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June 1, 1973
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Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Iq Next 2 Page(s) In Document Denied State Dept. review completed Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Secret WEEKLY SUMMARY Secret 1 June 1973 No. 0372/73 Copy N9 45 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 The WEEKLY SU-MMA RY, issued every Friday morning by the Office of Current Intelligence, reports and analyzes signif icant developments of the week rough, noon on Thursday. It frerfuently it Ludes material coordi ated with or prepared by the Office of Economic Research, the Off ice of Strategic Researc#i, and the Directorate ofScience and Technology. Topics requiring more comprehensive treatment and there- fore published separately as Special Reports are listed in the contents. CONTENTS (1 June 1973) 1 Vietnam: And Then There Were Three 3 International Money: Post-mortem 4 Argentina: Passing the Baton 6 Thailand: The Same Old Stand 6 Indochina: Cambodia; South Vietnam 9 Japan: Space Program Lags 10 The Germanies: Ostpolitik; Honecker 11 CEMA Tries to Expand 12 Iceland: Fire For Effect 13 USSR: Jewish Emigration 14 Europe: Closer to a Conference 14 Italy: Scramble for Power MIDDLE EAST AFRICA 16 Greece: All the King's Men 17 Jordan: In With the Old 17 Syria: Rare Election 18 India: "Indira Wave" Receding 19 OAU: Stormy Meeting WESTERN HEMISPHERE 20 Costa Rica: A Foreign Affair 21 Bolivia: Military Changes 22 Peru: An Overshadowing Problem 25X1 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SECRET AREMOV VIETNAM Ottawa has announced that it will withdraw from Ithe ICCS by the end of July. External Affairs Minister Sharp expressed the hope that the advance notice would give those interested time to find a successor and that the withdrawal would not have any significant impact on the peace in Vietnam. The decision is "firm and defi- nite," said Sharp, but the Canadians would be willing to return to Vietnam to help supervise any elections held under the Paris accord. The Vietnamese Communists may not be at all unhappy to see the Canadians go, particularly Canadian chief, Michel Gauvin, who has been vocal in his criticism of the obstructionist tactics of the commission's Communist members. Al- though Hanoi is almost certainly committed to the commission's continuation, the North Viet- namese will angle-for a less assertive replacement for the Canadians r fThe commission's effectiveness ultimately depends more on the attitudes of the parties to the Paris accord than on its own composition. The Viet Cong - Saigon two-party commission (to which the ICCS is supposed to report) has never gotten off the ground, and it has been an uphill battle for the peace-keeping machinery as a whole. The Poles and Hungarians continue to impede effective ICCS action, despite repeated assurances from Warsaw and Budapest that the commission can be made to work. The Canadian replacement will step into a very difficult situa- tion Canada's withdrawal from the ICCS high- lights the near-paralysis that has gripped the ICCS since its inception. This paralysis is likely to con- tinue unless some new understanding is reached with the Communists to make the body work. Explaining a "Victory" /The Vietnamese Communists have been sending out a variety of signals indicating that they intend to de-emphasize the fighting over the near term{ 5 Some of this comes through in a broad apologia for Hanoi's handling of the war and the negotiations, published recently in the party's theoretical journal. This candid article, which appeared in March, amounts to a defense of First Secretary Le Duan's policy of aggressive use of main-force tactics. A prominent theme of the article is that if Hanoi had not adopted these tactics, North Vietnam would have been invaded. Tracing the twists and turns of the early stages of the war, the author claims that the revolution in the late 1950s was "in danger of being repulsed." Alluding to the conflict raging at the time be- tween the advocates of lower level guerrilla war- fare and supporters of Le Duan's argument for a broad offensive, the article said "the problem was whether to take the offensive or withdraw. Our people chose to attack...." Explaining the ration- ale for the Tet offensive in 1968 in terms reflect- ing Le Duan's line, the article says Hanoi felt that "major military efforts" could fprce the US to "de-escalate, if not end, the war." 5 [The Communists also admit that President Nixon's election and the "Americanization" of the war posed new problems. The article attri- butes final "victory" to the main-force offensive ICCS Helicopter Still on the ground SECRET Page 1 WEEKLY SUMMARY 1 Jun 73 WNW -1 -101 A VT WT-PSI Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SECRET _VMW that was launched in March 1972. The tone, how- ever, is unusually defensive. The Paris agreement is described as the "greatest victory we could win considering the actial balance of forces between us and the enemy." 3 fUp to now, Hanoi's propagandists have done little but complain about the various political and military pressures that brought Hanoi to the nego- tiating table. The new apologia for the regime's "correct" strategy over the years is overdue. So is the official scaling down of Communist objec- tives. The "victory" embodied in the Paris ac- cords is now interpreted as the withdrawal of US forces. With that "victory" in hand, the article implies that Hanoi intends temporarily to lay aside aggressive main force tactics in favor of more peaceful competition.) Smooth-stemmed Sago Page 2 SECRET Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 JGL F1 L I ?9?w *" INTERNATIONAL MONEY: POST-MORTEM -I- fhe international monetary system is being helped through its latest storm by the predomi- nance of floating exchange rates. Only minor ceri- ?? .21tral bank interventions have been needed to mairi- dollar borrowing, increased currency velocity could in the future contribute to large variations in exchange rates. J tain the joint European float, and the massive 12! [Confidence in the dollar has not yet been central bank dollar-support operations seen earlier restored. During the past week, the dollar's per- proved unnecessary. West European officials formance has been mixed, and the price of gold report that international trade has been less afJhas reached about $115 an ounce on foreign- fected by adjustments in the floating currencies exchange markets. Although the dollar strength- than had been anticipated.( ened last week following the announcement of a )11, Although the system has performed well, there is one new element that could intensify ,,future currency pressures. It appears that in the absence of central bank intervention, the velocity of currency turnover in the foreign-exchange mar- tions with only a small increase in currency hold- 41 tary Fund to draft a reform package, met again ings. There has been little movement in the Euro-? % `_last week, but there is no sign that they made any dollar interest rates, indicating that banks have had adequate funds to meet trader demand for dollars to buy gold or other currencies. By con- trast, when the dollar came under heavy pressure substantial progress toward agreement. The far from impressive performance of the committee so far and the relative stability of currency markets with the advent of widespread floating of cur- earlier funds in the year, speculative demand for bank rencies stron temporarily pushed the one-month Euro- early world gly suggest that monetary reform prospects program for are an re- dollar rate from about 6.25 percent to 10.5 per- ceding. 25X1 cent. By holding down the cost of speculative 25X1 SECRET Page 3 WEEKLY SUMMARY dramatic improvement in the US trade balance in April and the subsequent rally on the New York Stock Exchange, the dollar later fell to new low points relative to the joint float currencies in light trading. kets has increased substantially. The result was a I . `Deputies of the Committee of Twenty, the large increase in the volume of currency transact- sub-group established by the International Mone- Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SLUKL I MAW ARGENTINA is' (While police clashed with Peronist youth, ,, Hector Campora received the presidential sash and baton from outgoing president Lanusse. The I transfer officially marked Argentina's return to civilian rule after nearly seven years of relatively ineffectual government by the armed forces. Campora's inauguration speech set a nationalistic but basically moderate tone for the new Peronist government. Most of his cabinet members were drawn from the moderate wing of the Peronist Page 4 movement, although his first official acts were designed to please the more radical youth wing., /S he activities of high-level foreign guests drew almost as much attention as did those of President Campora. The inauguration afforded Secretary of State Rogers the opportunity to meet with Chilean President Allende and such other Latin American dignitaries as Foreign Minis- ter Tack of Panama. Allende, who paid his re- spects to the outgoing government of General Lanusse as well as to the incoming Peronists, was SECRET WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 *RAW SECRET cheered by throngs of Argentines whenever he appeared. Cuban President Dorticos was accorded an even more enthusiastic reception. He visited two major provincial cities before leaving Argen- tina. Dorticos spoke at a ceremony commemo- rating the massive 1969 riots in Cordoba and, to the delight of the crowd, praised the memory of that Argentine-turned-Cuban, Che Guevara. ~gainst this background of high-powered foreign visitors, Campora set out to put his cam- paign promise of an "independent" foreign policy (1 into action. At his inauguration, he pledged his solidarity with "anti-imperialist struggles" around the world. Immediately after taking office, he re-established diplomatic relations with Cuba, took steps to establish relations with East Ger- many, and announced that relations with North Korea would follow soon./ ICampora's first official action on the do- mestic front was to grant presidential pardon to large numbers of "political prisoners." He was pushed into hasty action in part by the threat of mob attacks on the prisons and may come to regret the all-inclusiveness of his amnesty. As imprisoned labor leaders and convicted terrorists alike walked out of the prison gates, many of the freed Trotskyist guerrillas promised to continue the struggle. The special courts set up by the military to deal with subversion were abolished in a further move to break down the "repressive" structure set up by the armed forces. The law making t e Communist Party illegal was also abrogated ;' )With these actions as a sop to the radical w ing of Peronism, Campora installed a cabinet representative of the moderate and the labor wing of the movement. The new economic team, headed by Minister of Treasury and Finance Gelbard, promises little in the way of radical change, and most of the other appointees fall into the same category. The cabinet is totally Peronist, with other parties represented in second-level jobs. The politically important post of minister of social welfare was given to Juan Peron's private secretary, Jose Lopez Rega. Lopez Rega will probably serve as the conduit between Peron and Campora, and he is likely to emerge as the strongest member of the new government.] I 5 fro demonstrate his determination to control the military, Campora selected the most junior of Argentina's major generals, Jorge Raul Carcagno, 17 to be the new army commander. If custom is followed, his elevation will force into retirement the nine major generals senior to Carcagno and thus remove many of the strongest anti-Peronists in the armed forces. General Carcagno has built a reputation as a populist, but he is a thoroughly military man well-respected by his fellow officers. Although he will be more amenable to working with the Peronists than most of his colleagues, he will also be an effective spokesman for the mili- tary. He has already served notice that he will tolerate no efforts by the Peronists to politicize the army or to operate outside the chain of com- Peronist Crowds on Inauguration Day SECRET Page 5 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 NEW SECRET VAW p [The lack of any constitutional framework for an orderly transfer of power has vexed succes- sive governments in Bangkok, and the present one has again side-stepped the troublesome succession issue by extending for another year the military duties of both Prime Minister Thanom and army commander Praphat. Thanom's third extension in the largely ceremonial post of supreme com- mander of the armed forces has a direct bearing on control of the Thai Army-the key to political power in Bangkok. Thanom had announced last January that he would stay on as prime minister but would step down as supreme commander in August. He probably changed his mind at the urging of General Praphat. Had Thanom stepped down, Praphat would have come under strong pressure from the military to move upstairs as supreme commander and turn over command of the army to his deputy and rival, General Krit Sivara n~ [Now, the chances for Krit and other younger officers to move up the ladder have been stymied. The apparent beneficiary is the ambitious Colonel Narong, who is Thanom's son and Praphat's Bon- in-law. It is possible that Tiianom and Praphat decided to hang on because they could not agree on an immediate successor and wanted to give Narong more time to expand his power base. ~Z 3 IThis Thai version of the Alfonse and Gaston act means a continuation of the present conserva- tive approach to foreign and domestic policies. The most serious problem facing the government is the Communist-led insurgency. While the insur- gency has thus far been contained, its course over the long run will largely depend on Bangkok's ability to come to grips with fundamental eco- nomic problems such as the growing disparity in income between urban and rural areas. A signifi- cant weakness of the Thanom-Praphat leadership, however, is its apparent lack of interest in de- veloping and implementing the long-range eco- V-- 1 [The Khmer Communists are keeping up mn. tary activity in the Phnom Penh area, even though the rainy season is now under way. Last week, they started a new operation along the Mekong corridor near the government base at Neak Luong. Their effort to "liberate" Neak Luong has yet to gain much momentum, and the over-all level of military activity subsided during the week) (2.c1 IShellings and minor probes continue against government positions on both sides of the Me- kong near Neak Luong and around Prey Veng City to the northeast, but heavy air strikes have enabled the government troops to hold their ground and have complicated the Communists' logistics and manpower problems. Even if the nomic policies that could undercut the insurgents. The two leaders may believe, moreover, that the budding Thai relationship with Peking will solve this troublesome problem for them. SECRET Page 6 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SECRET NNW Khmer Communists Planning for action Communists do not overrun Neak Luong, they will still be able to harass resupply convoys on the Mekong IThe only bright spot for the government during the week was on Route 5, where Cam- bodian units broke the Communists' two-month- long hold over a section of that vital highway some 50 miles north of Phnom Penh. Several bridges along the road have been destroyed and must be repaired before Route 5 can be reopened to traffic,? i he Khmer Communists' nominal com- mander in chief, Prince Sihanouk, continues to take a hard line on the prospects for negotiations. Sihanouk, winding up a tour of a number of African countries, said again on 29 May that he would never negotiate with Lon Nol. He will discuss a peace settlement with the US and is prepared to establish diplomatic relations with Washington as soon as the US abandons "the traitors of Phnom Penh." Sihanouk protested that Cambodia is "not a satellite" of North Vietnam and insisted that the Cambodian problem be solved by Cambodians only 16 (In some parts of South Vietnam there are continuing signs that the Communists are deter- mined to use their military muscle to expand their holdings. Chuong Thien Province in the delta is one of these trouble spots. Although it has relatively few people, it is adjacent to im- portant Communist sanctuaries and supply routes from Cambodia. Since the start of the cease-fire, Chuong Thien has consistently borne the brunt of Communist military action in the delta#Govern- ment officials view the current level of action as a prelude to a Communist campaign to capture the whole province, but some US officials believe that the Communists will stick to their nibbling operations] ' % )Chuong Thien has some of the heaviest con- centrations of Communist combat units in the southern delta. These forces include three in- fantry regiments, elements of an artillery reg- iment and a sapper group, along with the senior command of the Communist forces in the south- ern delta./ r7 bn the government side, the South Vietna- mese 21st Division has the responsibility for Chuong Thien Province. Two regiments of the division, supported by two Ranger battalions, have been given the job of disrupting the infil- tration of Communist personnel and supplies into and through the province.'/ 1\t present, government control is restricted to the areas immediately surrounding the district and province capitals. Much of the rest of the province has been in effect ceded to the CiCommunists.1tommunist attacks, consisting for the most part of mortar and rocket fire are keeping the South Vietnamese defenders close to their bases and outposts. SECRET Page 7 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 I%W SECRET Japanese launch scientific satellite, September 1971. Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 -ftw SECRET "Of JAPAN: SPACE PROGRAM LAGS 'Controversy has arisen over the slow prog- ress and limited capabilities of Japan's space pro- gram. Critics in both government and industry see t3 Tokyo's reliance on domestic efforts to develop a three-stage space launch vehicle as the major problem. Although the Japanese are acquiring US technical assistance, including a Thor-Delta first stage, for the development of a booster, the Japanese vehicle will be able to put only a 250-pound payload into synchronous orbit. This capability would not be sufficient to launch corn- munications satellites to meet Japan's domestic requirements} 'Critics of the space program, especially in the Japanese Ministry of Communications, argue that a 650-pound communications satellite is needed by 1976 to meet these requirements. The critics claim that Tokyo should end its efforts to develop a Japanese space launcher and purchase one from the US. For this purpose, the ministry has asked for a greatly increased space budget over the next several years} The government's space activities commit- tee, 'which oversees the program, is reluctant to reduce Japanese efforts to develop an indepen- dent space program. Instead, it has undertaken an extensive review of the program. It has approved a space budget for 1973 of 36,679 million yen (about $140 million), roughly a 50-percent in- crease over 1972. This increase still does not reach the level considered necessary by critics of the program.' The results of the review are to be an- nounced later this year,. The committee is likely to recommend some additional increases in for- eign technical assistance, while encouraging the continued development of a domestic space capa- bility. Tokyo may eventually be forced, however, to take the alternative course-greatly increased reliance on the US or other foreign countries. Japanese officials are already thinking of asking the US to launch a 550-pound weather satellite for international use that will be ready in SECRET Page 9 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SECRET Assuming that the treaty's ratification would be completed by early June, the two German states-in conjunction with the US, USSR, UK, and France-had planned to apply for UN membership in July. Now the Brandt government will have to decide whether to adhere to its long- argued position that a ratified inter-German treaty must precede UN membership. Court re- view will also rekindle suspicions in East Berlin and perhaps Moscow about the ability of the Brandt government to deliver on detente.) Sg hancellor Brandt's Ostpolitik got mixed re- viewtthis week. On the plus side, West German and Czechoslovak negotiators finally announced completion of a draft treaty normalizing rela- tions. This long-awaited good news paled in the face of a challenge to the inter-German basic treaty on constitutional grounds.( > The Czechoslovak treaty was the final hurdle in Brandt's campaign of reconciliation with Ger- many's World War II enemies to the east. The treaty opens the way for diplomatic relations with Hungary and Bulgaria. The absence of any great historical problems obviates the need for 3r1 special treaties with these countries, but there is some question, at least in Bonn, whether Moscow may ask Budapest and Sofia to hold back until Bonn ratifies its pacts with Prague and Pankow.? .f (Soviet caution would be understandable, given the surprise decision of the conservative Bavarian government to seek a court ruling on the East German treaty. The court decided on 29 May to hear the case. It will begin deliberations on 19 June, and is expected to hand down its ruling on 31 July. At the same time, the court rejected another Bavarian challenge questioning the objectivity of one of the justices, and put off until 4 June a ruling on the Bavarian request that )+d [After two years at the top, First Secretary Erich Honecker is in firm control of the ruling Socialist Unity Party of East Germany. He has 'ff made no sudden personnel changes, but has care- fully placed his supporters in key government and party positions. At this time, there appears to be no one on the East German scene who can chal- lenge his primacy. Under the unblinking Soviet eye, however, Honecker-like his predecessor, Walter Ulbricht-must walk a thin line when engaged in foreign policy matters. Like Ulbricht again, Honecker has had but limited success in winning support from a skeptical populace) W IHonecker, in his early career, was co-founder and leader of the party's youth organization; he l t b Ulbri ht' h t h t i ti a er ecame c s c e man n ous ng a party dissidents and was then entrusted to head the Politburo's important cadre and security com- missions. In this role, he supervised the building of the Berlin Wall. Throughout his career, Honecker has demonstrated that he is strong on organization and administration and, more impor- tant, that he has an instinct for making friends in Moscow and for being on the winning side in important debates at home. Often referred to as "second secretary" by party functionaries in the 1960s, Honecker actually ran the party's day-to- day business. Thus, it came as no surprise that he succeeded Ulbricht as party boss in May 19711 President Heinemann be enjoined from signing Lll/ the treaty ratification legislation. This last step is a effort to take some of the heat off the court by putting it on Heinemann:] 3'? There is guarded optimism in Bonn that the court will find the treaty constitutional. The first chamber of the court, dominated by opposition- appointed justices, will debate the constitutional issue. It cannot be assumed, however, that opposi- tion-inclined justices will necessarily vote against the government, for a sizable element of the Christian Democratic Union no longer opposes the treaty. Several Christian Democrat state gov- ernments, for example, did not support Bavaria in its unsuccessful attempt last week to block the treaty in the upper house of parliamentll 37 Even the decision to hear the case, however, is a setback and an embarrassment for Brandt. IG [Nor is it surprising that Honecker has acted circumspectly since then. To maintain an air of stability and continuity, he has avoided abrupt departures from the ways of the old regime. He has moved slowly to broaden his political base by placing loyal supporters in key positions. SECRET Page 10 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 '"M 5tUKt I % (separation from West Germany) and regards with skepticism most of the regime's other policies. Popularity, however, is not a prerequisite for re- maining in power. Unless Honecker makes some move that arouses Soviet ire, he will remain the boss for some time to come. 1?~.~- (The European Communist countries, in an effort to strengthen economic relations, are en- `T couraging certain non-Communist countries to establish ties with the Council for Mutual Eco- nomic Assistance. In mid-May, Finland became the first non-Communist country to sign a co- operation agreement with CEMA, and Iraq is talk- ing about it.1 Honecker has dealt with possible contenders not by ousting them but by assigning them new responsibilities that take up their time and energies. He has permiitted considerable intra- party give and take in policy formulation, but he has carefully kept final decision-making in his own hands. The 61-year-old Honecker made good use of his long apprenticeship in sensitive posi- tions, and he and the party-government apparatus have adapted easily to each other. t- Honecker does have problems. East German and Soviet interests do not always coincide, par- ticularly on West Germany. He has not resisted Moscow as often or as stubbornly as Ulbricht, but the Soviets have been able to extract only reluc- tant agreement from him to be more accom- modating to Bonn. Honecker knows that he needs Moscow's approval to remain in power, and so he tries to mimimize frictions in representing East German interests. His method has worked. Two weeks ago, Brezhnev lavished high praise on Honecker and gave him the Order of Lenin (fir, Honecker has had no more success than his predecessor in winning real support. The East German populace particularly resents Abgrenzung, Page 11 ,14 )These developments follow a decision last month to establish a $1.3-billion fund to provide economic and technical aid for the developing countries. The fund, which will go into operation next January, will provide 15-year untied credits in transferable rubles and hard currencies. This is in addition to $900 million in credits now made available annually to developing countries by individual CEMA members; these are tied to pur- chases in the donor country.] i4b (CEMA was set up in 1949 at Moscow's behest to increase economic specialization and to coordinate the economic policies of the members. In addition to the Warsaw Pact countries, Mon- golia and Cuba are full members, and Yugoslavia, North Korea, and North Vietnam are observers. Moscow's attempts to widen the organization probably reflect the need to expand sources of energy supplies, particularly for the East Euro- peans. These countries may also be anxious to obtain raw materials, consumer goods, and labor./ l ~ [Iraq has marketed some oil in the USSR and Eastern Europe and may have hoped to sell more. Demand for Iraqi oil has been rising in the West following the settlement with the Western-owned Iraqi Petroleum Company. As a result, Iraqi co operation with CEMA may now offer less than when Baghdad first sought observer status in SECRET Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 ICELAND SECRET ?-~ f fhe reaction in Iceland to the introduction of British warships into the "cod war" has been severe. On 24 May, an angry crowd broke win- dows in the British Embassy, and two days later, an Icelandic patrol boat turned its deck gun on a British trawler. There were no injuries in either incident:] fteland was trying to build up special pres- sures on the US and NATO to force the British to withdraw before the French-US summit meeting in Reykjavik. The effort failed, but the damage to US-Icelandic relations, particularly Reykjavik's at- titude toward retention of the NATO base at Keflavik, has been considerable. Icelandic leaders of all parties now risk political oblivion by sup- porting retention of the base, and the original price, which was expected to consist of only slight modifications to the base agreement, has probably gone up. One government spokesman mentioned a rental fee of $80 million annually, but the prime minister said he would not permit a "Malta-like" arrangement for Iceland.] Under its terms renegotiation must begin within six months; if no agreement is reached, either party can give notice of intent to terminate the agreement within twelve months. Agustsson's move may provide time for Icelandic emotions over the fishing issue to cool before base negotia- tions must be concluded./ [The situation on the fishing banks is a stale- ate. r The British trawler fleet continues to oper- ate inside the 50-mile limit. The ships are divided into two "packs," each guarded by a Royal Navy frigate and two support ships. Trawlers that stray from the packs are subject to fine by the British trawlermen's association. The four Icelandic patrol craft continue to watch for unprotected trawlers to capture and arrest.? :O, NATO proposed on 29 May that the British withdraw the warships in return for a guarantee that Iceland cease harassing the trawlers. Secre- tary General Luns offered the plan to bring both parties back to the negotiating table. Such a scheme would permit the British to continue to fish, and the Icelanders are in no mood to com- promise on that score.fReykjavik has rejected any Foreign Minister Agustsson announced that') j sort of mediation by third parties, but has not yet his government would invoke Article VII of the base treaty on 14 June at the NATO ministerial meeting in Copenhagen. This will start the clock provided for in the treaty's termination clause. Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 responded to Luns' proposal, which concerns only the use of naval forces, not the details of a compromise agreement. 25X1 25X1 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 SECRET USSR: JEWISH EMIGRATION fSoviet Jews are leaving for Israel this year at a rate of nearly 2,600 per month, a pace closely %matching that of 1972. The suspension of the education tax last March has had no effect on the over-all rate, but there has been an increase in the proportion of better educated emigrants. Emigra- tion from Moscow and Leningrad--cities with rel- atively well-educated Jewish populations-is cur- rently more than triple the pre-suspension rate/ t, Non-financial obstacles still bar Jewish erw- gration, however, and there is no sign that the Soviets are prepared to relax these internal con- week that those who hoped to use the summit to extract concessions from the USSR on the emi- gration issue would be sorely mistaken. Jewish activists have been complaining to the US Em- bassy in Moscow of increased repressive measures and exit refusals.] Jewish Emigration from the USSR, 1972-73 January 2,275 2,731 February 2,025 2,407 March 2,777 2,555 April 2,110 2,689 May 2,669 June 3,332 July 2,065 August 2,197 September 2,059 October 3,545 November 3,546 December 2,813 lThe Soviets are, of course, sensitive to the connection between Jewish emigration and US- Soviet relations. They have held open the possi- bility that, through no fault of theirs, the rate of emigration may decline later in the year. Early last month in a meeting with New York Mayor Lindsay, Deputy Minister of Internal Affairs Shumilin claimed that the number of new appli- cants for emigration to Israel had declined during the past two months., _;2f fAs an earnest of improved relations with ~S,Washington, Moscow may be preparing to grant exit permission to several score Soviets, many of them Jewish, who have for some time been trying unsuccessfully to emigrate to the US. In the past, only about 20 percent of those on US lists of Soviet citizens wishing to emigrate have received permission to leave. Last week, however, a Soviet official confided that "appropriate circles" had made a decision "in principle" to grant exit per- mission to "most" people on the new US list. He said that final decisions on individual cases would be taken in early June. Such a gesture, if it is made, would be timed to improve the atmosphere for Brezhnev's visit. SECRET Page 13 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 %MW 5L(.;KI I (o/ he preparatory talks for the Conference on Secu ity and Cooperation in Europe, which began last November, have cleared the way for the open- ~Ping of the first stage of the conference itself. This will take the form of a foreign ministers' meeting in Helsinki in late June or early July-7 frhe principal business in recent weeks has been to draft negotiating "mandates" for the four main agenda topics: security, economic coopera- tion, human contacts, and follow-up machinery. These mandates, if approved by the foreign minis- ters, would guide the commissions that would eventually prepare the agreements the conference would approve at a later date. V) ~oviet flexibility opened the way for prog- ress on the human contacts mandate, to which the West attaches importance. The Soviets had been holding out for a reference to "non-interfere ence in internal affairs," and such a formulation would have made it difficult to come up with meaningful measures to increase East-West con- tacts. The negotiators have now decided not to list specific principles in the human contacts man- date, but to refer instead to the principles listed in the security mandate] 60 [Most of the problems that had surrounded these security principles have been settled. The doctrine of the "inviolability of frontiers"-- perhaps the most important topic to the So- viets-is listed separately, as they have demanded. The principle of "non-use of force" is listed first, however, to satisfy the West Germans that "in- violability of frontiers" would not necessarily pre- vent the reunification of Germany by negotiated agreement at some future time, (" C, Although the economic cooperation man- date is incomplete, the unfinished parts probably will not be troublesome. Discussion of follow-up machinery has only begun, but the debate should not take long. The Soviets had insisted on lan- guage that would permit discussion of separate and permanent machinery, but they have recently seemed willing to settle for less.j e I there is one substantive issue-involving the security mandate-that could still cause problems. Page Some of the Western allies are insisting on "confi- dence-building measures" that would allow ob- servers at, and require advance notice of, "major military movements." While the Soviets do not oppose confidence-building measures across the board, they are adamantly opposed to so wide an application of therm 1v'bther than that, the main question mark confronting both the security conference and the force reduction talks is the linkage the Soviets are trying to impose on the two. They have stated that formal force reduction talks should not start until at least a month after all stages of the security conference have been completed. The West wants to hold Moscow to its previous agree- ment that force reduction talks would begin no later than the end of October, without reference to the security conference. Should the Soviets be difficult on this matter, the allies could retaliate by blocking the start of the first stage of the security conference, which the Soviets want very much. The allies would prefer not to have to do this. Many of them still attach some importance to a security conference as a vehicle for East-West detente and foresee some positive results for the West in the human contacts it may foster- ITALY: SCRAMBLE FOR POWER 7)- 1The Christian Democratic Party congress next week will go far to determine the future shape of the governing coalition. At issue are the fate of Prime Minister Andreotti's year-old cen- trist coalition and the possible revival of the Christian Democratic - Socialist collaboration that produced the center-left coalitions of 1963-1972] '7 )-'/Andreotti's fragile coalition of Christian Democrats, Social Democrats, and Liberals has run into serious trouble. The government's critics have been noisier, and Andreotti has sustained a record number of parliamentary defeats on sub- stantive issues. This week, the Republican Party- whose parliamentary support provides the SECRET Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 "_ SECRET _Nwe Major CHRISTIAN DEMOCRATIC the Republican rebuff pushed the Andreotti gov- 25X1 1969 Party Factions Delegates (Approximate percentage) ernment out onto very thin ice. Republican and coalition leaders have indicated a willingness to wait until after the congress. Cl /)L (The divided state of the Christian Democrats does not portend a clear resolution of the party's problems. The strength of the party's organized factions has remained relatively stable since the 3congress in 1969 with no single faction gaining a clear majority. As usual, the outcome of the con- gress will depend on deals worked out behind closed doors j 1So far, interior Minister Mariano Rumor has gained control of about a third of the delegates. His principal competitor is Fanfani, who is trying i,'-~Ito augment his faction with groups drawn mainly from the party left. Andreotti has not yet allied his faction with either of them. If neither Rumor nor Fanfani is successful in rallying a majority a , '71 broad grouping, excluding only the party's right 4 554396 6-73 coalition's slender margin of survival-declared that it would no longer support the government in a confidence vote. The declaration followed Andreotti's refusal to acquiesce in Republican demands for the dismissal of a cabinet minister whose handling of television policy had irritated party leaders. and left extremes, could emerge./ ~I' / [With the exception of Andreotti and others on the party right, most Christian Democratic leaders, including Rumor and Fanfani, are jib leaning toward renewed collaboration with the Socialist Party. Whether this apparent trend emerges as formal party policy depends on the resolution of both personal and ideological ri- `/2valries. A clear condition for such a shift is a Socialist guarantee that it will keep its distance Ufrom the Communists. Continued Socialist al- liance with the Communists in local governments has been an obstacle, but recent Socialist policy it .j statements take a moderate line and open the .. fiAlthough chamber rules precluded a con- [door to a rapprochement with the Christian Dem- SECRET Page 15 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 M SECRET d' u ~he planned naval mutiny last week, at first portrayed by the government as a clumsy affair with comic opera overtones, appears to have been the first move in a plot aimed at toppling the Papadopoulos regime and bringing back King Constantine. The Greek Navy is traditionally royalist. The extent of the plotting became clearer on 25 May when the commander of the Greek destroyer Velos detached his ship from NATO exercises and sought asylum in Italy, along with 3Q officers and crewmen. The list of naval officers under arrest or suspicion in the plot has grown.l rv \Security forces had no trouble foiling the mutiny attempt on the night of 22-23 May and rounding up some 35 suspects. Their action did not, however, prevent the subsequent defection of the men on the Velos, which was at sea when the government moved against the plotters. The Velos affair deeply embarrassed the government, since it demonstrated that the conspiracy was more widespread than the regime had at first thought. levertheless, it is from the army and not the navy that Papadopoulos draws his support. Al- though many army officers have been unhappy with Papadopoulos' performance for some time, and a few may have been in league with the navy plotters, there is no sign that key army leaders were involved in the plot. US officials report some special security precautions, but say that in general the regime is functioning on a business-as- usual basis ?)" jPapadopoulos may actually be able to im- prove his position if he can tap anti-monarchist sentiment to unite the more important army leaders behind him. A number of officers whose backing is essential to Papadopoulos are strongly opposed to the King's return because they fear it would only lead to a reduction in their own power and prestige [There are conflicting reports on the King's role in the affair, but so far no hard evidence that he was involved at all. Nevertheless, the govern- ment has concluded that the King was linked to the plotters, and it may yet try to use the inci- dent to discredit the King and perhaps further Papadopoulos' plan to eliminate the monarchy. Two pro-government newspapers have com- mented that Constantine's chances of returning are now bleak. Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 25X1 25X1 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 ,no, SECRET %W JORDAN: IN WITH THE OLD King Husayn's choice last week of Zaid Rifai as prime minister is designed in part to assuage public unhappiness with the Lawzi government's feckless handling of the Jordan economy. Rifai, a long-time confidant and adviser, has a reputation for decisiveness and should give the government at least the out- ward appearance of dynamism it has lacked. He is unlikely, however, to make any head- way against the country's economic problems. The King also believed that his views on for- eign policy matters were not being effectively communicated to other Arab leaders. Rifai, who will also serve as foreign minister, will be expected to correct this deficiency. Other- wise, the new cabinet-which contains a mixed bag of politicians, bureaucrats, and academics-differs little from its predeces- SYRIA: RARE ELECTION Syria's National Progressive Front, a loose association of parties dominated by the socialist Baath Party but including the Communist Party, won an overwhelming victory in balloting on 27 May for the new 186-member People's Council. The nationwide elections-the first in Syria since the Baathist military coup ten years ago-were orderly, but apparently less than half of the elec- torate went to the polls. The only hint of con- troversy came from the northeastern city of Aleppo near the Turkish border where some "invalid voting" was reported; there has been no further explanation.] The elections are an outgrowth of the adop- tion last March of a new constitution and are intended, like the popular referendum held on the constitution, to provide Syria a framework of legality and a semblance of democracy. President Asad remains in firm control, however, and will continue to be the chief architect of government policy. The new council will function largely as a rubber stamp. Asad probably will name Prime Minister Ayyubi to head a new cabinet, although it is possible that Ayyubi will be chosen instead to preside over the council. In that event, Deputy Prime Minister Haydar is likely to become prime SECRET Page 17 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 INDIA: "INDIRA WAVE" RECEDING xt' Prime Minister Gandhi's personal prestige is fading. The so-called Indira Wave brought her Ruling Congress Party solid majorities in most of the state legislatures in the most recent elections in March 1972, and, until this year, her name alone seemed sufficient to swing the voters to her cause. Within the party, ambitious politicians hewed closely to the line she set and took care to present the unified political front she demanded. Now, many of these same politicians, al- though they have no immediate intention of deserting her party, are beginning to express ideas of their own and to build independent political identities. Having noted that Congress Party standard-bearers fared poorly in recent state and municipal by-elections, they are questioning the wisdom of pinning their political futures entirely on that of the prime minister. Mrs. Gandhi's sagging prestige can be traced largely to her inability to come up with solutions to India's all but intractable economic problems, made worse this year by a serious drought. Her government's failure to provide sufficient food stocks to meet shortages has been especially dam- aging. The lack of progress in forcing powerful landowners in the state assemblies, who provide the backbone of Congress Party financial support, to implement land reform legislation enacted in New Delhi is also coming in for increased criticism from peasants. At the same time urban workers' complaints about high prices for food and other necessities are rising. Businessmen find fault with the prime min- ister's stringent controls as well as her favoritism of public over private enterprises. The recent gov- ernment take-over of the vvholesale wheat trade, which has deprived traders of their livelihood but failed to add the promised amounts of grain to government stores, fuels their discontent. More- over, as economic conditions deteriorate, voices are being raised against Mrs. Gandhi on such non- economic issues as her recent packing of the supreme court and her abortive attempts to con- trol the press by limiting the size of newspapers. Although there is no immediate threat to Mrs. Gandhi's hold on the national government, her prospects for re-creating the enormous popu- lar enthusiasm that built the Indira Wave are not bright. The arrival of imported food grains, the harvesting of the spring crop, and the onset of a good summer monsoon could bring her some re- lief, but her basic problems, for which she has no magic solutions, will go on. Restiveness, of which the recent police revolt in her home state is just one example, will persist. As the prime minister's reputation for omniscience diminishes, faction- alism within her Congress Party will increase, and fewer politicians will want blindly to follow her SECRET Page 18 WEEKLY SUMMARY 1 Jun 73 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 Approved For Release 2008/03/17: CIA-RDP79-00927A010300040001-5 VVW SECRET OAU: STORMY MEETING