WRITTEN BRIEFING FOR UNDER SECRETARY LIONEL OLMER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP02-06156R000100100001-1
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: April 30, 2012
• Sequence Number: 1
• Publication Date: September 21, 1982
• Content Type: MEMO

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Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
Office of Intelligence
Liaison j
Department of Commerce ~
Si1''TECT: Written Briefing for Under Secretary
Lionel Olmer
Attached are the economic sections for
ilndersecretary Olmer's trip to Munich. We
have deleted the political section due to
}he fluidity of the situation. The coverage
in our daily publication should suffice to
:seep him up to date on the Bonn political
scene.
Acting Director
att:
as stated
21 September 1982
EURA
Office of European Analysis
Directorate of Intelligence
STAT
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 Declassified in Part -Sanitized Copy Approved for Release 2012/04/30 :CIA-RDP02-061568000100100001-1
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Bob,
The attached was done for Lionel Olmer's
trip to Munich this Friday. Dave would like
to have an approved co~~or Olmer's brief-
ing book tomvrrew
STAT
DO NOT use this Corm as a Ri:CORD of approvals. concurrences, disposals,
clearances, and similar actions
FROM: (Name, org. symbol, Agency/Post)
Room No.-Bldg. j
Phone No.
OPTIONAL FORM 41 (Rtv. 7 76) ~
Mse-ib~ bar GSA ~
FPMR (41 CFiU 101-11.206 ~
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 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
STAT
West Germany: Economic Trends and Trade with the Soviet Bloc
Economic Situation
The West German economic situation presents a mixed
picture: better in many repects than that of any other West
European country, but poor enough to have been a political
liability to the Schmidt government. Inflation will fall below
five percent soon and the Bundesbank has already eased up on
January-March 1980, the last quarter of significant growth.
On the other hand, unemployment is at levels not seen since
the late 1940s with no hope of major improvement in the near
term. Business sentiment is low and industrial production
flat. The volume of orders for capital and consumer goods is
running eight percent below 1981 levels. These gloomy data
presage continued stagnation in production and continued delay in
the economic upturn West Germany has been waiting for since
surplus of $2 to $4 billion in 1982.
monetary policy, allowing interest rates to fall. The value of
exports through July is up nearly 12 percent over. 198.1 compared
to only four percent for imports. The terms of trade (export
versus import prices) continue to move strongly in West Germany's
favor. The current account appears headed for a comfortable
Most forecasters expect real GNP to advance less than one
percent in 1982. For 1983, the West German Economics Ministry
reportedly has lowered its working projection for real GNP from
3.0 to 1.5-2.0 percent, in line with some private forecasters.
All forecasts for this year and next hinge on when an upsurge in
STAT
STAT
STAT
-1- FIIR MR~_lnn4~
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consumer spending and investment will come; we expect the
recovery to begin by the end of the year.
Foreign demand, which has been a sustaining factor during
the domestic slump, now also is flagging. Weakening demand in
the OPEC countries and the~con~i~ing US-European recession are
beginning to sh1w up i nl~West Berman export~,~i=e-f-e-rm-a~nc~' The
performance of the de tsche mark is problematic as well. Its
recent strength against uropean currencies is cutting somewhat
into West Germany's export competitiveness. On the other hand,
its weakness against the sur ising US dollar has put .an end
temporarily to further declines in West German interest rates.
STAT
STAT
STAT
- - STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
? ..?
STAT
West Germany: Key Economic Indicators
(Percentage Change)
1
980 1981
19821
Real GNP
1.8 -0,3
0.4
Industrial Output
.0 -2,1
-0.1
Consumer Price Inflation
5.5 5.9
4.8
Real Exports
6.0 8.9
5.7
Real Imports.
5.9 2.1
3.1
Trade Balance
(billion US$) ~
4.9 12,3
~2.0
Current Account Balance
(billion US$) -1
6.2 -7.3
3.0
Unemployment (thousands) 891 1,281 1,817
STAT
Ties with the Soviet Bloc
West Germany is by far the East Bloc's largest Western
trading partner. However, from the West German perspective, the
East accounts for only 6 to 7 percent of total West German trade,
about the size of West German trade with the United States. The
USSR is West Germany's leading eastern trade partner, accounting
for about 2 percent of West German exports and imports, followed
by East Germany. (Officially, of course, West Germany still
treats goods exchanged with East Germany as a special category of
internal trade.) The Soviet and Bloc shares of West German trade
have receded from their mid-seventies peak as Communist countries
1 CIA forecast.
-3- STAT
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have had difficulty acquiring hard currency to pay for imports
and have diverted some hard currency away from purchases of
investment goods and into agricultural products. West German
exports therefore have been particularly hard hit. Trade with
Poland and Romania is down most markedly.
West German exports to the Bloc are dominated by machinery
and steel (particularly steel pipe for the USSR). Energy stands
out on the import side -- especially natural gas from the USSR,
which now accounts for one-fifth of total gas imports.
In other economic areas the Bloc drops sharply in
importance, although West Germany does have substantial loans
outstanding to Eastern Europe. Trade in services with the Bloc
is less than one-fifth that with the United States. Direct
investment is negligible in both directions.
STAT
STAT
STAT
STAT
STAT
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 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
STAT
West Germany: Trade With Eastern Europe
(Billion US$)
Partner
1975
1981
Exports
Imports
Expo
rts Imports
Worl
Ea
d
st Bloc
91.7
8.1
(8.8% Share)
76.3
4.6
(6% Share)
178.
10.
(5.6% Sha
6 166.6
1 10.4
re) (6.2% share)
East Germany
1.6
1.4
2.
5
2,7
Poland
1,3
,6
1.
0
,9
Hungary
.6 -
.4
1.
2 ~
,9
Czechoslovakia
.7
.5
.
9
,9
Romania
.7
,4
,
7
,7
Bulgaria
,4
.1
.
5
,2
USSR
2.8
1.3
3.
4
4.1
STAT
STAT
STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1
Distribution:
1 - DDI Registry
1 - Executive Director
1-NIO
1 - OD/EURA
2 - EURA Production Staff
4 - OCO/IDCD/CB
1 - CD/WE
1 - Division File
1 - Branch File
1 - Author
DDI/EURA/WE/GN/~
27 September 1982
STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP02-061568000100100001-1