WEEKLY SUMMARY OFFICE OF CURRENT INTELLIGENCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300010001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 21, 2016
• Document Release Date: October 23, 2008
• Sequence Number: 1
• Publication Date: November 29, 1963
• Content Type: SUMMARY

29 November 1963
OCI No, 0308/63
Copy No
WEEKLY SUMMARY
DIA review
completed.
State Dept. review completed.
CENTRAL INTELLIGENCE AGENCY
SECRET
downgrading and declassification
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OFFICE OF CURRENT INTELLIGENCE
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(Information as of 1200 EST, 27 November 1963)
CUBANS APPREHENSIVE OVER POSSIBLE US POLICY CHANGE
Fear that President Kennedy's assassination will
bring a more "aggressive" US policy was reflected
in speeches by Fidel Castro and Che Guevara.
SOVIET STANDDOWN ON BERLIN AUTOBAHN HARASSMENT
The USSR's failure since the 4-5 November incident
to stop Allied convoys of nondismountable size and
its statements of 16 and 21 November suggest that
Moscow has decided to settle for a standoff in the
autobahn dispute at least for the present.
EASTERN EUROPE PREPARES FOR HARD WINTER
The regimes there hope to prevent a recurrence of
the widespread discontent and the economic disloca-
tions which resulted from last year's severe winter.
PEIPING'S ECONOMIC RELATIONS WITH NON-COMMUNIST ASIA 4
Their gradually increasing trade in non-Communist
Asia provides foreign exchange the Chinese need to
buy grain. Their aid activities in the area will
probably remain at a moderate level as long as the
grain imports continue.
ASIA-AFRICA
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ASIA-AFRICA (continued) Page
HIGH LEVEL OF VIET CONG ACTIVITY IN SOUTH VIETNAM 6
Communist military action has become more effective
and widespread in recent weeks, thereby increasing
pressure on South Vietnam's new rulers to produce
some dramatic achievement.
AREA NOTE
On Laos
SYRIAN AND IRAQI REGIMES TRYING TO STABILIZE
Relatively moderate elements in both the Baghdad
and the Damascus regimes seem anxious to reach an
accommodation with their various internal factions
as well as between the two governments, but extrem-
ist pressures are still strong.
CONGOLESE EXPEL SOVIET DIPLOMATS
Soviet representatives in Leopoldville had been
assisting a radical exile group plotting against
Premier Adoula from neighboring Brazzaville.
MALAISE IN MALI
The government of President Modibo Keita is faced
with mounting criticism from powerful local polit-
ical figures, dissidence among nomads, and a des-
perate foreign exchange shortage.
THE DE GAULLE - ERHARD TALKS
The 21-22 November talks seem to have established
a good working relationship between the two lead-
ers and clarified certain aspects of French and
West German policies but produced few decisions.
WESTERN EUROPE'S STEEL PROBLEM
A meeting next week of the Coal-Steel Community's
Council promises to have far-reaching implications
for the CSC's future as well as for the outcome of
international tariff negotiations in the spring.
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EUROPE (continued)
AREA NOTE
On Italy
WESTERN HEMISPHERE
AREA NOTES
On Brazil and Venezuela
13,14
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CUBANS APPREHENSIVE OVER POSSIBLE US POLICY CHANGE
Cuban leaders are appre-
hensive that President Kennedy's
assassination will result in a
more "aggressive" US policy to-
ward Cuba.
Fidel Castro's two-hour
speech on 23 November, which he
termed an "objective analysis"
of the implications of the
assassination, warned Cubans
that the President's death was
"serious and bad news." It
could, he said, turn "a bad
situation" into a worse one.
He also asserted that President
Kennedy's alleged promise not
to invade Cuba had been strongly
attacked by those "ultrareac-
tionaries" in the United States
who now are trying to create a
climate of "anti-Soviet and
anti-Cuban hysteria" designed
to pressure the new US Presi-
dent toward a Cuban policy
"highly prejudicial to the in-
terests of peace and of man-
kind."
Castro stated that he had
never heard of Lee Harvey Oswald
and insinuated that the Castro-
Communist affiliations of the
accused assassin were fabricated
by US "reactionaries" who, he
claimed, were the only people
who could benefit from the Presi
dent's death. In this connec-
tion he warned that a "sinister
maneuver" was under way, and
declared "we must be cautious
and vigilant and alert."
Che Guevara echoed these
warnings in a speech of 24
November, declaring that "the
years coming are going to be
as tough as, if not tougher
than, the years just past ...we
must be prepared to repel any
attack." He expressed confi-
dence in ultimate victory, not
only for Cuba but also for
"the peoples of Latin America."
Guevara stressed that the
revolutionary ferment in Latin
America is reaching a climax
and that the people there "are
going to conquer power in what-
ever manner necessary, destroy-
ing whatever force that opposes
them." He pointed out that
Cuba's continuing "anti-imperi-
alist struggle" is closely
linked with the coming revolu-
tion in the rest of Latin Amer-
ica. "The fight of all peoples
is also our responsibility,"
he maintained, "and it is part
of our daily preoccupation."
29 Nov 63 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY
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The Communist World
Moscow apparently has de- checking," whereas the US con-
cided to refrain from harass- voy was detained until it agreed
ing Allied convoys on the Berlin to "go through the same check."
autobahn, at least for the time
being. On 21 November the USSR
replied to the Western notes of
6 November which protested t:'e
detention of the US convoy on
4-5 November. The main purpose
of the reply was to restate for
the public record the Soviet
claim that the June 1945 agree-
ment between the Soviet and
Western commanders in Germany
gave the USSR the right to ex-
ercise "protection, maintenance
supervision, and control" on
highways used by the Western
garrisons in Berlin.
The Soviet note sought to
strengthen this claim by stating
that the "harmonized procedures"
conveyed by the Western powers
on 29 October "are in no degree
valid for Soviet military au-
thorities." Moscow denied
that American authorities have
any right to establish the ob-
ligations and "manner of opera-
tion" of Soviet checkpoint of-
ficials.
The note reflected Moscow's
sensitivity to the point made
in the Western notes contrast-
ing the detention of the US
convoy with the normal process-
ing accorded closely similar
British and French convoys on
5 November which also refused
to dismount. Moscow took ref-
uge in the pretense that
these latter convoys were not
challenged because they observed
existing procedures and
"presented caeir personnel for
The passage since the 4-5
November incident of five con-
voys of a size which are non-
dismountable under Allied pro-
cedures, the 16 November Soviet
statement on access procedures,
and Moscow's 21 November note
all suggest that Moscow has
decided to accept a standoff
in the autobahn dispute for the
present. The Soviet procedures
marked a clear retreat from
earlier extreme demands that all
personnel in convoys of more
than five vehicles are obliged
to dismount. Although the Soviet
procedures are not identical to
the Western "harmonized proce-
dures," the differences are not
great enough in themselves to
give rise to Further incidents.
The Soviet rules seem to pro-
vide Moscow with a practical
working arrangement not incon-
sistent with normal Western
convoy practices.
In light of the failure
to divide the Allies on the
access issue and the reper-
cussions of the Barghoorn case,
the Soviet leaders probably de-
cided this was not an opportune
time to propose formal negoti-
ations. Their efforts to es-
tablish an exclusive right to
control autobahn traffic, how-
ever, suggest that the Russians
will revive this issue whenever
theyfeel the situation is ripe
for another attempt to bring
the West into a new round of
Berlin negotiations.
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Eastern Europe is making plans
to prevent a recurrence of the
widespread discontent and the se-
rious dislocations in some sectors
of the economy which resulted from
last year's severe winter. The
fuel, power, and construction in-
dustries and the railroads were
the hardest hit, and although a
repetition of last year's weather
conditions would be unusual, it
is primarily in these sectors that
preparations are being made. While
there are signs that the other
Communist regimes are making sim-
ilar plans, the most detailed in-
formation is available on East
Germany's preparations.
The East German regime has
already warned that electric pro-
duction capacity again this winter
will be inadequate to meet demands
of all consumers. The shortfall
results from growing industrial
use of electricity, delays in com-
pletion of new generating capacity,
and the low water level available
for power generation. The regime
on 30 September published an ur-
gent appeal to save electricity.
It was followed a month later by
announcement of a "competition"
for "power thrift." Throughout
industry power consumption norms
are being established. Production
during night shifts is being in-
creased to make more efficient use
of the hours when power consumption
is normally at a minimum.
In the coal industry, the East
Germans have made an exceptional
effort to increase production and
have succeeded in raising coal re-
serves in industry by 5 percent
since last autumn. Measures also
have been taken to prevent freezing
of coal loaded in open rail cars
and of rail switches at the mines,
which posed major problems last
winter.
East Germany is easing the
burdens on its railroads by con-
tinued transferal of short-distance
hauling from the railroads to
trucks. New schedules for contin-
uous loading and unloading of
trains and trucks were instituted
on 1 October.
Production in high-fuel-con-
sumption industries such as steel
and ceramics reportedly will be
curtailed or halted as required.
About 60,000 workers would be af-
fected by such drastic measures.
Czechoslovakia also has warned
that electric power output will be
insufficient to meet all needs this
winter, largely for the same rea-
sons as in East Germany. The Czechs
began instituting measures to save
power as early as mid-August, and
preparations at power plants were
to be completed by the end of
October.
Both Poland and Hungary appar-
ently are concerned with ensuring
adequate coal supplies for the do-
mestic market. The chief of Po-
land's coal exporting agency has
said that the country this year
will export to nonbloc countries
one million tons less than last
year. This move, along with greater
coal production, will increase sup-
plies for the domestic market.
Hungary has announced that
coal production will exceed the
planned level by one million tons
as a result of overtime work, and
that imports of coal will be 1.2
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29 Nov 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
?; age 3
25X1
25X1
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The Communist World
PEIPING'S ECONOMIC RELATIONS WITH NON-COMMUNIST ASIA
Communist China's economic
activities in the countries of
non-Communist Asia now are re-
covering from the setback they
suffered in 1960 following the
failure of the "leap forward."
Peiping's 1963 trade with
most of these countries appears
to be above last year's, so the
Chinese probably will earn more
from their Asian trade this
year than they have in the re-
cent past. These earnings will
again be used chiefly to finance
imports of Western grain--which
presumably will continue at
about last year's level.
China's net export earnings
from trade with Hong Kong, its
largest source of free world
currency, are up about 25 per-
cent over 1962 and are running
at an annual rate of about $250
million. China's favorable
trade balance with Malaysia may
reach about $80 million this
year, about 10 percent over the
level achieved last year with
the members of the new federa-
tion. Sino-Japanese trade is
currently at an annual rate of
slightly over $100 million--up
from $84 million last year.
China's economic aid proj-
ects in the non-Communist Far
East have been implemented
slowly in the last few years.
Such activities are expected to
remain at a moderate level as
long as China's attention is
riveted on earning foreign ex-
change to buy grain.
The Chinese may, however,
be willing to provide additional
economic assistance to Cambodia,
which so far has utilized about
60 percent of a total of $50
million in Chinese grants.
Peiping responded favorably al-
though cautiously to overtures
from Prince Sihanouk after his
announcement of Cambodia's de-
cision to end the US aid program.
Earlier good-will gestures in-
cluded Liu Shao-chi's visit to
Cambodia last May, followed by
a trip to China by a Cambodian
bank delegation. Recently
Chinese technicians arrived in
Cambodia to survey prospects for
construction of a glass factory
to be financed under a 1960 grant.
A Chinese delegation this
month arrived in Djakarta to
discuss implementation of a $30-
million credit extended in 1961
for a textile plant. Peiping
recently agreed to provide Cey-
lon with textile plants and
equipment under their $16-mil-
lion aid pact signed in 1957.
Peiping's largest single
economic aid pact--an $84-mil-
lion credit extended to Burma
in 1961--has been drawn down
by only about $2 million.
Burma, however, has recently
accepted a Chinese offer to
build two bridges in northern
Burma, and there are indications
that formal approval of other
Chinese aid projects will be
fnrthcomina in the near future.
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29 Nov (33
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CURRENT INTELLIGENCE WEEKLY SUMMARY Page 5
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Muong Phine ;o ; I I 1St DI
f~ 1 Hue
PBTi* Special Zone >/
, r
? Bo Duc
' ~NORTN
VIETNA
(! s?i. DEMARCATION LINE
Ba H. S. oQileng Tri
Tchepone.
5th Division ?Nlnh CPhuoc Bin
7th Div(sin
OTakeo !
NOT NECESfARILY AUTHORITATIVE
ii' i
Loc y ~.
Phu Vinh
~" ?Phuoc Vmh
hu na Ilan I,
Mg ,
Hoa
nh
ON
Di Lln
ecic
Con Son (Poulo Condore)
CON SON
Milita r Zone
Ham NO Cu
Tan LAO
III CORPS ZONE
from na, es of provinces within the zone.
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SOUTH VIETNAM
MILITARY AND ADMINISTRATIVE
BOUNDARIES
mmmon Military Region boundary
- - - - Division boundary
b Nit
- Province boundary
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Communist military activity
in South Vietnam has continued
at an unusually high tempo in the
three weeks since the coup in
Saigon. Despite some slackening
of the pace, the greater effec-
tiveness of the attacks and their
spread to new areas will increase
pressure on the country's new
military rulers to produce some
dramatic achievement to sustain
the psychological lift generated
by their takeover.
In the week ending 18
November, Viet Cong attacks
dropped to 149 from the previous
week's all-time high of 233, but
were still 50 percent above the
average level set over the past
year. A number of actions on
24 November emphasized the bold-
ness of the Viet Cong offensive.
A battalion-size attack overran
a Special Forces training camp
about 25 miles north of Saigon,;
causing heavy losses among both
government troops and US advisers
Ground fire damaged several gov-
ernment aircraft operating in
the southernmost provinces. Near
the Laotion border in the central
highlands province of Kontum,
two strategic hamlets were
attacked.
In the delta, along the
area of he heaviest Communist
activity, a recent concentra-
tion of attacks in Dinh Tuong
Province, just southwest of
Saigon, and to a lesser extent
in its northern neighbors Long
An and Hau Nghia, has suggested
a possible effort to secure a
corridor between the Communist
war zone adjacent to Cambodia
in Tay Ninh Province, and
strongholds farther south in
the delta. The Kontum
attacks, however, suggest a
step-up may now be under way
in northern South Vietnam.
South Vietnam's military
leaders are aware of the need
to move rapidly in pressing
the war against the Viet Cong.
They are continuing to try to
strengthen intelligence functions,
and reportedly plan to reshuffle
commanders in the I and II Corps
Zones in the north. They have
already named vigorous new
commanders in the III and IV
Corps Zones, but reportedly
have not yet succeeded in
getting ambitious General
Dinh, the new security minister,
to relinquish control of the
III Corps Zone, which surrounds
Saigon. Dinh, whose political
intentions remain a concern
of the junta, is also stating
that he hopes to keep the
strategic hamlet program under
his ministry.
Meanwhile, the generals
are getting little active help
from civilian politicians,
and remain under pressure from
various urban groups to continue
weeding out the traces of the
Diem regime.
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29 Nov 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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? Muong Kheung
Ban Song Hoc Lat Bauak
Muong Sou, PLAT DU
Hong Pet
Phou Ker1g ? eMYng Khay
Muong P anh. D P SHE Kong 5avan
ES 11..
Lat Houang
Road
Track or trail
THAILAND
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dor
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Laos: A widening breach
appears To be developing be-
tween the Souvanna government
in Laos and the Communist
Pathet Lao. Further talks on
the Plaine des Jarres between
Kong Le, chief of Souvanna's
military forces, and Pathet Lao
commander dingkapo have been
jeopardized by an exchange of
allegations of bad faith. The
particular attitudes and inten-
tions of Premier Souvanna and
of the Pathet Lao strategists
remain obscure.
In the military field, the
initiative rests for the moment
with the government. A well-
coordinated clearing action
launched north of Vientiane on
21 November by forces under Kong
Le and rightist General Phoumi,
along with Meo guerrilla elements
has met with considerable success
The government forces have se-
cured Vang Vieng--long'held by
the Pathet Lao. Although an
earlier push by a similar combi-
nation of government forces in
the Plaine des Jarres area did
not attain comparable successes,
the Pathet Lao position at
Xieng Khouang town remains under
heavy threat.
Communist reaction to these
developments thus far has been
SYRIAN AND IRAQI REGIMES TRYING TO STABILIZE
The stability of the re-
gimes in Iraq and Syria is still
uncertain in the wake of the
army coup in Iraq. This in turn
leaves unsettled the status of
future relationships between
these two countries as well as
between them and Egypt.
In Iraq, a number of non-
Baathist army officers are
unhappy over the retention of
several Baathists in the cabi-
net, and President Arif may
have some difficulty in holding
together the disparate army ele-
ments who carried out the coup.
Statements by Iraqi regime
spokesmen, however, have con-
tinued to be conciliatory to
the Baath. They have reiterated
that the coup was not directed
toward any party, and Premier
Tahir Yahya has said that the
new government will continue the
previous regime's policies.
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In Syria, the Baathist re-
gime is split between moderates
who want to broaden the regime's
power base and a doctrinaire
faction that wishes to keep the
government under exclusively
Baathist control. The doctrin-
aire faction feels that several
statements made by Premier Hafiz
since he returned from Baghdad
(where he was caught at the out-
break of the coup) are concilia-
tory to non-Baathist elements
and reflect his personal opin-
ions rather than party decisions.
This dissension within the Baath
may affect the government's
ability to protect itself against
anti-Baath coup plotters who
have been heartened by events
in Iraq.
In an effort to moderate
the initially violent Syrian
reaction against the coup in
Baghdad, Hafiz had in fact en-
dorsed the Iraqi Army's move
against the national guard, the
Iraqi Baath Party's paramili-
tary arm. He also praised Presi-
dent Arif as a "brave Arab sol-
dier"and claimed that the coup
was staged by "Baathist ele-
ments." The Iraqi regime for
its part has proclaimed that
military union with Syria re-
mains in force and that a new
commander of the joint armies
will be announced shortly.
Syrian troops fighting in north-
ern Iraq will evidently remain
there, but a small Syrian unit
stationed near Baghdad is being
withdrawn.
While Cairo propaganda con-
tinues to call for a coup in
Syria similar to that in Iraq,
the Egyptians appear to be grow-
ing disillusioned over the
course of events in Iraq. Cairo
papers have backed off somewhat
from their all-out support of
the Iraqi coup since the an-
nouncement of the composition
of the new cabinet.
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Congolese Premier Adoula
last week declared all Soviet Em-
bassy personnel in Leopoldville
persona non grata. Adoula's move
followed the arrest on 19 Novem-
ber of two Soviet diplomats found
carrying documents showing the So
viets to be giving financial as-
sistance and encouragement to a
group of radical anti-Adoula
exiles across the Congo River in
Brazzaville. All of the Soviet
staff reportedly had departed by
23 November.
The premier charged that the
captured documents proved "unques-
tionably" the collusion of the So-
viet Embassy with the leftist "com-
mittee of national liberation" in
Brazzaville. He did not however,
break diplomatic relations with
the Soviet Union and has stated
that he will consider the appoint-
ment of a new ambassador. Although
Moscow has bitterly protested the
expulsion of its officials, it has
indicated an intention to replace
them rather than retaliate against
the Congo.
No action has been taken
against the Leopoldville missions
of three other Soviet bloc coun-
tries--Czechoslovakia, Poland, and
Bulgaria. Adoula earlier planned
to expel both the Soviet and Czech
missions, and for at least a month
the Congolese have been debating
some action to curb antigovernment
activities by all the Soviet bloc
missions. Soviet bloc representa-
tives have long been in contact
with dissident Congolese groups,
The Congolese exiles in Braz-
zaville consist of perhaps 50 anti-
Adoula politicians and soldiers,
adherents of the imprisoned Antoine
Gizenga and the late Premier Patrice
Lumumba. They fled to Brazzaville
following Adoula's closing of parlia-
ment in late September. Led by for-
mer Lumumbist Vice Premier Chris-
tophe Gbenye, they have been able to
operate fairly freely in the Brazza-
ville Congo's present confused at-
mosphere under the shaky provisional
regime of Massamba-Debat. They have
national liberation" for the Leopold-
ville Congo and are trying to convey
the impression that they constitute 25X1
a "government-in-exile."
Katanga's ex-President Tshombd,
still in exile in Barcelona, has
again appealed to Adoula to permit
him to return soon to the Congo. The
Leopoldville government apparently
still opposes Tshombd's return, and
his bid for a high government post
has been rejected.
Tshombd's recent promise to col-
laborate with the Leopoldville gov-
ernment in the 1964 parliamentary
elections appears to be having some
appeal, however. Tshombd says he
has decided to return soon, but has
for his personal safety from the
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CURRENT INTELLIGENCE WEEKLY SUMIARY
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ALI
oKidal
0Kayes
BAMAKO
Timbuktu
0
0Gao
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MALAISE IN MALI
Mali's leftist government
is facing increasingly urgent
economic and political problems
at a time when President Modibo
Keita's efforts to mediate the
Moroccan-Algerian dispute have
raised his standing to a new high
elsewhere in Africa. In the
face of mounting criticism from
politicians with strong local
power bases and from young gov-
ernment functionaries, Keita
is devoting major attention to
defending his party's hegemony.
He must also contend with dissi-
dence among nomadic tribesmen
and with a desperate foreign ex-
change shortage.
The key problem probably
is that of foreign exchange.
The government brought most of
its troubles on itself a year
and a half ago when, in a fit
of excessive Marxist-flavored
anticolonialism, it in effect
cut itself off from automatic
access to the French foreign
exchange reserves and set up a
Malian currency. Since then a
steady adverse trade balance
has cut into the country's own
meager reserves, and by mid-
November they had fallen to an
estimated $1 million. The gov-
ernment's budget deficit is
running about $14 million an-
ually. France reluctantly
bailed the Malians out once be-
fore with a stopgap dole, but
it may be unwilling to do so
again. The bloc has consistent-
ly refused to extend budgetary
assistance, although it has pro-
vid>d development credits
amounting to $67.5 million.
Doctrinaire rigidity has
helped to make ineffective the
government's efforts to alleviate
this situation. Whereas Guinea's
Sekou Tour6 has recently retreated
from "African socialism" when
faced with an even worse situa-
tion, Keita and his associates
have been reluctant '-o curtail
the activities of such consistent
money-losers as the state trading
company and the state airline.
This evidence of ineffective-
ness has brought to the surface
dissatisfaction among local pol-
iticians whom Keita has never
succeeded in bringing under
close control of his Soudanese
Union Party. These local figures,
who generally occupy the conserv-
ative end of the spectrum, seem
to control the National Assembly.
They also have at least some in-
fluential spokesmen both in the
party's political bureau and in
the executive branch of the gov-
ernment, especially among elements
desiring a pragmatic approach to
Mali's problems.
At the same time, Keita
is faced with active defiance
of the regime's authority on the
part of Tuareg nomads in the
country's northern deserts.
Half of the army reportedly
now is deployed in an effort,
so far unsuccessful, to halt
raids by these tribesmen. Keita
himself has spent most of this
month in outlying areas, trying
to re-establish party control
over potential and actual
centers of dissidence.
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Europe
The 21-22 November talks
between Charles de Gaulle and
Ludwig Erhard seem to have estab-
lished a good working relation-
ship and clarified aspects of
France's and West Germany's
national policies, but produced
few decisions.
Common Market, some slight
progress was made. Neither
leader appeared prepared as yet
to accept the Mansholt plan
whereby a single community
grain price would be set between
the high German level and the
lower French level
Erhard again made it plain
that he favored a Europe rooted
in an Atlantic community rather
than the French-led third force
which De Gaulle envisages.
On defense questions, the
new German chancellor and the
veteran French chief of state
"agreed to disc ree "
Erhard publicly reaffirmed
Germany's trust in the protec-
tive shield of US military power.
Neither leader dis ara ed the
other's ositi n
On the divisive and po-
litically treacherous issue of
agricultural integration in the
(Implicit
in the relaxed atmosphere was
the suggestion that De Gaulle
now is willing to discuss the
grain issue beyond the year-
end deadline be had previously
set for final agreement on
EEC agricultural policy.
It was agreed, moreover,
that EEC arrangements for beef,
dairy products, and rice be
completed by the end of December.
In addition, the communique
issued at the close of the
talks looked forward to the
successful conclusion of the
negotiations envisaged by the
US Trade Expansion Act.
Erhard and De Gaulle
throughout the talks apparently
maintained an air of cordiality,
but Erhard demonstrated that he
was neither so innately sympa-
thetic to De Gaulle's views as
was Konrad Adenauer nor so
willing to play a secondary
role. Thus Erhard may have
served notice that a somewhat
sterner era for Franco-German
relationships has arrived
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The Council of the European
Coal-Steel Community (CSC) is
meeting on 2 December to deal
with the problems that afflict
the continental steel industry.
The session promises to have
far-reaching implications for
the CSC's future as well as for
the eventual outcome of inter-
national tariff negotiations
that are set for next spring.
The steel industry in the
Six now is running about 20
percent below capacity. More-
over, steel manufacturers have,
in recent months, suffered from
reductions in price that have
taken place both inside and out-
side the community. During the
past year, CSC officials have
advanced several possible solu-
tions to the problem--including
the promotion of both official
or private agreements with for-
eign producers to limit their
exports--but none of these has
proved effective.
More recently, the CSC has
been increasingly attracted to
the idea of raising tariffs,
but so far has not received
solid backing from the member
states for such a move. The
Council has also been put on
notice by the US that a tariff
hike on an item so important
as steel would have grave polit-
ical and psychological conse-
quences on the forthcoming
tariff negotiations.
However, pressure for a
steel tariff hike or some oth-
er restrictive action again
seems to be building up. The
latest word from Paris, for
example, indicates that the
French Government may have re-
versed its position and now
will support a tariff rise
that was proposed by Bonn three
months ago. If Paris and Bonn
see eye to eye on this, it is
probable that their tariffs will
go up to 9 percent--the pres-
ent level in Italy. A restric-
tion on trade would primarily
affect Japan, Austria, and the
UK, since the CSC already has
strict quotas on imports from
the bloc.
The political importance
of the steel tariff question
to the CSC has been generally
recognized in the community.
President Del Bo has intimated
to US officials that unless
the CSC can produce a Community-
wide solution to the challenge,
the CSC's very existence will
be threatened.
The CSC's failure to pro-
duce a solution to date, how-
ever, is indicative of its de-
clining power and prestige.
Its governing body, the High
Authority, has, in theory, more
power than its counterpart in
the Common Market. But this
authority has sharply deteri-
orated because of its failure
to exercise its powers and the
anpointment of mediocre per-
sonnel to its staff. This
deterioration began in 1958
when, under very smiliar cir-
cumstances, the High Authority
was unable to produce a solution
to the then serious glut in
coal. Shoul. the member states
resort to urilateral solution
to the present problems in
steel, there would be little
left of the CSC--the first and
most supranational of the three
European communities.
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Europe
Italy: Leaders of Italy's
four coalition parties reached
agreement over the week end on
the proposed program for a cen-
ter-left government and submitted
it to their parties' national
executive committees for approval.
Ratification by Pietro Nenni's
Italian Socialist Party is com-
plicated by an intransigent group
of 10 of the 32 left-wingers
among the party's 87 parliamen-
tary deputies. A party spokesman
told US Embassy officials that
Nenni was willing to risk a split
Brazil: Recently published
statements by President Goulart
have added to the widespread un-
rest in Brazil and increased
speculation that he is planning
to establish an authoritarian
regime. In an interview with
the Brazilian weekly Manchete,
published on 20 November, ou-
lart declared that he had no
doubt Brazil's rampant infla-
tion will push 'the country "in-
evitably to bankruptcy" and a
"social disaster of catastrophic
proportions." He emphasized his
lack of presidential powers to
solve the present crisis.
Coulart's words have aroused
sharp criticism from responsible
political leaders and influential
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29 Nov 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
in the party to go along with
the accord.
Negotiations over appoint-
ments to the cabinet have pro-
ceeded with some degree of ur-
gency. There was general agree-
ment that the Christian Democrats
would retain the defense portfolio,
as well as the Ministry of In-
terior, which controls the police.
The question of ex-premier Amintore
Fanfani's participation has been
Western Hemisphere
newspapers. The US Army attache
reports a growing concern among
army officers that Goulart may
attempt some extreme action during
the next few weeks.
In any event,
I C is likely that political
tension will remain high for
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Western Hemisphere
Venezuela: Communist ter-
rorists can be -expected to con-
tinue right up to election day
their campaign to sabotage the
voting in Venezuela on 1 Decem-
ber for a new president and
congress. There is no reason,
moreover, to believe they will
turn from violence afterward.
The proficiency of the gov-
ernment security forces has
been steadily improving, how-
ever, and more terrorists are
being arrested each day. The
Venezuelan armed forces con-
tinue to investigate reports
of clandestine landings of weap-
ons for terrorist forces.
With the security situation
reasonably well in hand, there
is no question that the elections
will be held on schedule. In
addition, the prospects are
that the voters will turn out
in large numbers despite Com-
munist efforts to intimidate
them.
In any event, electioneer-
ing has continued apace, and
most observers still consider
Raul Leoni, heading the Demo-
cratic Action party's ticket,
to be the likely winner by a
small plurality.
The victor's biggest prob-
lem will be to pull together
an effective coalition govern-
ment. Leoni lacks the personal
magnetism and political acumen
of incumbent President Betan-
court. Failure on Leoni's part
to convince the military of his
ability to handle the terrorist
problem could encourage plotting
for a coup d'etat.
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NOW *me
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