WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008900050001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 21, 2016
• Document Release Date: September 17, 2008
• Sequence Number: 1
• Publication Date: July 23, 1971
• Content Type: SUMMARY

Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
DIRECTORATE OF
INTELLIGENCE
Secret
WEEKLY SUMMARY
Secret
State Dept. review completed
23 July 1971
No. 0380/71
Copy
Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
 25X1 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
.CONTENTS
(Information; as of noon EDT, 22 July 1971)
FAR EAST
Sino-US Communique Draws Support, Surprise, and Concern . . . . . . . . . 1
Indochina
Vietnam: A One-Man Race? . . . . . . . . .. . . . . . . . . . . 3
Cambodia: The Economy Improves . . . . . . . . . . . . . . . . 4
Laos: Going Gets Tougher in the Plaine . 4
Communist China: Foreign Trade Contacts Expanding 7
Election Reverberations in Indonesia . . . . . . . . . . . . . . . . . . 8
EUROPE
SALT: Some Soviets Are Still Suspicious . . ...... . . . . . . . . . . . . . . 9
UK-Malta: No Basis for Agreement in Sight . . . . . . . . . . . . . . . 10
Portugal: Caetano Wins Modest Constitutional-'Revisions . . . . . . . . . . . 12
Bulgaria: New Government, Old Faces . 12
MIDDLE EAST - AFRICA
r
Sudan: Numayri Ousted by Junta . . . . . . . . . . . . . . . . . . 14
Jordan: All Over but the Shouting? . . . . . . ' . . . . . . . . . . . . 15
Palestinians: Old Wine in New Bottles . . . . . . . . . . . . . . . . . 16
Persian Gulf Federation: Nine,%Eight, Seven, Six ... . . . . . . . . . . . . . 17
Developments in Pakistan . . . . . . . . . . . . . . . . . . . . . . 18
Yemen (Sana): Fiscal Crisis,Leads to Government Change . .. . . . . . . . . 19
WESTERN HEMISPHERE
Panama: The Government Puts Up a Smoke Screen . . . . . . . . . . . . 20
Caribbean: Another Futile Attempt at Regional Cooperation . . . . . . . . . 21
Brazilian Government Concerned Over Territorial Seas Problem . . . . . . . . . 23
Uruguay: Opposition Attempts Impeachment of the President . . . . . . . . 23
Argentina: Political Progress Doubtful . . . . . . . . . . . . . . . . . 24
NOTES: Burma; Hungary-Romania; Iceland; Romania; Austria; Chile; 25X1
Bahamas
SECRET
Page i WEEKLY SUMMARY 23 Jul 71
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
FAR EAST
Sino-US Communique Draws Support, Surprise, and Concern
Communist China's reaction to the planned
visit by President Nixon seems calculated to con-
vey the impression that Peking's effort to nor-
malize relations has not been accompanied by a
fundamental reassessment of its basic policy posi-
tions. The Chinese have moved in deliberate
fashion to put the developments in Sino-US rela-
tions in perspective by reaffirming their tradi-
tional position on sensitive bilateral issues while
attempting to assuage Hanoi's misgivings over
China's future course in Indochina.
In a widely publicized session with a group
of visiting American scholars, Premier Chou En-lai
emphasized that the US military presence in Indo-
china, American commitments to Taiwan, and US
military actions elsewhere on China's periphery in
East Asia were still the chief obstacles in Sino-US
relations. After reaffirming China's total support
for the Vietnamese Communists' seven-point
peace proposal, Chou reportedly insisted on a
total allied withdrawal from all of Indochina,
stating that this step was even more imperative
than the restoration of Sino-US relations. Chou's
emphasis on this point and Peking's failure to
rebroadcast the hard-hitting Nhan Dan editorial
of 19 July reflect the Chinese sensitivity to
Hanoi's recently voiced concern over big power
"collusion" at its expense.
In a related development, the Chinese used
the occasion of the 17th anniversary of the
Geneva accords to further underscore their back-
ing for Hanoi's latest peace plan. In an authorita-
tive editorial of 19 July, the Chinese praised the
seven points as the "correct course," and criti-
cized the US for making no positive response. The
editorial also claimed that the Geneva agreements
marked "a great achievement" for the Vietnam-
ese, but were undermined later by US actions.
This statement marked the most compli-
mentary Chinese public pronouncement on the
agreements since the start of the Paris peace talks
in 1968, and was the first time Peking has com-
memorated the Geneva anniversary in several
years. It could be related to recent suggestions
from diplomatic and press sources that China is
willing to participate in a new international con-
ference on Indochina.
The Vietnamese Communists have displayed
deep misgivings over the Vietnam implications of
the Sino-American developments. Hanoi remained
silent for three days following the announcements
and then produced a series of hard-hitting press
commentaries which bitterly attacked US policy
in Indochina and struck out at the wisdom and
propriety of Peking's actions in remarkably frank
terms. Although the articles made no direct men-
tion of China, Dr. Kissinger's trip to Peking or
President Nixon's coming visit, they sharply criti-
cized "socialist" countries that respond to US
entreaties, fall in with the Nixon doctrine, and
compromise "socialist solidarity.- These senti-
ments were given further weight and even greater
explicitness by a Foreign Ministry statement of
21 July, which with unprecedented directness ex-
pressed Hanoi's fear that Washington was trying
to "sow divisions among the socialist countries"
in an effort to wring concessions out of the North
Vietnamese.
SECRET
Page 1 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
The articles and the official statement made
it clear that the Vietnamese Communists intend
to resist such outside pressures, and will not be
bound by pacts or arrangements concluded
behind their backs. They strongly imply that if
worst comes to worst the Vietnamese are
prepared to go it alone.
This kind of explicit, blunt language-
unmatched even in the late 1960s when Hanoi fell
out with Peking over the cultural revolution and
over the issue of negotiations with the US-
reflects long-standing Vietnamese distrust of Pe-
king's intentions in Indochina. Hanoi may fear
that Vietnamese Communist interests could be-
come enmeshed in big-power politics as they were
in 1954, although the Vietnamese probably cal-
culate that Chinese believe that it can best put to
rest any notions by the Chinese that Vietnamese
Communist interests can be sacrificed to their
own by forcefully and quickly weighing in with
the Vietnamese view. Hanoi may also hope to
make it clear that Washington cannot count on
relaxed tensions with Peking to lead Hanoi into
compromises it would not otherwise make.
The commentaries convey an implicit con-
cern that the Sino-American announcement
took the play away from the Viet Cong seven
points and removed a good deal of the pres-
sure on the US generated by that proposal.
Hanoi may hope that its sharp and categorical
reaction will help restore some of this pressure.
Saigon, Phnom Penh, and Vientiane
greeted the Sino-US developments favorably for
the most part, although there was concern in
some quarters that a Sino-American rap-
prochement might have a prejudicial impact on
national interests in Indochina. Some Cam-
bodians fear that any big power peacemaking
could result in a de facto partition of their
country, or even the return of Sihanouk to
power. The Lao, on the other hand, have been
pushing for an improvement in relations with
Peking and hope that China will someday exert
a restraining hand on Hanoi's ambitions in
Indochina. In Bangkok, the US initiative will
strengthen the hand of Foreign Minister
Thanat, who has been arguing in favor of a
more flexible foreign policy.
There is little authoritative comment from
Moscow. The Soviets are likely to view the
President's planned trip as a Chinese-American
attempt to gain leverage for extracting con-
cessions from the USSR. The projected visit is
unlikely to have any immediate impact on
Moscow's negotiations with Washington and Pe-
king, but initially the Soviets may feel a need
to demonstrate that the USSR cannot be
blackmailed by pressures arising from Sino-US
cooperation. Nevertheless, Soviet apprehension
about meaningful US-Chinese collaboration
seems sure to intensify, and in the longer run,
this fear may lead Moscow to be more forth-
coming in its dealings with either or both of
SECRET
Page 2 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
SECRET
Indochina
i
Vietnam? to One-Man Race?
With the deadline for filing only/two weeks
away there is still nofirm oppositio{to President
Thieu`\Big Minh, Thieu's stronges7potential chal-
lenger, will apparently qualify with ease but is
showing a~great reluctance to run if the odds seem
to be stacked too severely against him. Moreover,
Minh is not `getting'all the help he expected from
the An Quangs Buddhists /who are backing him
behind the scenes but rare not endorsing him
openly. Big Minh\s still actively preparing for the
campaign, however ar5d has invited Dr. Ho Van
Minh, a highly respected Catholic moderate, to
join his ticket. Dr.r Minh will probably accept,
although he has voiced'fears that his own political
future may be Aamaged' by slurs and pressures
from the gove~ menf.
Vice President Ky's chances-while never
good-are ow even dimmer..Ky's arrangement
with Big Minh to draw endorsements from Minh's
sympathizers on the, provincial councils seems to
have been effectively countered by, Thieu's con-
trol o/the provincial administrations\Some coun-
cilors/are now demanding money for their en-
dorsements, while a number of Minh'ssother fol-
lowers are proving reluctant to su ort K s
nomination. As of 20 July,
The increasing talk about corruption and
trafficking in narcotics is bringing discredit to the
military command and the Thieu government.
Trading charges of corruption has long been a
favorite tactic of feuding South Vietnamese gen-
erals and politicians, but recent accusations are
the most wide-ranging in years and have impli-
cated Thieu and Ky themselves, along with other
high-level figures. Coming while the Lower House
and presidential campaigns are heating up, the
new charges have focused attention on corruption
as an issue on which the Thieu regime could be
vulnerable.
25X1
Although sharply denying the recent
charges, Thieu generally has tried to remain aloof
from the controversy. He has kept his former
protege, MR-2 commander General Dzu, at arms
length since Dzu has come under heavy fire for
his alleged involvement in the drug trade. Even if
Thieu succeeds in dissociating himself from Dzu,
however, the allegations can be exploited by
those who contend that Thieu has been presiding
over a corrupt and unworthy regime.
The facts behind any corruption charges in
South Vietnam are extremely difficult to ascer-
tain. Dzu has frequently been accused of various
irregular practices: selling ARVN promotions;
smuggling surplus war materiel; and accepting
bribes. He has not, however, been convicted and
reports linking him with the drug trade have not
been substantiated.
The absence of a reliable and effective in-
vestigative body concerned with corruption
makes it difficult to distinguish valid accusations
from "poison-pen" letters prompted by feuds. A
Senate subcommittee has begun an investigation
into General Dzu's activities, but the mounting
pressures of the current election campaigns will
make an objective probe at this time unlikely.
The immediate question raiised by the new
round of charges is whether Thieu's opponents
can turn it to their own political advantage. If an
antigovernment candidate is to ,profit from this,
he must convince a skeptical public that he is
more honest and worthy. Big Minh does have a
reputation for honesty, and he and candidates
associated with him may pick up some strength
from a protest vote over corruption.
SECRET
Page 3
Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
SECRET
Cambodia: The Economy Improves
After several weeks of steady deterioration,
the economic situation has finally begun to show
improvement. The upswing was especially wel-
come in Phnom Penh because it coincided with
the government's effort to obtain National As-
sembly backing for an economic mobilization
program that incorporates anti-inflationary rec-
ommendations made by the International Mone-
tary Fund.
The rice crisis in the capital has eased some-
what, as first-quality rice transported by govern-
ment-organized truck convoys from Battambang
Province is once again available on the open mar-
ket. Commodity prices have been relatively stable
during the past week. At the same time, the black
market value of the riel has strengthened substan-
tially. The price of a US dollar, for example, fell
from 360 riels on 13 July to only 260 riels six
days later.
The strengthening of the riel has been at-
tributed to a decline in demand for dollars and
gold by local merchants and businessmen who are
anxious to participate in the US AID program. In
order to do so, they are required to deposit from
50 to 80 percent of the purchase price in riels.
Of perhaps equal importance in explaining
the sudden shift in attitudes, however, are the
rumors in the Phnom Penh business community
that the proposed Exchange Support Fund (ESF)
will initially support an exchange rate within the
range of 110 to 240 riels per US dollar. However,
the ESF's establishment is still far from certain,
and will depend on as yet uncommitted contribu-
tions from friendly countries.
Sirik Matak and several key cabinet ministers
reportedly had a useful exchange on economic
matters recently with National Assembly leaders.
The meeting marked the first serious effort the
Lon Nol government has made to consult with
the Assembly in many months. Matak outlined
the government's stabilization program, stressed
the need to raise taxes to combat inflation, and
urged closer cooperation with Saigon and Bang-
kok in order to cut revenue losses due to smug-
gling.
Matak also indicated that he would need the
assembly's help in obtaining another advance
from the Cambodian National Bank to cover an-
ticipated budget deficits. He sought to reassure
the fiscally conservative legislators, however, that
the drain on the bank would be compensated by
the proposed ESF, and by increased revenues
from proposed tax hikes. Matak urged great
secrecy in discussing the advance, which will soon
be put before a closed session of the assembly, in
order to avoid possible public panic.
Matak's meeting with the assembly gave the
deputies a sense of participation in the country's
affairs and helped dissipate the view that the
legislature is held in low regard by the govern-
ment. Their improved outlook should help Matak
get his economic program through with a mini-
mum of trouble.
Laos: Going Gets Tougher in the Plaine
Government forces are encountering stiffer
enemy resistance in the Plaine des Jarres area.
Since 13 July North Vietnamese units have at-
tacked and overrun several advanced positions
held by the government on the eastern edge of
the Plaine. An attack on 17 July was supported
by two tanks that had been operating in the area
for several days.
Vang Pao's forces, in turn, have launched
their own operations north of the Plaine. On 16
July two irregular battalions pushed into the foot-
hills north of Route 7, but suffered a setback on
19 July when an enemy attack dispersed the
irregulars. Another government force is moving
southeast from its base at Bouam Long, evidently
25X1
Page 4
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
LAOS: PLAINE DES JARRES AREA
0 Miles 10
O Government-held location
OCommunist-held location
Phou KengA)
Irregular positions'
,PLAIN,#`
Ban No-
`e
SECRET'
Bouam Longo
Page 5 WEEKLY SUMMARY 23 Jul 71
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
ong Tieng
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
with the intention of cutting Routes 7 and 71 and
thus effectively isolating scattered Communist
forces to the west of the Plaine.
The North Vietnamese, meanwhile, have
condemned the government's occupation of the
Plaine. Hanoi's authoritative party and army
newspapers asserted on 15 July that Vang Pao's
actions had created a "grave" situation in north
Laos and the articles threatened "appropriate"
Communist countermeasures. The articles still re-
ferred to Communist proposals for a Laos peace
settlement, however, and the tone and substance
of their commentaries were similar to those issued
during Vang Pao's offensive in the Plaine in
Page 6
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
SECRET
Communist\China:
Foreign Trade Contacts Expanding
Building on the momentum generated at the
Canton .,trade fair last spring, Peking is further
developing-.,its commercial contacts with for-
eigners. With more than a 30-percent increase in
trade last year, ' Japan continues to be China's
most important trading-partner by a wide margin.
This jump as well as recent Chinese overtures
toward Canada and the relaxation of restrictions
last month by the US on trade with Peking have
again sparked world interest in China as a market
if not as a supplier. A continued expansion of
Sino - free world trade is likely under Peking's
present policies, with the rate of growth being
determined by the range and acceptability of
products that the Chinese can offer in exchange
for goods they want to buy.
Although precise` data are lacking, a record,
level of business probably was conducted at the
spring trade fair. In contrast to last autumn's fair,
the Chinese sought to buy substantial quantities
of steel, machine tools, transportation equipment,
and chemical products. In,return, they offered an
adequate supply of their traditional raw'"materials,
food products and light industrial goods. These
developments suggest that Peking's.non-Commu-
nist trade this year will surpass the'"total of almost
$3.4 billion registered in 1970.:Unlike last year,
however, when Chinese imports accounted for
most of Peking's rise in trade'with the free world,
Chinese exports probably .will be slightly greater
than imports this year.
As in the political sphere, the Chinese have
recently indicated that they will welcome an ex-
pansion of indirect trade with the US. The Tai-
wan issue continues to preclude direct commer-
cial exchanges, but Peking already has approved
contracts involving foreign subsidiaries of US
firms. China also is prepared to deal with US
suppliers and customers through intermediaries as
long as Pekii g is not officially informed of the
firms' US con\iections. Even thourgh a small num-
ber of US businessmen may j allowed to attend
the Canton fair this fall, ).t is still questionable
whether they will be perp?itted to engage in trade.
If the growth in Sino-US trade is still a
matter for the future, exchanges with Canada this
year are likelyjto experience the greatest rate of
increase among Peking's trading partners in the
free worjd. In the wake of extending diplomatic
recognition to Peking, an economic mission from
Ottawa was given the "east-is-red" carpet treat-
ment in Peking last month. China indicated it is
ready to step up its' imports of a wide range of
y Canadian products, including wheat, which
Peking will buy first from Canada when imports
are required. Italian trade promotion efforts, on
the other hand, have yet to be so rewarded
despite. Rome's recognition of Peking last No-
vember.
China is broadening its trade contacts in
the underdeveloped countries on a selective
basis, using the criterion of diplomatic rec-
ognition to narrow t;the field. In view of such
considerations as product quality and pro-
tectionist sentiment in the developed countries,
however, China's best hope for selling its light
industrial commodities and consumer goods
abroad is in the third world.tiAlthough sales in
these markets will continue\to grow, such
contracts are unlikely to expand rapidly
enough to obviate the need to wrestle with the
basic foreign trade problem, which is how to
increase hard currency earnings to pay for
manufactures and technology from the indus-
trialized free world'
SECRET
Page 7 WEEKLY SUMMARY 23 Jul 71
Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
SECRET
Election Reverberations in Indonesia
The government's party, Sekber Golkar,
continues to improve on its already substantial
victory in the 3 July parliamentary elections as
the long process of official vote counting
continues. The latest projection of Golkar's
strength is 232 of the 360 elected seats. These
232, with the additional 100 appointed members,
would give the government a basic strength of 72
percent in the 460-seat parliament. It could ex-
pect further support from the minor parties.
Although the traditional political parties lost
heavily in the election, they appear unlikely to
protest the voting. Elements in two of the major
parties, the traditionalist Moslem Nahdatul Ulama
and the secular National Party, contending that
the government improperly influenced the elec-
tion, have urged nonparticipation in parliament.
Cooler heads are prevailing, however, and it is
anticipated that all parties will take their assigned
seats in October, salvaging what they can in the
new political situation.
With a substantial majority in the legislature,
the government, which has few constitutional re-
strictions, may now decide that legislation can be
enacted if it wins only a large majority-perhaps
as much as three fourths-of the vote. In the past,
the government required that legislation receive
unanimous support in the parliament before pas-
sage. Such a change obviously could speed up the
government's administrative process.
With elections out of the way, the govern-
ment has begun the reorganization of its quasi-
party, Sekber Golkar. An army-affiliated coalition
of occupation and social groups, Golkar was
developed as an election vehicle. If it is to become
more than a government front-or if it is to be
credible and effective in that role-the present
hodgepodge of organizations which make it up
must be restructured. So far a "leadership
council" and an "advisory council," both of
which include a number of civilians, have been
established, and Golkar's some 250 organizations
have been grouped under five functional cate-
gories.
BURMA: In a further step toward, creating the
appearance of a return to normality\in Burmese
political life, General Ne Win on 15 July named
himself prime minister and reappointed he entire
army-staffed cabinet to the "new" Go ernment
of the Union of Burma; the word "revolu 'onary"
has been dropped from the government's fficial
title. It is not clear whether the cabine will
assume the policy-making functons of the ru g
Revolutionary Council which c ntinues in being,
with Ne Win as its chairman. These changes,
which come on the heels of the restructuring of
the government's Burma Socialist Program Party
and the addition of some civilians to government
bodies, will not alter the army's predominant role
in Burma. They appear part of a process,
however, that includes the prospective writing of
a new state constitution and perhaps other steps
designed to give some semblance of civilian artic-
ipation.
Page 8
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A008900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
-EUROPE
SALT: Some Soviets Are Still Suspicious
Soviet press treatment of the Strategic Arms
Limitations Talks (SALT), which reconvened in
Helsinki on 8 July, suggests that Moscow is deter-
mined to press ahead for an interim accord, with
an ABM limitation continuing to be its major
concern. It also suggests that there are still some
in Moscow who have misgivings about the wisdom
of the Kremlin's course of action in the wake of
the US-Soviet announcement on 20 May of an
agreement to work for an ABM accord along with
some limitation of offensive systems.
disarmament that have taken a more strident
tone. The first casts doubt on IJS motives and
intentions, and the second dwells on continuing
US strategic arms improvements and the danger
of US forward based systems in Europe-a con-
tentious issue soft-pedaled by other Soviet publi-
cations since 20 May. The Red Star articles sug-
gest misgivings on the part of some in the Soviet
defense establishment for Moscow's present dis-
armament course.
A Pravda editorial that coincided with the
opening of the Helsinki talks took an unprece-
dentedly moderate and balanced tone. It noted
that there were signs of a positive shift toward
accommodation by both sides, and cited Brezh-
nev's speech on 11 June, which referred to the
"increasing significance" of the talks. An
Izvestiya article on 9 July stressed the optimism
accompanying the new round of negotiations.
Both items emphasized the need to press for ABM
limitation as a first priority. They also took the
standard swipe at those in the US allegedly oppos-
ing disarmament and pressing for new strategic
arms systems, but did so only as variations on the
main theme. Articles in less authoritative Soviet
journals, such as USA and New Times, have gen-
erally repeated the themes in the Pravda editorial.
A discordant note, however, has been
sounded in the military newspaper, Red Star,
which has run two articles of a promised series on
Moreover, an article in the June CPSU theo-
retical journal, Kommunist, painstakingly and
defensively justified Moscow's current disarma-
ment policy, going so far as to resurrect several
quotes from Lenin on the wisdom of dealing with
the US. The article attacked those who criticized
Moscow's policy "from the left," adding to the
impression that the Kremlin's current course of
action was not arrived at without some difficulty.
Soviet leaders, nevertheless, put great stress
on trying to convince the US of Moscow's serious
intentions. Premier Kosygin, h~a=conver_sation
with-US-representatives attending~t-he,sixth--Dart-
mouth-?-Conference" in Kievrged on 16 July
that SALT is "the focal point" of the US-Soviet
relationship and, if successful, could lead to the
solution of other problems. The Soviet premier
echoed a point in Brezhnev's 11 June speech by
claiming that if arms spending could only be
curtailed, the funds could be put to better use
elsewhere.
SECRET
Page 9 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO08900050001-1
SECRET
-Malta: No asis for Agreement in Sight
Rene tiation of t; e UK-Malta defense and
financial array' gements r mains in an uncertain
state following t ik~s in Valleta earlier this week
between Prime Ministgr Mi toff and British De-
fense Secretary Lord C'arri gton. Before leaving
for London, Carrington saJthat in his view "the
basis of any new agreem nt is,,not in sight" and
expressed concern "abo t the differences in our
two positions."
Mintoff presented ,Carrington with selec-
tion of various formulas offering specific rights
and facilities for specific lsums. Retention of Long
don's veto power over third country military use
of Malta's harbors and air ields was not ruled out,
provided the UK is willin? to pay forit. For his
part, Carrington made clea that Br-atsh interest in
Malta was based on NAT ? interests and not on
UK security needs. The Brtish deputy high com-
missioner told the US.: Embassy that the British
would not pay more for tlje use of fewer military
facilities; therefore, if NATO wants to keep
Malta, it will have to help Ipay the rent."
London has told NATO that the facilities
likely to be available to the UK under a new
,agreement would not justify any increase in pay-
ment. It has pointed out,lhowever, that the pre-
vention of a Soviet presence on the island is
important not jist to the British, but t II of
NATO. The allie', have not yet respo d to the
UK's request for, financial assis ce. London
West Germany
as the most likely sou'ices o ignificant assistance.
Mintoff's decis' n to terminate Valleta's ties
with NATO h~/been made public. Even usu-
ally well- rm Labor party supporters and
senior ~~evernm nt officials are completely un-
aware -of Mintoff's initiative. Public silence on his
NATO decree f Ilows a pattern set in Mintoff's
-"other major init atives. If NATO or one of the
N flies should brea this silence, it is likely to anger
Mir.q,off and furth' r complicate Western relations
with Malta.
On the. economic front, Mintoff has ap-
pealed to several Western nations for assistance
and has moved to