WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004700070001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 21, 2016
• Document Release Date: June 11, 2008
• Sequence Number: 1
• Publication Date: December 24, 1964
• Content Type: SUMMARY

Approved
CENTRAL .-1NTELL.IGENCE AGENCY
OFFICE OF
CURRENT INTELLIGENCE
25x1 State Dept. review completed
SECRET
GROUP 11 Excluded" fromautomatic 11 ,downgrading and declassification
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%..% SECRET
(Information as of 1200 EST, 23 December 1964)
THE COMMUNIST WORLD Page
USSR RENEWS BID TO ATTEND AFRO-ASIAN CONFERENCE
The tentative nature of Moscow's current soundings
suggests that it does not really expect to secure an
invitation but is trying to take advantage of Afro-
Asian fears that the Chinese will dominate the con-
ference next March.
SOVIET PURCHASING ACTIVITY IN WEST EUROPE SLOWING DOWN 2
Contracts have been signed this year for about $200
million worth of chemical plants, but the economic
views of the new Soviet leadership make it unlikely
that many new deals will be undertaken.
SOVIET PLANS FOR THE 1964-65 ANTARCTIC SEASON
Preliminary information indicates no expansion of
the program set up when the International Year of
the Quiet Sun began a year ago. The US-Soviet ex-
change of scientists will continue.
SCANDALS ROCK HUNGARIAN REGIME
Party leader Kadar is under new fire from party hard-
liners for assigning high government positions to
nonparty technicians, some of whom have recently been
implicated in embezzlement scandals.
RUMANIA CONTINUING TO ASSERT INDEPENDENCE FROM THE USSR 5
Bucharest appears to be taking advantage of the change
of leadership in Moscow to re-emphasize its independ-
ence, often with actions which, whether intentionally
or not, have a distinctly pro-Peiping flavor.
CZECHOSLOVAKIA TRIES NEW ROLE IN THE SOVIET BLOC
Prague's new policy of reducing its subservience to
Moscow was an outgrowth of the domestic liberalization
forced on old-time Stalinist leader Novotny by dissident
elements in his party. The change is especially evi-
dent in the support Prague gave Khrushchev after his
ouster, in the recent publication of a draft economic
reform program which includes broader use of the market
mechanism, and in attempts to improve economic and
,political relations with the West. (Published sep-
arately as Special Report OCI No. 0363/64A)
24 Dec 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i
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r
SECRET
ASIA-AFRICA Page
SOUTH VIETNAMESE MILITARY IN NEW POWER PLAY
The dissolution of the High National Council has under-
mined the foundation of civilian rule. The Buddhists
have suspended their antigovernment campaign in order
-to assess the ramifications of the action.
PAKISTAN'S PRESIDENTIAL ELECTION CAMPAIGN
The contest between Ayub Khan and Miss Jinnah has en-
gendered great bitterness, and will probably weaken
the government regardless of the outcome on 2 January.
FOREIGN ARMS AID INCREASES CONGOLESE REBEL ACTIVITY
Government forces in the northeast Congo are encoun-
tering greater harassment from rebels now armed with
Soviet weapons received from their African backers.
THE COMMON MARKET'S GRAIN PRICE AGREEMENT
The decision to establish unified grain prices is an
important step toward achieving a common EEC agri-
cultural policy and possibly common policies in other
economic fields. It will also have important impli-
cations for the Kennedy Round. Whether it will spur
agreement on political unity is uncertain.
BONN RENEWS EFFORTS ON BEHALF OF GERMAN UNIFICATION
:Bonn is pressing once again for a Western approach to
the new Soviet leaders on the German question, despite
the skepticism of its allies that such a move at this
time would be productive.
EFFECTS OF US STATEMENT OF CANAL PLANS
President Johnson's statement has strengthened the
;government position in Panama, where even extremists
admit that the danger of new violence next month over
the canal issue now has been reduced. Reaction in Nic-
aragua, Costa Rica, and Colombia has been cautious.
Cuba and the USSR have accused the US of blackmail.
SECRET
24 Dec 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page
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Nor,
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25X6
WESTERN HEMISPHERE (continued) Page
PERONIST PROTEST STRIKE FAILS IN ARGENTINA 14
The politically motivated two-day general strike col-
lapsed by the middle of the second day, and thorough
but restrained police activity prevented incipient
demonstrations and riots.
STRAINS IN BRAZILIAN-URUGUAYAN RELATIONS 14
Brazil is considering retaliation against Uruguay for
its failure to restrict the activities of Brazilian
exiles, and is also concerned over signs of instability
in the Uruguayan Government.
SECRET
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SE CRE T
Moscow has resumed diplo-
matic soundings concerning the
possibility of participating in
the Afro-Asian "summit" confer-
ence in Algiers, scheduled for
next March.
The issue of Soviet attend-
ance was initally raised by the
Indian delegation at the Djakarta
preparatory conference last
April. Peiping led the opposi-
tion to the Indian proposal, and
blocked a Soviet invitation at
that time.
A Soviet Government state-
ment in May asserted that the
USSR had a right to attend be-
cause of its Asian geography and
its history of political and
material support for Afro-Asian
countries. However, Moscow's
campaign to gain an invitation
met with little enthusiasm, as
most Afro-Asian governments
were reluctant to have the ef-
fectiveness of the conference
undermined by a Sino-Soviet
hassle.
In August, Moscow made a
tactical retreat, reiterating
its right to attend, but claim-
ing that, because of its over-
riding concern for the welfare
of the Afro-Asian movement, it
could not allow its participa-
tion to be an embarrassment to
friendly states,
The tentative nature of
the latest approaches suggests
that Moscow is not very optimis-
tic about obtaining an invita-
tion. Its main purpose probably
is to take advantage of appre-
hensions on the part of some
Afro-Asian governments that the
Chinese will dominate the confer-
ence. Soviet tactics appear
aimed at provoking strong Chi-
nese opposition to Soviet attend-
ance and then exploiting it to
support charges that Peiping
is undermining the solidarity
of "anti-imperialist forces."
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SECRET
SOVIET PURCHASING ACTIVITY IN WEST EUROPE SLOWING DOWN
Soviet negotiations with
Western traders for the purchase
of major industrial plants and
equipment continue to be marked
by indecision.
Contracts have been signed
this year for about $200 million
worth of free world chemical
plants--a large British synthetic
-textiles plant accountin for
half the total.
Much Soviet effort has gone
into the procurement of long-
term credits, with the UK, France,
and Italy agreeing to guarantee
about $650 million for industrial
plants to be paid for over a 7-
to 15-year period. However,
only two specific deals--for
about $100 million on 13- to 15-
year terms--have been arranged.
It is possible that the expense
of these deals--the interest in-
creases the cost of the plant
by 50 percent--has caused Soviet
officials to have second thoughts.
The economic views of the new
Soviet leadership make it un-
likely that any large number of
long-term credit deals will be
undertaken. Buying activity in-
creasingly may be governed by
how the USSR views the earning
potential of its exports.
Recently a Soviet official
indicated the USSR now hopes to
reduce the expense of buying
large quantities of Western equip-
ment by purchasing, wherever
possible, only processes and ad-
vanced technology. Theoretically
this is attractive, but in prac-
tice many Western suppliers might
prefer not to sell or guarantee
technology and processes when
they cannot oversee implementa-
tion. Furthermore, all of the
Westerners who have built plants
in the USSR have been critical
of Soviet construction and pro-
duction methods, and it is ques-
tionable whether the USSR could
get full benefit from "know-how"
alone without consultants to go
with it.
The USSR is still unable
to finance all the imports it
would need to skip intermediate
steps on its way to modern,sophis-
ticated industrial production.
To proceed with an ambitious plan
to secure and use advanced tech-
nology, it must find some way to
step up its exports. Current
rumors that a reorganization of
the Ministry of Foreign Trade is
under way suggest that Moscow
may have resorted again to re-
arranging administration in the
hopes of remedying some of the
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
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NWO
SECRET
SOVIET PLANS FOR THE 1964-65 ANTARCTIC SEASON
Preliminary information on
the Soviet Tenth Antarctic Ex-
pedition indicates that a modest
program will be conducted in all
areas of research. The chief
logistic effort will be concen-
trated on making Molodezhnaya
into the main base for future
Soviet expeditions.
Research will continue in
upper atmospheric physics under
the program of the International
Year of the Quiet Sun begun a
year ago. There is no sign,
however, of plans for signifi-
cant new work or expansion be-
yond the present program.
Geological and mapping op-
erations will be conducted along
past lines, and a minimum of
oceanographic work is expected.
The wooden buildings at Molo-
dezhnaya will be replaced by
prefabricated houses constructed
on fireproof piles.
Reflecting the limited plans
for 1964-65, the Soviet expedi-
tion will consist of only 300
men, including the crews of the
two supply ships. Some earlier
expeditions have been twice as
large. Despite the smaller size
of the expedition, however, a
larger number of scientists from
Eastern Europe will participate
in the Soviet program than last
year. Polish scientists report-
edly will be added to teams from
Czechoslovakia, East Germany,
and Hungary. The US-Soviet ex-
change of scientists will be
continued, and the USSR will pro-
vide some assistance to a small
Japanese team.
In contrast to last year,
there is apparently no plan to
bring in extra men by air from
Moscow. In another new develop-
ment, the Soviet air detachment
in Antarctica will be withdrawn
for the winter period for the
first time in 10 years.
Four Soviet whaling fleets
will be active in Antarctic
waters this year. For the first
time these ships transited the
Suez Canal and will be operating
in a new sector off Antarctica.
The route through Suez will per-
mit a longer hunting season than
previously for sperm whales,
which are not subject to inter-
national control. The Soviet
whaling fleets in the Antarctic
are supported by weather report-
ing from the USSR's station at
Mirnyy.
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SECRET
25X1
Hungarian party boss Kadar's
use of nonparty technical spe-
cialists in important policy-
making positions has recently
come under heavy fire from
widely disparate elements within
the party. Hard-line elements,
in particular, are highly criti-
cal as a result of domestic
scandals involving embezzlement
by some of these technicians.
The most extensive scan-
dal was revealed on 5 December
when the regime press disclosed
that more than a dozen employees
of the State Restaurant and Ca-
tering Enterprise had been ar-
rested for criminal conspiracy.
It has been widely rumored that
this scandal involved over a
hundred persons, including three
government ministers and the di-
rector-general of the Hungarian
civil air line.
Kadar's policy, of several
years' standing, has never been
fully accepted in the party be-
cause of fears that its author-
ity would be diluted.
In a speech on 3 December
politburo member Sandor Gaspar,
undoubtedly aware of the brew-
ing scandals, acknowledged con-
cern at the highest level over
the question of party controls.
He hinted that responsibility
for mismanagement may not lie
exclusively with local officials,
and stated that the central com-
mittee--which subsequently met
from 8 to 10 December--would
take steps to eliminate abuses
in middle-echelon leadership.
On 17 December, the Budapest
party committee announced that,
after considering the recommen-
dations of the central committee,
it had relieved two municipal
party leaders of their duties
"for other important assignments."
Over the past two months,
other high party officials, in-
cluding Kadar himself, have
warned "dogmatists" to refrain
from politicking against domes-
tic policies. On 12 December,
Kadar--in his first public state-
ment since 18 October--again at-
tempted to discourage opposition
elements within the party and,
while tacitly admitting some
failures in his program, re-
jected any modification. His
announcement of the central com-
mittee's approval of cutbacks
in production goals for 1965
will undoubtedly provide addi-
tional ammunition for his crit-
ics.
Kadar's control of the
party apparatus does not yet
appear to have been signifi-
cantly weakened. These develop-
ments suggest, however, that
his regime may be entering a
period of instability character-
ized by increased party fac-
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SECRET The Communist World
RUMANIA CONTINUING TO ASSERT INDEPENDENCE FROM THE USSR
Since the ouster of Khru-
shchev, Rumania has broadened
the scope of its independent
activities. Although Bucharest
prefers to avoid committing it-
self in the Sino-Soviet dispute,
its recent efforts to assert
its independence on certain
issues have unavoidably had a
distinctly anti-Russia.n cast.
The result, intentional or not,
is that some of them serve to
support Chinese Communist posi-
tions.
The Rumanian representa-
tive, at the Eighth International
Students' Union (IUS) Congress
held in early December in Sofia,
attacked the Russian-backed
principle of majority vote, in-
sisting that only unanimous de-
cisions prevail, a position
the Chinese have long espoused.
Rumania had expressed this view,
but in a, less uncompromising
tone, at the World Federation
of Trade Unions meeting in Oc-
tober.
In a. book published by
the Rumanian Academy on 24 Oc-
tober, entitled Notes About
Rumania, the regime happily
used our little-known and
ancient articles by Karl Marx
to support Bucharest's position
on current sensitive territo-
rial issues with Communist
neighbors. The manuscripts, un-
covered by a diligent Rumanian
party researcher in the musty
files of the Marx-Engels ar-
chives in Amsterdam, were crit-
ical of Russia for taking over
Bessarabia and of Hungary for
its oppressive rule in Transyl-
vania. Many of the historical
events criticized by Marx have
an obvious parallel in the So-
viet excesses during the post-
war occupation in Rumania.
In addition to these meas-
ures, Rumania's party journal
Scinteia. published on 14 Decem-
ber the text of Deputy Premier
Birladea.nu's recent interview
in Paris in which he had empha-
sized Rumania's positive atti-
tude toward relations with the
West. The interview came at the
conclusion of Birla.dea.nu's month-
long visit during which a. five-
year trade pact with France was
signed. On 16 December the
president of Rumania's State
Planning Commission pointedly
told the US ambassador that fur-
ther developments can be expected
in Bucharest's rapprochement
with the West.
Bucharest appears to be
taking advantage of the change-
over period in Moscow to empha-
size Rumania's independence.
Except for Tito, Gheorghiu-Dej
remains the only Eastern Euro-
pean party chief who has not
met with the new Soviet leaders.
The regime is apparently
united in pursuing its present
course. All ranking Rumanian
leaders approved party activities
in international relations at
an enlarged central committee
plenum held from 30 November
to 1 December. The plenum wa.s
preceded by a two-week series
of high-level working sessions,
suggesting that a. major review
was made of all policies in light
of the changes in the USSR.
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IWO SECRET W
A power play last week end
by armed forces chief General
Kha.nh and the young operational
military commanders appears to
have undermined the foundation
of civilian rule in South Viet-
nam.
On 20 December, the mili-
tary unilaterally dissolved the
High National Council which had
set up the Huong government.
Most of the council members
were arrested, along with more
than 100 civilian opposition
leaders. The officers insisted
that they continued to support
civilian Chief of State Suu
and Premier Huong, and were
merely purging disruptive "coun-
terrevolutionary" elements who
were illegally holding up ac-
tion on an armed forces order
to retire older officers.
The reassertion of the
armed forces' power, however,
has made Huong and Suu appear
to be little more than figure-
heads for a military dictator-
ship. Because the military
have indicated no desire to take
over routine administration,
the two may still be in a posi-
tion to wrest specific promises
against further military inter-
ference as the price of remain-
ing in office. Premier Huong,
however, still depends primarily
upon support from the armed
forces in resisting the demands
of the Buddhist hierarchy for
his removal.
Although there are indica-
tions that Khanh merely acceded
to pressure from the "young Turk"
generals to dissolve the High
National Council, he now has
closely associated himself with
their move. In a. strongly worded
communiqud on 22 December, he
extolled the "responsibility of
the armed forces before history"
and warned that the army will
not bow to foreign dictation.
This appears to reflect both
Khanh's maneuvers to maintain
his position as armed forces
chief and his irritation with
US criticism of the military
move.
Buddhist leaders had been
showing some interest in nego-
tiating with the government
while simultaneously preparing
for an expanded public hunger
strike in protest against the
regime. Following the armed
forces' move, however, the monk
Tri Quang stated that he was
suspending the campaign against
Huong, presumably in order to
assess the ramifications of the
military action. Quang indicated
that Buddhist agitation would
be resumed if Huong continued
his "anti-Buddhist" policies or if
General Kha.nh reassumed real power.
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SECRET
During the past week, Viet
Cong terrorist and military ac-
tivity increased in scale, but
decreased significantly in in-
tensity, as measured by a de-
cline in the number of attacks
in company and battalion strength.
The majority of incidents con-
tinued to be small-scale armed
attacks and ambushes, hamlet
harassment, and terrorism against
government highways, bridges,
The bitter political atmos-
phere in Pakistan generated by
the presidential contest between
President Ayub and Miss Fatima
Jinnah seems likely to grow even
more intense after the 2 January
elections and will probably
weaken the government, regard-
less of the outcome.
If President Ayub is elected,
he will probably encounter a far
more active opposition during
his next administration than he
has had to deal with so far.
The five opposition parties back-
ing Miss Jinnah have Ayub running
scared, and they have developed
new confidence and determination.
On losing the elections they
would probably continue to coop-
erate in their efforts to ob-
struct the Ayub regime.
Miss Jinnah appears con-
vinced that the campaign is going
in her favor and that only skul-
duggery can deprive her of vic-
tory.
On the other hand, an upset
Jinnah victory would probably
lead to a period of intense po-
litical maneuvering and instabil-
ity, especially in the National
Assembly. The parties backing
her would be forced to seek
agreement on a common construc-
tive policy. Even if they gain
a parliamentary majority in the
elections next April, however,
they would probably not remain
together for long, for they
vary from Muslim extremists to
pro-Communist leftists and share
little but a common desire to
oust Ayub.
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CAMEROON .].
DEMOCRATIC CENTRAL AFRICAN REPUBLIC
REPUBLIC
OF THE
CONGO
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SECRET
FOREIGN ARMS AID INCREASES CONGOLESE REBEL ACTIVITY
Government forces in the
northeast Congo are encounter-
ing greater harassment from
rebels now armed with Soviet
weapons received from their
African backers. The govern-
ment so far has been unable to
interdict completely the supply
route from Sudan.
Rebels attacking at Paulis
are armed with Soviet weapons
which probably constituted part
of the recent shipments coming
through Sudan. Other Soviet
arms have been captured near
Bunia.
The recent loss of a T-28
near the Ugandan border probably
was caused by automatic ground
fire.
Improved rebel tactics
suggest that foreign advisers,
if not troops, are assisting
the rebels.
Meanwhile, the mercenary-
led group operating out of Bunia
is moving toward towns along the
Sudanese and Ugandan borders to
try to cut these routes before
large quantities of supplies
reach the rebels.
Farther south, recent new
large shipments of arms to Bu-
rundi from Tanzania may also
reach the rebels in the Fizi-
Uvira area, where an upsurge of
rebel attacks is expected.
Government forces have made
some small gains elsewhere.
Units moving westward from Bu-
kavu toward Kindu continue to
capture small villages despite
increased rebel harassment.
In the northwest, the rebels
are retreating north of Boende,
but stiff resistance around
Opala on the Boende-Stanleyville
road recently forced the govern-
ment to abandon this position.
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SECRET W
The EEC's decision on 15 De-
cember to establish common prices
for grains marks a historic ad-
vance in integrating the agricul-
tural markets of the six member
countries and in overcoming per-
haps the most troublesome single
hindrance to economic integration.
The agreement opens the way for
unification of prices of other
agricultural products, will prob-
ably create pressures for common
policies in the monetary and tax
fields, and will have important
implications for the Kennedy Round.
Psychologically, the decision
has created a more favorable cli-
mate for progress within the Com-
mon Market than has existed since
De Gaulle's 1963 veto of the UK's
entry. Whether the improved at-
mosphere will also spur agreement
on political unity is still un-
certain.
The unification of cereal
prices in one step--to be taken
in July 1967--will create a single
market for these products three
years ahead of the date foreseen
by the EEC treaty. Grains not
only constitute the bulk of intra-
community agricultural trade, but
also are crucial for the prices of
such commodities as dairy products,
beef, and veal. For this reason
the common prices for grains will
bring about a general acceleration
of measures to achieve a common
agricultural policy (CAP).which
will balance the already acceler-
ated pace toward a free market for
industrial goods.
France will benefit most from
the enlarged community outlets for
its excess grain production, and
Paris has already indicated that
it wants the establishment of
single markets for other farm prod-
ucts speeded up. Germany on the
other hand, will suffer heavy
short-term financial--and perhaps
domestic political--costs from its
agreement to common grain prices,
but the acceleration of the CAP will
advance Chancellor Erhard's long-
term goal of rationalizing German
agriculture. Germany may also have
gained some leverage to use in its
effort to push both its own and the
EEC Commission's proposals for ac-
celeration or tariff reduction and
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elimination of community "tax
frontiers."
In addition to establishing
the prices themselves--at levels
somewhat closer to low French than
high German ones--last week's
agreement sets the stage for plac-
ing grain subsidies under commu-
nity financial arrangements managed
by the EEC Commission. The Com-
mission's influence--already en-
hanced by the success of its ini-
tiative in proposing the one-step
price integration--will thus be
further increased in the community
decision-making process. Future
revisions of the price level, more-
over, can be undertaken only on
the basis of a Commission proposal.
Furthermore, the Council of Minis-
ters did not try to extend beyond
1 January 1966 the present require-
ment that any revision of the price
level needs unanimous approval of
the members.
Although many difficulties
lie in the way of a true monetary
"union" among the Six, the grain
price agreement will lend increased
importance to studies already un-
der way on closer monetary coopera-
tion. Since grain prices will be
expressed in a common "unit of ac-
count"--equivalent to the dollar
--changes in the value of one mem-
ber's currency could have profound
economic effects on its partners
because of the trading importance
of farm commodities. The grain
price agreement can also be ex-
pected to increase pressures for
the community to pursue coordinated
business--cycle policies designed
to prevent divergent movements in
over-all national prices.among the
six.
As for the EEC's participa-
tion in the Kennedy Round, the
agreement will permit the community
to approach the bargaining on agri-
culture with a substantive--rather
than merely "theoretical"--negotiat-
ing position. This in turn should
remove one obstacle to progress on
the industrial side of the trade
talks.
The 15 December decision has
received a favorable response in
all of the Six, although the heavy
financial obligations incurred by
Bonn to the German farmers somewhat
tempered German optimism. The
Italians have expressed concern
over the potentially inflationary
effect of higher agricultural
prices in their country, but have
on balance been pleased by the con-
cessions they obtained in the grain
price package.
The grain price agreement in-
creases the stake both of France and
Germany in the EEC and, to some ex-
tent, in the limited "supranational"
processes which now effect agreement
among the Six. The community may
thus have gained some insurance
against detrimental changes in its
functioning which could emerge from
agreements in the broader European
political union discussions, ex-
pected to resume early next year.
With the important economic differ-
ences now settled by the movement to-
ward an integrated agricultural mar-
ket, however, the principal remain-
ing area of contention between 25X1
France and Germany--the issue of
European defense--will be even
more evident.
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BONN RENEWS EFFORTS ON BEHALF OF GERMAN UNIFICATION
The change of leadership in
Moscow has inspired Bonn to press
once again for a Western initia-
tive on the 19-year-old German
question despite the skepticism
of its allies that an approach to
Moscow at this time would be pro-
ductive. Top German officials,
including Chancellor Erhard and
Foreign Minister Schroeder, share
this skepticism to some extent,
but assert that efforts must con-
tinue to be made in behalf of
German unification. Bonn feels
that the new Soviet leaders must
be confronted with an agreed
Western position as quickly as
possible so as to dispel any
illusion they may have that the
Germans are willing to accept
the status quo.
The core of the German pro-
posal, as introduced by Schroeder
at the 14 December meeting of the
Western foreign ministers, is the
establishment of a standing coun-
cil composed of US, Soviet,
British, and French representa-
tives and empowered to seek prog-
ress on the unification question.
At the same time, however, Schroe-
der asked the other ministers
to endorse publicly the thesis
that the time is ripe for an
approach to Moscow. This latter
request became an issue in be-
hind-the-scenes maneuvering, and
Schroeder subsequently blamed
French obstructionism for the
failure of the ministers to issue
such a statement. French Foreign
Minister Couve de Murville re-
portedly indicated to Schroeder
that France could not consider
the German request, given Bonn's
continuing outspoken support for
the MLF.
The incident served to
stir up a flurry of anti-French
feeling in the Federal Republic,
though many commentators blamed
the German defeat on Schroeder,
whom they accused of needlessly
irritating the French in his NATO
Council speech of 15 December.
Officially Bonn has chosen to
play down the dispute, apparently
in order to concentrate on its
four-power council proposal.
Erhard, according to a government
spokesman, will pursue the matter
in his meetings with De Gaulle
and Wilson early next year.
While unification does not
loom as a major issue in the 1965
election campaign, Erhard feels
he must take some action in be-
half of Germany's top national
objective, or be open to the
charge of neglecting it. Prob-
ably hp and other government
leaders agree with opposition
leader Willy Brandt that the most
promising course of action lies
in a policy of "small steps" to
improve relations with East
Germany.
Still, the possibilities of
political debate on the unifica-
tion issue were pointed up by the
differing reactions in the govern-
ment and opposition camps to the
recent proposal of UN Assembly
President Quaison-Sackey to have
the UN consider the German prob-
lem.. Bonn greeted the proposal
coolly, with the view that it is
dangerous to allow the question
to slip from under exclusive four-
power jurisdiction. Brandt said 25X1
publicly that he thought the
government should not have been
so negative.
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Surprise and admiration--
some of it grudging--over US
initiative and foresight have
been the general reaction to
President Johnson's statement
of US canal plans on 18 Decem-
ber. :Panamanian Government of-
ficials were jubilant and the
public reception was favorable,
but there is some concern as to
the ultimate effects on Panama.
Opinion in Latin America has
been mostly favorable.
Panamanian President Robles'
position has been strengthened,
and his enemies have lost their
main weapon against him. Even
extremist Panamanians say the
statement has reduced the danger
of major violence on the first
anniversary of the 9 January
riots.
Not unexpectedly, those
riots and former president
Chiari's adamant nationalistic
stance are being credited by
Panamanians with influencing the
US decision. Some newspapers
have asserted that extremist
elements served a useful pur-
pose in Panama's "popular tri-
umph."
Communists and far leftists
in Panama were caught off-base
and are apparently chary of chal-
lenging the general satisfac-
tion. They have thus far either
kept quiet or confined their
overt reaction to playing on
doubts in the minds of Panama-
nians and to raising the issue
of "neutralizing" the Canal
Zone by excluding US military
forces.
Comment in Nicaragua, Costa
Rica, and Colombia has been cau-
tious and generally indicates
that those countries feel Panama
is the first choice of the US
as the location for a sea-level
canal.
Havana's Prensa Latina
calls the announcement "black-
mail" against the Panamanian
peoples' aspirations for a fair
canal treaty and uses selected
quotes from media in non-Commu-
nist countries in support of this
charge. The Moscow press also
raised the charge of blackmail
and said the US did not plan to
give up any of its privileges
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Western Hemisphere
Argentina's Peronists have
so far failed in their attempts
to foment widespread unrest.
Despite scattered outbreaks of
terrorist activity in which at
least two persons were killed
and a number of bombings oc-
curred, the Peronist-directed
two-day general strike on 17 and
18 December did not attract mass
support and had virtually col-
lapsed by the middle of the
second day. On the first day
the politically motivated strike
was not more than 60 percent ef-
fective in industry--the sector of
greatest Peronist strength. Heavy
police security forces, generally
acting with restraint, were no-
tably thorough in preventing in-
cipient demonstrations and riots.
A general rally scheduled
as part of strike activity for
18 December was postponed. The
police had stated that the rally
would be suppressed with force
and, earlier, had arrested a
number of key Peronist labor
leaders to keep them out of ac-
tion. A new date for the rally,
now known as the "silent march,"
is expected to be set this week.
The four top Peronist lead-
ers who came to Paraguay from
Madrid last week arrived in
Buenos Aires on 21 December.
One of them, Andres Framini, was
arrested briefly on charges stem-
ming from a three-month-old in-
dictment in connection with il-
legal labor activities but was
released within an hour. Thus
far police have not interfered
with the others.
Brazil is considering re-
taliating against Uruguay for
its failure to restrict the
activities of Brazilian exiles.
Uruguay has agreed to certain
minor precautions, but so far
has not responded to demands
for internment of exile leader
Leonel Brizola and expulsion
of several other extremists. Bra-
zilian officials are disturbed
by reports that Brizola and others
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are trying to organize a ter-
rorist movement.
Adding to the growing
strain in relations between the
two countries is Brazil's con-
cern over signs of political de-
terioration in Uruguay. Castello
Branco recently criticized Uru-
guay's National Council as
"very weak and overly afraid
of Communists." He stated that
Brazilian representatives in
Uruguay are keeping a close
watch on internal conditions
there and implied strongly that
he expects basic political
changes will occur in the near
future.
25X1
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