DR GIOVANNI AGNELLI -(SANITIZED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70S00385R000200010006-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: September 13, 2012
• Sequence Number: 6
• Content Type: BIO

Declassified in Part - Sanitized Copy Approved for Release 2012/09/13: CIA-RDP70500385R000200010006-3
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411
TAB C
Zeon(*njc Developments in the USSR end ZasternlCuraim
In 1966 and 1967 economic performance in both the USSR and
Eastern Europe has been good. Meonomic growth has been high and
above that of Western &rape. While the pace of industrial out-
put has quickened, the recent good showing rests heavily on two
exceptionally productive agricultural years.
In the MR, the growth of the economy has, bepefited the
consumer and the military. The production of weapons appears to
be increasing markedly, at the expense of investment in agricul.
ture and industry. This priority- shift, however, may be only
temporary and there apparently hos not been a firm decision on
long range allocation priorities.
Although the people's appetite for Western type consumer
goods is growing, the USSR will not enter the "automobile age"
for many years. In 3.970 the USSR will have half as many auto..
mobiles in relation to population as Greece does at present.
But not Eastern Enropean countries are better off. East Germany
and Czechoslovakia are far ahead of the USSR, although they are
two decades behind Western Enrope. As automobile ownership spreads
in these countries popular demand for more automobiles is likely to
grow even stronger. In turn, rising living standards and expectetiopw are bound to complicate the task of governing for the Communist
regimes.
Economic Develoents in Western Enrope
The growth of the Western Enropean economies this year is the
slowest in nearly a decade. West Germany has been in an economic
recession and has imported less from its trade partners some of
which (like the Netherlands and Belgium) have been hurt considerably.
The restrictive measures undertaken to support the pound sterling
during the past two years have kept production from rising in the UK.
There has been a slight slowdown in the growth of the French economy.
Declassified in Part - Sanitized Copy Approved for Release 2012/09/13: CIA-RDP70500385R000200010006-3
Declassified in Part- Sanitized Copy Approved forRelease2012/09/13 : CIA-RDP70500385R000200010006-3
,L
The Ws devaluation was the outcome of long standing
weakness in the competitive position of the British economy.
For years every economic expansion in Britain was quickly halted
by a balance of payments crisis and in the past two years there
was a balance of payments deficit even thou the economy did not
expand. The Middle East 'crisis made matters worse but was not the
primary factor leading to the devaluation.
The Current Italian Scene
The Italian political situation has been generally stable
since the Wenri Socialists entered the government coalition in
December 1963. Premier Moo's cabinet, Aida is based on a coal-
tion of Christian Democratic Unified Socialist/ and small left.
center Republican parties, ha:Ls been in power since February 1966,
and is expected to last until the national parliamentary election
tentatively scheduled for 26 May 1968. The Italian Communist
Party (PCI) retains the vote of about one-quarter of the Italian
electorate, but is politically isolated. The principal weakness
of the government is the vulnerAbility of the Socialists to the
criticism that, as members of 4 coalition, they have not promoted
enough progress in social reform.
The Italian economy is About the only one in Europe which
has been booming recently. Industrial production is expected to
increase about 10% in 1967, and unemployment has dropped to the
lowest level in years. In spite of the boom, prices and costs
have risen more slowly in Italy than in other industrial countries
and there is a surplus in the balance of payments.
Possible 44uestions for Mr. ...4"gnelli
Sterling devaluation -- Is 14% enough to give much of a boost
to British exports? What will be its effects on British trade with
Italy and other Common Market countries?
102-
Declassified in Part - Sanitized Copy Approved for Release 2012/09/13: CIA-RDP70500385R000200010006-3