NATIONAL INTELLIGENCE DAILY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005301368
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2009
• Case Number: F-2007-00571
• Publication Date: June 13, 1990

APPROVED FOR RELEASE DATE:
09-01-2009
CPAS NID 9Q-137JX
(b)(1)
(b)(3)
 USSR: Gorbachev Sells the Summit to Supreme Soviet
West Germany: Growing Optimism on Rapid Unification
Notes USSR: Baltic Leaders Upbeat After Meeting Gorbachev
: Russian Republic Declares Sovereignty
Romania: Police Break Up Bucharest Demonstration
Hong Kong: Unions Protest Foreign Labor
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 Moscow Edging Toward Accommodation on Germany in NATO
Gorbachev yesterday called again for a united Germany to have an "associative"
membership in both alliances during the transition to a new security order, but he added
several new wrinkles. He suggested that West German forces could remain integrated in
the NATO military command, East German forces be subordinate to the new German
government, and Soviet forces remain on East German territory during the transition. He
urged NATO to match changes mandated at the recent Warsaw Pact summit, calling in
particular for the meeting of NATO heads of state in July to revise the Alliance's military
doctrine.
Gorbachev's new twist on dual membership indicates Moscow is moving toward accepting a
united Germany in NATO. It suggests he perceives the talks Monday between Foreign
Ministers Genscher and Shevardnadze and his own discussions last week with Prime
Minister Thatcher as laying the groundwork for a viable compromise.
The Soviet President carefully avoided setting a timetable for the "transition" that would
imply a deadline for withdrawal of Soviet forces. The issue may be a sticking point for Bonn,
but he probably regards favorable consideration of Soviet interests at the NATO summit and
completion of a declaration on the "rapprochement" between the alliances as key steps in
setting a time frame. Even if the West rejects his proposal for purely political ties between
Germany and the Pact, Gorbachev may believe that he can present German membership in
NATO as safeguarding Soviet interests if NATO makes a formal commitment to change its
military doctrine, German national forces are limited, and a hefty economic package is
agreed.
Moscow probably believes that it has made progress toward limiting German forces that
could clear the way for Gorbachev's proposed compromise on German NATO membership.
The Soviets have made it clear at the CFE talks and in numerous contacts with Bonn that
they want the military personnel of a unified Germany capped at about 50 percent of current
strength. The Soviets and Germans already have been discussing how to reduce German
manpower in CFE and may agree on an overall personnel limit for Central Europe or
restrictions on the number of troops any single country in that region could maintain.
Gorbachev undoubtedly wants a politically binding commitment to pursue these cuts at the
ongoing negotiations in Vienna.
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from verbal support of perestroyka to action.
USSR Gorbachev Sells the Summit to Supreme Soviet
Speaking before the Supreme Soviet yesterday, President Gorbachev
portrayed the Washington summit as a major success; as he grapples
with mounting domestic crises and is unable to show near-term
economic payoffs, however, his foreign policy initiatives are likely to be a
declining political asset. Gorbachev emphasized that the US leadership
He credited President Bush personally with much of the summit's
success. He specifically cited the US President's "courage" on the
trade accord and his "balanced, responsible approach to the most
profound, revolutionary changes in the Soviet Union." Gorbachev
went to considerable lengths to show the Supreme Soviet that he was
delivering the economic goods:
- He catalogued and explained the economic agreements in
great detail, in an obvious effort to convince his audience of
their near-term benefits.
He expressed personal gratitude to President Bush for his
handling of the trade agreement, while taking pains to suggest
directly linked to the trade pact.
Gorbachev defended agreements reached on START and other arms
control issues, in part to build support for their ratification by the
Supreme Soviet. He termed START a "coordinated balance of
concessions and interests" and struck out at treaty critics:
He emphasized that the cruise missile provisions, particularly
on range and on SLCM numbers, represented important and
hard.-won concessions from the US.
- On the issue of noneircumvention and inclusion of Soviet
naval bombers, Gorbachev demonstrated his toughness by
declaring US positions unacceptable. In doing, so he made
future compromise on his part more difficult.
Comment: Gorbachev's foreign policy successes seem to be a
declining asset. While he was in the US,
ordinary Soviets seemed more interested in Soviet food
ss o-esa and nd in Boris Yel'tsin's struggle to become president of the
Russian Republic than in US-Soviet summitry. The questions
Gorbachev got at the end of his report to the Supreme Soviet also
suggest that the Soviet public's main interest in foreign nolicv is how
13 June 1990
 Electoral Considerations for an All-German Election
West Germany's system of modified proportional representation
requires parties to win 5 percent of the national vote or direct
elections in three districts to gain a seat in parliament. The 5-percent
rule, which does not exist in East Germany, discourages the
splintering of the political system through the rise of small often
extremist parties.
Although a united Germany probably will adopt West German
electoral laws intact, Chancellor Kohl might see political advantages
in changing the 5-percent rule for the first all-German vote. East
Germany's German Social Union, an ally of his Christian Democrats,
almost certainly will fall well below 5 percent. Kohl also may want to
keep several leftwing parties in East Germany alive so that they can
draw votes from the Social Democrats,
Kohl would face charges of manipulation if he proposed a threshold
of 2 or 3 percent for a united Germany. He might try to suspend the
5-percent rule in eastern Germany, however, as East German Prime
Minister de Maiziere has requested. This course would be easier to
follow if the December or January vote takes the form of separate
elections in the two Germanys, with East German deputies later
entering a united parliament.
Rk
 NATO and Group of Seven summits in July that meet at least some of
WEST GERMANY: Growing Optimism on Rapid Unification
The West Germans, increasingly optimistic Moscow can be persuaded to
accept a united Germany in NATO, probably will press for actions at the
West German Foreign Minister Genschcr last week assured
Chancellor Kohl that the Soviets are prepared to accept a united
Germany in a changed NATO and that the two-plus-four talks could
conclude in September, according to the West German news
magazine Der Spiegel. Yesterday the Chancellor rejected Gorbachev's
proposal for associate membership for Germany in both alliances but
members.
At the summit Kohl reportedly will press for changes in NATO
strategy and will urge the US and the EC to reply positively to
Moscow's call for $20 billion in economic assistance. Kohl is
confident East Germany will accede under Article 23 of the West
German Constitution by the fall and that unity will occur during or
before elections in both Germanys. Yesterday the East German
Christian Democratic legislative caucus called for the first time for
The West German Social Democrats (SPD) now claim to be satisfied
with the terms of the economic and monetary union.
Comment: The West Germans clearly believe a two-plus-four
compromise on a united Germany in NATO is in the works, and,
even though Kohl rejected dual membership, Gorbachev's
announcement probably will reinforce their optimism. Kohl's
statement on nonaggression pacts did not respond to any Gorbachev
proposal; it probably was designed to show Moscow that Bonn
appreciates the need for new CSCE-based security arrangements and
to keep the door open for discussion.
At the July summit the West Germans are likely to push for a NATO
commitment to changes in military doctrine and expanded ties to the
Warsaw Pact. They will urge a G-7 commitment to generous Western
aid for Gorbachev. Kohl and Genscher will argue that Gorbachev
needs to bring a Western offering to the July party congress. Kohl,
meanwhile, wants to improve his own electoral prospects and
probably expects that a two-plus-four endorsement of a unified
German
position.
 USSR: Gorbachev Managing Party Congress Preparations
President Gorbachev appears firmly in control of preparations for the
28th Party Congress that opens on 2 July; he is trying to accommodate
demands for faster reform of the party and for a separate Russian
Communist Party.
party functionaries probably
will account for 40 percent of the 4,700 delegates. Leaders of the
radical reform group Democratic Platform expect to have only 10 to
20 percent of the seats, despite their widespread support among the
rank and file. They should have greater influence at the Russian
Republic party conference next week.
Last week moderate Politburo member Vadim Medvedev said a
Central Committee commission has radically revised the much-
maligned draft CPSU platform making it agree with many DP planks.
He asserted that the revised platform meets the DP demand that the
CPSU transform itself into a parliamentary party, it is not clear
whether the party will renounce its claim to a vanguard role. The
draft retains the principle of democratic centralism but offers a more
flexible interpretation of it. Last Saturday Gorbachev met with the
Central Committee's Russian Bureau to endorse forming a separate
Russian Communist Party. He said it could elect its own leadership at
CPSU congress.
Comment: Sharp divisions between the elected delegates will ensure
fireworks at the congress, but Gorbachev probably is counting on the
large contingent of party officials concerned about protecting their
careers to help him shape its outcome. The absence of broad party
support for the hardliners will reduce their influence at the congress.
The changes in the platform suggest Gorbachev intends to institute
reforms to restore the party's flagging credibility and address enough
of the radicals' concerns to prevent large-scale defections. He is
unlikely to satisfy DP demands such as dismantling much of the party
Because a majority of the congress delegates will attend next week's
Russian party conference, Gorbachev probably believes he can install
a Russian party leadership that will not defy central party control.
Gorbachev badly misjudged his ability to get the new Russian
legislature to reject Yel'tsin as chairman, and over time the Russian
party is increasingly likely to develop its own agenda.
 one, rw#_
Lithuania: Coping With the Embargo
Moscow's eight-week-old embargo has significantly disrupted the Lithuanian economy, but
consumers and workers are coping well, treating it as an extreme manifestation of perennial
shortages. The biggest problem remains the shortage of fuel and energy supplies.
Living standards have declined, but severe hardships have been avoided:
- Hot water and natural gas for cooking in urban homes are not always available, and
brownouts have occurred. Rural areas, however, have adequate supplies of bottled
gas.
-Bus service has been cut by a third, and the Lithuanian government has banned
gasoline sales for private automobiles.
- Supplies of food and consumer goods appear adequate; rationing is restricted to items
in short supply throughout the USSR such as sugar.
-Highway border crossings are not carefully monitored, according to recent
US Government travelers, and border guards reportedly turn a blind eye to embargo
running or are easily bribed.
Only a few industrial plants have closed, but most enterprises are operating at reduced levels:
- The list of nonenergy embargoed items such as steel and plastics remains small, and
supplies reportedly continue to enter.
- As much as 5 percent of the labor force has been laid odor sent on early vacation, but
a much larger share is underemployed.
- Lithuanian officials are trying to get embargoed inputs from other republics and
foreign sources, but their efforts are hampered by Moscow's selective denial of access
to transportation routes entering the republic and to hard currency.
 USSR: Baltic Leaders Upbeat After Meeting Gorbachev
At a press conference after the meeting yesterday of the heads of the
Baltic republics and President Gorbachev, Lithuanian President
Landsbergis said he would not detail the discussion before consulting
his parliament. He and Latvian President Gorbunovs said Gorbachev
continued to press them to freeze their independence declarations,
but they and other officials provided
journalists with optimistic characterizations of the meeting and
Gorbachev's "new attitude." Speaking to the Supreme Soviet earlier
yesterday, Gorbachev repeated his preconditions to talks and warned
that. although he was committed to a political solution, he might have
to opt for tougher measures.
Comment: The Baltic leaders apparently see some give in Gorbachev's
position even though his publicized remarks suggest he is holding
firm. Gorbachev had probably agreed to meet the Balts to test their
policies
USSR: Russian Republic Declares Sovereigns)
The declaration of republic sovereignty that the Russian Republic
(RSFSR) Congress passed yesterday, although it still lacks the force
of law, will be the basis for a new republic constitution and for
renegotiation of the treaty binding the republic to the union. It asserts
the primacy of RSFSR laws over national legislation and reaffirms
the republic's right to secede, but it states the republic intends to
remain part of a renewed union. Although the declaration passed
virtually unanimously, the legislature rejected a provision that would
have given it legal force.
Comment: The overwhelming support for the declaration presages
battles with Moscow, particularly over the republic's efforts to take
control of its economy. If the center attempts to curtail the republic's
push toward economic and political autonomy or if the new union
treaty fails to meet the RSFSR's expectations, the republic may move
to give its declaration legal teeth. Moscow is not likely to make more
than a verbal response unless its authority is directly challenged, but
the declaration puts more pressure on President Gorbachev to
develop a new framework for the federation
 political role for NATO are in keeping with her efforts to maintain
US ties to Europe. Speaking to a journalist in Kiev last weekend,
Thatcher raised the possibilities of a free trade zone for the US,
Canada, and the EC and of linking the dollar to the European
Monetary System. She reiterated her support for a more political
NATO in an attempt to assuage Soviet fears about a strong Western
Alliance that includes a united Germany.
Comment: Thatcher probably was speaking off the cuff. She continues
to worry that the EC drive toward integration will make Europe more
protectionist and probably believes a greater economic role for
NATO could help deflect Soviet criticism of NATO's military
posture. Other West Europeans probably will see her remarks as an
attempt to undermine prospects for EC monetary and political union
and a greater say in NATO. The Foreign Office is likely to try to
dissuade Thatcher from the free-trade-zone idea for fear of sparking
disagreements at next month's NATO summit.
Riot police broke up the seven-week-long antiregime demonstration
and the monthlong hunger strike in Bucharest central square before
dawn this morning, according to accounts given to journalists in the
city. The police also dismantled the tent city in which the strikers had
been camping. The protesters had been demanding the removal of
officials associated with Ceausescu's deposed regime.
Comment: The police move indicates President Iliescu has taken his
National Salvation Front's landslide election victory last weekend as
a mandate to use Ceausescu-like tactics to maintain public order.
Opposition leaders are likely to react in kind and attempt to mobilize
greater resistance to the government
 TO-WIM04--
 HONG KONG: Unions Protest Foreign Labor
About 1,000 members of the Federation of Trade Unions
demonstrated on Sunday against a government plan to import about
15,000 more craftsmen, supervisors, and construction workers from
China, the Philipp.ine;~, and Thailand. The trade unionists fear losing
their bargaining power with employers and slower wage increases in
Hong Kong's inflationary economy; retail prices rose about 10 percent
last year. According to government statistics, job vacancies rose to
about 85,000 last year, in part because of emigration driven by fear of
the territory's return to Chinese control in 1997.
Comment: By allowing more foreign workers, the government hopes
to ease the chronic labor shortage and sluggish economic growth;
GDP grew only 2.5 percent last year. Staffing difficulties and rising
wages have fueled inflation, lowering the competitiveness of Hong
Kong's exports and causing firms to move production facilities to
other countries. The government probably will face increasingly
strong opposition to foreign workers after the legislative election next
year; unions are politicizing the issue by joining with Hong Kong's
'T0
13 June 1990
 Chances are slightly better than even that Newfoundland's legislature
will approve the Meech Lake accord by the deadline on 23 June.
Although Premier Clyde Wells opposes the accord, he has pledged not
to campaign against it and has invited Prime Minister Mulroney and
other leaders who favor it to address the legislature. Wells' Liberals
hold 31 seats and the Conservatives, who solidly back Meech, hold
19; the position of the two independents is unclear. The support
of the Premiers of Manitoba and New Brunswick virtually ensures
legislative approval of the accord in those holdout provinces
Comment: Newfoundland's legislators traditionally toe the line, but
much will depend on Wells' behind-the-scenes activity on the eve
of the vote. Although he wants to preserve his image as a crusader
against the accord and for equal rights among the provinces, he
may offer to tone down his opposition in exchange for economic
concessions from Ottawa and Quebec. Enough Liberal politicians
probably will join the Conservatives to approve the accord by a
narrow majority; they are reluctant to shoulder the blame for the
political turmoil that would follow a defeat and fear that the accord's
failure would hurt the province's economy
 M=
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 officials criminally liable for interfering in journalists' work.. .
allows publications by individuals for first time .. . regime might
still find ways to stifle newspapers.
-Soviet Premier Ryzhkov presented case for government's
economic program at meeting Monday of republic, local party
leaders ... using delay in Supreme Soviet debt now set for
today, to lobby for support, counter criticism.
-I:vestii}a reports Soviet industrial production through May about
1 percent lower than last year ... incomes increasing twice as fast
as goods, fueling inflation ... 11-percent drop in Lithuanian
production shows embargo having an effect.
Europe - Czechoslovak President Havel to keep Calfa as Prime Minister .. .
the Slovak and former Communist has won public respect for
loyalty to Havel, reforms ... Slovaks will press for other important
unity, probably unhappy at Vatican support for Christian leader
Middle East -Lebanon's Maronite Patriarch Sfayr met for first time with
President Harawi, Prime Minister Huss yesterday ... Sfayr urging
Awn ... might be mediating between Awn, Harawi.
- Iran's Consultative Assembly yesterday reelected hardliner Mehdi
Karubi as Speaker for another year.. . his two deputies also
reinstated ... shows hardliners continue to dominate the
Assembly.
ground, rebels probably will up military pressure.
Doe resign before cease-fire ... parties unlikely to find common
Africa -Peace talks begun yesterday between Liberian Government, rebels
already stalemated ... government rejects rebel demand President