AN OVERVIEW OF THE EAST EUROPEAN SCENE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01082A000500140006-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 9
• Document Creation Date: December 20, 2016
• Document Release Date: July 21, 2006
• Sequence Number: 6
• Publication Date: October 10, 1974
• Content Type: MF

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t
10 October 1974
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Diversity' in East Europe today is to be measured
ILEMOR2 NDUM FOR: All OPR Staffs
SUBJECT An Overview of the East European Scene.
25(1
o
imp y J --
Czechoslovak experience,. and which serve to define and restrain.
rtantl b- the new parameters which derive from the.
Europe,' governed partly of course by the more credible .
routine. But a post-1968 eq-ailibrium has emerged in Eastern
ardinfluencein Eastern Europe has become simpler or more
p
would divert attention from broader policy objectives. This
. ? ? - - -- -,.. ,YOB t-e
resent the Soviet leadership with new preoccupations which
no observable untoward trends or developments which caul
this assumption is no less valid than before. At the moment,
however, with the obvious exception of Yugoslavia, there are
1. Political stability within the Soviet East European
here has always been fragile and as a working hypothesis
domestic_experimentation.
a commitment to a continual rise in the standar of zv t_-t$,
and the central place this now has in the preservation of
domestic political stability and in pursuit of their own..
legitimacy. if domestic instability surfaces the cause. is.
therefore likely to be popular frustration with the pace or
success. Virtually without exception East
European leaderships have acknowledged (and even articulated)
d 1 i
as the prime hope- for growth and stability in :rosL. East
? - -- --- n - ..^_rI - . .,..-.a-
economic relations, which a tew years agU
pre .
r.nmb nat-.ion of consumerism and expanded foreign
levels of cultural permissiveness or pol1Llcai =.Lu. j.,t.
scent most East European economies are in relatively good
rn1w anmestic economic arrangements than *by relative
MORI/CD-F
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assumes a priority earlier reserved for polztica oya In every case the premium is on caution and only the most
measured-'departures, -the wholesale approach to 'economic
reform: of the mid-1960's having given way to a prudent
gradualism. The limits are still narrow and the recent.
leadership changes in Hungary demonstrate an almost-allergic
tare and industrial and managerial expert-se zn ung y
t l 1 It
he product of this nascent consumerism, the precedent being
the Polish upheaval of December 1970 rather than 1968 runaway
,political experiment in Czechoslavakia.
3. For East European leaderships the link between
improved living standards and political stability is at once
a source of some anxiety as well as of leverage vis-a-vis
the Soviet Union. A certain amount of latitude must be
allowed national leadership if the potential of a domestic
economy is to be maximized. In some respects this contradicts
the search for bloc-wide conformity and fidelity to doctrine. .
But the flexibility of management and administration has
produced a diversity of approach to development in Eastern
Europe which the Soviets sezn twilling to tolerate. Thus,
the Polish. leadership vigorously encourages private agricul
H ar
retrenchment . when things have gone too far.
European :leaderships j.n- restraining a.-c. -Lit: LC czLC uvv.i-
be contradictions here in respective perceptions of threat,
a
. i.ng_ on the dimensions o.L future Eas L.-v-:est
promises to complicate the exercise. of Soviet hegemony in
East Europe--nevertheless, there is a .genuine identity of
4 The Soviet policy of detente is universally supported
in East Europe,-albeit with degrees of enthusiasm, because
of the new latitude which it permits East Europe-and its
potential importance for national development there. Depend-
ction -H-
.1 Y
disrupt Soviet-East European relations.
living greater than in. Poland, and nowriere is us-A-4
Turning briefly to tn.. East European states "individually-
-the
Nowhere is : the commitment to improving the standard of
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but or' the whole, this is not something Which threatens to
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to look y~lestwa r"d to ex pedi.te eco= oi:ii c. C~ ,ve1cpme
greater It is essentially this as well as the healthy respect Gierek
has sho-;?n for the church, private agricultu-e, and the
material aspirations of the industrial workers--WhiCrt has
given Poland's "national cor!r:unism" its character during -the
last s four it years. Unverified reports of work stoppages in
.
Gdansk in August, if true, show that the solidarity and
determination of shipyard workers still exists. The regime-
would. make any necessary concession to p,_eventtopen
nrdemon-
strations, but would not eschew a last resort
b. Czechoslovakia
The persistence of a divided but stabilized leadership,
its inability--as well as the lack of any Soviet. inclination-
to resolve a situation of domestic malaise or to tamper with
ate that
di
i
c
n
a safely consolidated party and body politic
4a1Zv
unchanged for the past two to three years. The incapaci-
tated President Svoboda, who ceased long ago to be anything
will be
a
more than a hollow figure of politic l continuity r replaced in the near future but it is unlikely in view of
t ? 4- t, ; w 1 l have an
y
at
f
ut? J t lam
the Long P?" .L iUTA o
major immediate impact upon the profile of. the leadership or
in the direction of policy.
c. Hungary
rs, the
e
the March demotions of Rezso Ny
In Hungary,
's market-oriented economic reform
tr
o
y
un
t of the c
architec (the New Economic Mechanism) and of Gyorgy Aczel, responsible
tion of the limits to
dic
i
a
n
r some
for cultural policy, offe domestic experimentation in Eastern Europe.. Retrenchment in
s back to late 1971 and particularly fro--.n
t
d
i
e
a
ch
wh
the NEI~1, late 1972, was preceded by the rejection of Hungary's concept
the integration
of CEi?A reform during the di scussiors over
-n viirc:arv
rograrn and by par ow ~~ ~ r r__ ,.._-
.
ticu . la.rly in the investment sphere. _ Dev2I.O-??s2ts which
,-_.
preceded the departure of L`~~?ers--notably the gro.?+in di ssatis-
g
l workers with evolvin
i
a
t of industz
faction of a segmen
wage inequities and that of some party officials with expand-
ing managerial author it1? demonstrated the importance of
overarching Conservative dicta defined a-d articulated by a
Coalition of Conservative critics within the Hungarian party
and the Soviet leadership.
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 r Et
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Hr
J
of the 'Hungarian changes may not become clear un _il t11`
T e more negative portent. Of the loade1 Ohio changes
h'--ve n t 1 ate ial ized, haT eve. . T1'_e NE remains essentially
117 i7.2tact, albeit. with a less certain future; the expected .?Jave
of dismissals from the apparat and a resurgent conservative
egos in the nation 's cultural life have failed to materialize;
a--id no evidence has surfaced th~. Ica dar' S political position
has been weakened. Kadar 's willingness to sacrifice elements
off the reform as problems developed and to commit Hungary to
integration and a degree of foreign economic policy coordina-
tion appears to have largely overcome Soviet reservations
about Hungarian loyal ties an i i tentloil3 . In retrospect the
party leader seems to have been the arbiter between rival
elements in the party leadership, and probably acted out of
political acumen rather than viea;ine3S. That the general
cause of reform in Hungary, and in East Europe as a whole,
has suffered a setback is, ho:?wever, a fact. The repercussions
T
~
Congress in
olio concerns `of the'Honecker regime have become more
Its international status more secure, the foreign
ests beyond those of its very existence and survival. This-
d
Q iLl.~ 1
Z
of the Soviet Onion can now a-Ford to pursue national- inter-
objective of the GDR.'s foreign policy.
The' r. utizal~ ty of interests with the Soviet mentor
e
it serves to highlight the evolution of bilateral relations.
'" inn in future between Moscow and Berlin; . at the moment
t"
by arguing for a minimun of bloc-to-bloc dealings and a
in resisting Soviet hege .onic designs ror k,.;L'Lm.-~L
lithe political ratio ale for them. During he pus I- yea
that _. East ..,t' e ELerman s Joined some
~ Pve'1Ce tn
r.-^ cn ?-hare ,
EEC) here is
~:hrouc~h t to the EEin a revised se+ , t; _ngi~There
J-
W'est; appears' to have faded, as the East Germans seek t_o
reseYce their `exceptional economic ties to. the FRG (and
of change. The earlier insistence on a bloc ?approach to the
course continues,-but, here too, there are perceptible signs
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expect cooperation. 'roi.tn -v;estern Lurupu LU
in contrast to its past vie:, that security as to. be Foun
f " ^a 'Iu^h like i t s East iropean allies, this stepchild
 th E s r' ciri;?.Jsph3i'~ ofd de Ente obscure its secar-
L~S r
Z'~ tress f iO es"~ ermany, East Ber.tin con tinue t.S~ _ US
1 to i CT Xt to ''Gael imi tt i self . I.s lit the a t prlr:lar r a.i .. '
C _: A
tO h.e educational and id=.--eologica di . ~sions
ti on is given ,
o sac i a .i.zatvi on p__ocesil ~c
iden t_t ~J is baserd. more on rejection than on a coherent
c m _cep,t of nationhood. Leadership insecurity and.
l form the East Cerman c^arac.tei ~or some
ambivalence pail -_
time to come.
e . Romania
ship jai th the- prospect of a serious C- Ines,v prey nG__ _
ship in recent months,. Bu?t. new
tE zl~- -_S, ~- 1971 .,7hen
~? ` 19!. have not approached the dangerous level of sL':_V`--'.e..i
Ceaucescu journeyec? to Peking and alarmed the Soviet leader-
it
rv"'.L''ly ay as Ili Ln.= Z' i..., __
or both Sides may ha e e?;acerb ata d an alrear y uneasy-
The Romanian challenge. to Soviet. hegemony remains as
thatand there are ii?diCa ~:_^ s fleither
Eastern Europe:
and investment in Soviet raga mate: ials .
CM-'A,' e .g. through a belated join_ng of
e_'.pt..).[L Ci.13_1111tyJ-ii?_....~.. ?---- - ---- -
West, which in turn has contributed to the accumulation of a
huge debt to the West and to the formation of new ties with
the Investment Bank
lack, have contributed to a cozt-LIlu_r.gir._.
.meaningful reform and. consum?_-L L3, !. 111 7= .~~~..~~....1 -
to boost.
this policy. Largely bacause of
to Lu. n L.V talc c~---
'- S,..7 and the rest Of and i' continues to maintain
on t_t__.. U i ,i a M
econo: zcasly as ti,e~ P _ t
oil reserves it was the fir3~L- country (apart `-om-Yugoslavia)
7
Roma_zi 1_
as ol+ `ically. Blessed v th. its own
a _,n'-irues to be unique in Easter n urope,
-emu ,
C S? bas S. Whatever the pucca 1L' 50J_ zw_
G
~a b y rn
~.-. y . r
1_, on e ?ritl ci? `~ z 7 t .
.
of tPa .. .
t
r
n k-ra~T?~.e t. _.11i..ir' cc
v~Vil~.J?3 s .L ,.. "mil"? 111 TL 'Si -'Ir
S5t c roti p of ~ i
1 to hold an c lts: ' -1t: e par "G1' Co ',rroSS~i the
hopes C.Iff a base of influenceand expanding it
to other areas of the country'. The effort itself a?nears
d
?
ar_l e
tt ; si- -o_ t of the Soviets has a
t
T-1-t-0 '~ tr ia 'tt t h a
an," L,i?dPrl:?in^_.S t71>> pu:Jllc claim. Of 7 ~t "! .5 r Sp r in y , _ ..
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11:1 ve agreed.
C
E roo. an
, Face t
i2 step to .G'1h.Cf1 Snis ?, but C not all
t t
_LG.._r
issue ' continues `CC be ,ihe-char obllga t10n assLL' IeLl L
integration program are to be incorporated into state plans,
ou"11-r 1 e^
states at the mc' en appears to }3e Over LiLle cam:.-L.=-nom. ea
1 ~..oD,.. _''.3 i l al for. i L '3 t...-ra measures
as ag.r Y?[~'.t `on ~1^i. inLJ.. ,'7. le a year ago. A major '~
'
i.:-n. no
has nothing
doubt v poi; cal sup o c_ his ?ice" tenants for
e uch _ a policy.
i,tu3 ti l aY-~ t~ 7~SL" n r L~
Since the ado iC~:r! ot- .. c1 eI { `I
;irogram in 1971 th? tsrra-ion issue his been
c; Vaticr.
b d measures
Cia~Ol iri:"i Zet. to a. cons- ~d .i,..i.era.,._ G._uise2_ With the
agreed upon in the p:'ogra-a S7e`7 ? nnin g to be iR-pleren'Ge d, most
issues are now micro, e. g,. , the scope of operations of an
association or the :,illi ngness to inves 4 in a joint project.
The p i mars difference bet.~-%een the USSR and some East European
~s s of tf'a
~7, " n~eerrat on" accepted in principle the Soviets
their "peace o Pensive, " especially in Eu_ D.&z.
issues because a qulescen Eastern
stringently enforced joint planning. Unless an East' European
COQ itr (e. g. RZomaiiia) appec4s to be successfully distancing
it self from CE'?Ly, howev?=r, it is unlikely that they would be
willing- `o ,Tnake a major issue o ` this or of other integration
_r% --astral to
n-; i - *rhm! -r.p-r?tri n a Prot lOm- Whila"tthe' 'P cal,
that r for g. i with the West.
-prices--including that- Low gold--~.n iL-s trade-,
C.LOE:a. a `r'!1 Lssi ss , ~.> y ~- - - - r
+ d raw materials to Eastern- Europa 1S of course: the
=fuel Z'i
jt. / '' ur =. - O L! Le u5 lJr :..
tLCrea goddd )! .the co...o M2.C - T Lit 2 _ `__-
tL?a% for ' i ~n Europ e J _ : IG_ enp. i a f
Eastern ...oa h a^ ^c -TT
f ue 1 cnLt r?
7i1Ga ~s t notably oil--far e e di ng
as of coMOU~ E-z-1-a ~ 'c -these t .. ,,. r .... ~.. fc bc-?sv- all I:ianul1c1C-
I end with' the increase in world
r, n
economic and political prop e .. - -- L -
'- --- 1~ :; T1 aY,.a ~a~1 ern Furore, recent international
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issue i ch .'.ry l u?! tii a'tely a e be '.7e ~.:E:'.1.,..-ed at the top
ra
r' l '? v 1~r le LE Iz act on so 7i0-t-1,1 st European tde
bec--~i~. g-i.'-erm contractual and arra -;. i'1. r, the r`iay
~. s_ e . o ~ tori .- ~_
urices are set in Ci'r,'.! t~~ naS -I4. . _ _. five-yeplan - c_ ?t.., 71, tp.r._ 'xn..~ plan -, 1 -~ ~ :- 3 to h _x.. e r ,'_e negatia ms' t~.ri'c'1
r ... L. ye ~~. ~ and ~:.~4~a Nri ` ' ..~s ~.._ city ,~_.e.,.t with
rec=a. :tiori d -or cc trends taken in 'i o acc7L?T._" There or.- ,
theme single, Ov 3 :%(!?1? ^, quest.ic-,n ~.oom.t= in Sovie E~1. st
r, r J .; economic 'Y':e J.- fns 1S. who ?-11 be the price o
l -u d ring the next five year p l a .7. and, if i is
Movie of
:;harol;r, raised, how wi.11 Eastern Europe pay I` - bill? To
date there are no good indications of vi-hat". position the USSR
will take on this question, but but there is evidence that the
ll ' a. re ~_ at this i. s a d7, fficu1t, co-1p! icated
Soviets are ;`se _.
industries. i?iore recently the Soviets have led the drive
to develop 3., t ?.t4...i G-C:1 ' oc..,.. and other rte-`- i l e based
_ .L _a ~.v ~Cal _
beginning in the early 1950's, which enabled Eastern Europe
a '1 , heavy 'I:. the oil'
develop eaJ , du5t_ri:7.l _ .C.'=tas:v and then of the_ sup-plied e
the Soviet n' h w' L n "u e
as t, Sov :iot insisted tP stv_ ~trQp._
here is a certain irony in this situation, for it-
political level,
Soviets grill be very -i eluctant to provoke cries of ex?lrota'
wall as their great. stake in East European stability, the
-solving their mutual fuel problems. For these reasons, as
East and West Europeans.to look to joint cooperation in
Europe would be evident and could provide an impetus for
the parallel be t teen th? situation in Eastern and r':-_ stern
emulating OPEC by putting the screws to its major customers,
price trends ,'Ti th relative impunity, should it be seen as
~..~.'' '~. .."tl~ _..1
r. t:. ' -ns 'tt_'rJ socialism., Wh e
states to an r 1OTl--s`.J i~. ~l S- ,:>
elsewh,are, as a marginal supplier, the USSR Can follow world
nation within C_ _ ~ 'iL a.-Id > d have touted CE t'i.f-s :pLr~.- --as a
mode for the world ;'I -L i? would attract 4 other sow".?ialist
for socialist integration foreign economic. pol:Lcy Coordi-
. tion by sharply jacking ua prices Or to accept tee- -pOlz t3 cal
11, At the ,riat:a tint" he;'iever, the, Se cot oil industry-
to C:liL~nn l oil--all" other cor Gdi ies --' o lucrative (Western
for export is curtailed there will be an even greater temptation
has been increasingly running into proble