aggrieved party and accepting the sympathy of the
USSR, Egypt, Iraq, and other countries that have condemned the
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Israeli raid. In his public statements, Amin has stressed the
killing of Ugandan troops and his "humanitarian role" in. negoti-
ating for the release of the hostages. He has called for inter-
national condemnation of Israel. and Kenya.//
//Amin has probably been shaken, at least ternporar--
ily, by the destruction of a sizable portion of Uganda's ineffi-
cient air force during the Israeli raid and by the apparent close
cooperation between Kenya and Israel. Amin, who received military
training in Israel, has long had a high regard for Israel's mili-
tary capability.//
//Amiri may believe he has been so humiliated by the
raid that he must boost his image with a military move against
Kenya or at least make some threatening gestures.
//The OAU, which ended its summit in Mauritius yes-
y, as condemned the Israeli raid and called for a UN Secu-
rity Council session. There apparently was little or no direct
criticism of Kenya at the OAU session.//
//Many OAU states may privately sympathize with the
Kenyans in their efforts against the terrorists and Amin, espe-
cially in view of indications that Ugandan soldiers cooperated
wtih the hijackers.
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//As political rhetoric and tensions between
Greece and Turkey over the activities of the Sismik I increase,
the possibility grows that a clash could take place, either by
accident or miscalculation, although both countries would like to
avoid any incident.//
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//A Turkish air and naval exercise called Sea
Wolf began yesterday. In anticipation of the exercise, Greek
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armed forces units have been at a full state of readiness since
Sunday. US military attaches in Ankara report that the exercise
is a regularly scheduled operation to test the fleet's defensive
capability. Although this exercise may coincide with the sailing
of the Sismik I, we have no evidence that the two events are re-
There are conflicting reports, however, about the plan-
ned route and activity of the Sismik I after it enters the Aegean.
A Turkish press report last Wednesday states that the ship will
enter disputed waters near the Greek island at Lesbos by itself
sometime in mid-July. Even if this report is true, there are in-
dications that the stay in disputed waters will be brief and sym-
bolic so as to avoid unduly antagonizin the Greeks. 25X1
F__ I
Efforts to revive the Cypriot intercommunal talks are
meeting with little success; neither Greek nor Turkish Cypriot
leaders are willing to compromise on procedural questions.
The main stumbling block is the Turkish Cypriots' in-
sistence that substantive issues be taken up by subcommittees
and the Greek Cypriot demand that an agreement in principle on
the territorial question be concluded first.
Makarios says the Turks are not ready to negotiate
seriously and that international pressure is required to force
them to do so. He will raise the Greek Cypriot case at the non-
aligned conference in Colombo in August and is urging Moscow to
take more interest in the Cyprus problem. He also intends to
take the issue to the UN General Assembly this fall.
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Buoyed by his own landslide victory in the recent
I Makarios' strategy for a "long struggle" has become
an issue in the parliamentary election campaign now being waged
in the Greek Cypriot zone. Former Greek Cypriot negotiator
Glafkos Clerides is fighting a spirited battle for a "realistic"
strategy, but he has little chance to overcome the political
forces Makarios has arrayed against him.
Turkish Cypriot elections, Rauf Denktash has been just as un-
moved by Waldheim's efforts as Makarios and has adopted an even
tougher line than the mainland Turks. Denktash declared to UN
Special Envoy De Ceullar that in any new round of talks the
Greek Cypriots must agree to all his criteria on territory as
well as to a two-zone federation with a weak central government.
Only then would he agree to consider minor "corrections" in the
line between Greek and Turkish sectors.
Denktash also indicated for the first time that Morphou
and Famagusta would remain under Turkish Cypriot control even if
some Greek Cypriot refugees are allowed to return.
De Ceullar intends to travel to Athens and Ankara next
month in an effort to win some backing for Waldheim's effort.
The Turks may be persuaded to prevail on Denktash to reopen the
talks under Waldheim's formula. Athens, however, has far less
influence on Makarios, who is likely to oppose a reopening of
the talks without some guarantee that Ankara means to deal sub-
stantively with the problem.
NATO representatives have begun steps to coordinate
member country military aid to Portugal; this will facilitate
efforts to integrate the Portuguese military more fully into
the Alliance.
Allied officials have agreed to establish terms of
reference for an ad hoc group to oversee assistance for the
modernization of the Portuguese armed forces. The NATO plan,
which includes the formation of an air-transportable infantry
brigade, foresees a European role for the Portuguese.
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//The Portuguese have expressed appreciation
-or the limited support provided already by West Germany and
the US.//F--
further evidence of its desire to become more involved in the
Alliance, Lisbon has also decided to play a more active role
in NATO and will attempt to join the European Program Group--
the European-based arms standardization effort.//
//Lisbon wants the ad hoc group to move quickly
and tentative plans call for a meeting this month, with the
terms of reference to be readied for NATO approval in September.//
//Britain's Labor government announced plans last
week to ease price controls in an effort to stimulate the coun-
try's economic recovery. The changes are scheduled to take ef-
fect August 1, the start of the second year of the government's
anti-inflation program.//
//The main changes are:
--An increase from
20 percen
t to
35
percent
in
the propor-
tion of the costs
in higher prices.
of new inv
estme
nt
that can
be
passed on
--Continuation of tax breaks gained through liberalized in-
ventory accounting procedures.
--Measures to soften price regulations that discourage cost-
cutting and greater output.
--Measures to reduce the administrative burden on companies
operating under the price code.//
25X1 //These steps are aimed at increasing the profita-
i ity of British firms and enhancing investment in new plant
and equipment. Shirley Williams, secretary of state for prices
and consumer protection, said that in 1975 the net return on
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capital for British industry had fallen to an extraordinarily
low 2 percent, about half the 1974 figure. She predicted the
price control changes would encourage investment. A spokesman
for the Confederation of British Industry disagreed, saying the
proposed changes will not go anywhere near far enough.//
//The price control decision will further test trade
union support for the government's policy of wage restraints.
Union leaders have already warned that a "price explosion" would
undermine union support for the 4.5 percent wage ceiling agreed
to on June 16. The government is gambling that the union leaders
can sell the limited price relaxatio-n to union members.
//The Chinese have not carried out any more
s e ings in the Taiwan Strait area.//
//We have seen no indication of any unusual land,
sea, or air activity in the area since the reported shelling of
an unoccupied island near Kinmen on Saturday.//
//Tlie US embassy in Taipei reports that Chinese
Nationalist officials are not unduly alarmed about the shelling.
The Chinese Nationalists apparently have taken no military action
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//The Australian Labor Party remains divided and
disorganize some seven months after being ousted from office
in a national election. It is not an effective political oppo-
nent for the Liberal-Country government, and its inability to
pull itself together has erased any hope of an early return to
office.//
I //The party's younger and more enlightened members
were the principal casualties of the election rout last December;
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there are now only three Labor members of the House under age
40. Most survivors are aging representatives of traditional Labor
constituencies, party hacks who expend most of their energies
on factional feuding.//
//Former prime minister Whitlam, around whom the
party rallied after his dismissal by the governor general last
November, shows none of his former leadership qualities. Tainted
by a foreign loans scandal that came to the surface after the
election, he is discredited even among his former backers.//
//Whitlam's performance as parliamentary floor
leader has become indifferent, but the Labor Party is unable
to agree on a successor. No one commands sufficient support to
challenge Whitlam, and despite his disgrace, the former prime
minister still uses some of his old political skills to play one
potential successor against another.//
//Labor's only hope appears to be the popular Robert
Hawke, president of the party and the Australian Council of
Trade Unions. Hawke has been the only effective Labor critic of
the Liberal-Country government, but he is not Tet a member of
Parliament.
J Last week, the International Tin Council initiated
another five-year accord designed to stabilize prices and sup-
plies through management of a buffer stock. Bolivia's last-min-
ute notification of its intention to ratify allowed the agree-
ment to take effect provisionally July 1.
Bolivia--the world's second largest tin producer--
fought unsuccessfully for increases in the Council's floor and
ceiling prices, hoping to protect its inefficient, high-cost,
and strike-plagued mining industry. World tin prices are now
well above Bolivia's break-even point of $3.10 per pound, a
fact that presumably weakened La Paz' case. The Bolivians also
were unhappy with the lifting of producer export controls.
Additional wrangling is likely, and the pact will col-
lapse by the end of the first year if the members fail to ratify
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the agreement. Bolivia probably will be the main source of con-
tention, again pressing for a hike in floor and ceiling prices
and for obligatory financial contributions from consumers to the
buffer stock. These contributions are now voluntary.
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