WESTERN EUROPE BRANCH OFFICE OF REPORTS AND ESTIMATES WORKING PAPER BRANCH WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400010012-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 12
• Publication Date: August 30, 1949
• Content Type: PAPER

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1IESTEfN EIITROPE BRAITCH
OFFICE OF 'DEPORTS t x D ESTIMATES
CENTRAL I TELLIGE ICE AGENCY
WORKING PAPI? t
BRANCH -MEKLY
S )TICS?: This document is a working paper,
official CIA Issuance. It has been
co-ordinated within OPE, but not with the
IAC Agencies. It repesents current think-.
ing by specialists In CIA, and is designed
for use by others en,;a ;ed in similar or
overlappin,- studies. The opinions expressed
herein may be revised before final and offi-
cial publication, It is intended solely for
the information of the addressee and not for
further dissemination.
DATE: 30 August 1949
DOCUMENT NO.
NOSH N';t= i'; Gi-liS. L I
[LC_/ O -U
CL -5. CFHA.?dOED TO: T3 S C
NEXT REVIEW DATE:
AUTF M~fFIEVIEWER: DAT.372044
4
In-
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tr'FSTFIIT EUROPE, BRANCH
FKLY SUMT-CRY
VOL. V - No 0 7
For wQek endirC
30 August 1949
GEI MAPTY
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SECRET W
25X6A
It d rour,ht--induced dilerma will soon force the French
Govermien a her o: a plan additional agricultural im-
ports which would lead to curtailment of the ambitious
economic program for 1949-50; or (b) prepare reluctantly
for such measures as feodin,; bread-rains to livestock,
seriously reducing- existin _ herds., sacrificin:- the long--
term meat export pro-rare, and finally a reimposin.. of the
politically-der ,serous broad ration. This problem is made
all the more inescapable because the French share of ECA
dollars will probably be out substantially below the re-
quested sum of .'880 millions (itself about 10 below 1948-
1949). and because the, vital dollar-earnint, French exports
to the US so far in 1949 are runnins! about one-third below
French expectations.
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The Government will probably decide upon additional
igrain imports amounting to about 3 million metric tons
.This volume--over 3j times the earlier French estimate
of grain import requirements--would still leave the total
,of available feedgrains somewhat lower than in 1948-49.
Because more than half of the added grain purchases would
probably have to be made with dollars, damaging reductions
would be requiired in raw material and equipment imports.
Equipment imports. from the US, for example, would fall
.;'perhaps to less than ones-third of the anticipated X156
million for the period 1949-50. Although tz, ' is amount
would represent only about 10; of all equipment expected
to be installed in France during this period, nevertheless
it would include such special equipment, as that for
thermal power stations, obtainable only in the US. Hence
a out in this type of import would seriously damage vital
portions of the investment program and likewise affect
industrial production and exports. The additional grain
imports would also force a reduction in shipments of raw
materials and equipment to the overseas territories, upon
whose development France is relying heavily for eventual
achievement of equilibrium in its balance of foreign pay-
ments. Finally, a prospective lag in exports to non-
dollar areas will render difficult the acquisition of the
other halt of the needed agricultural imports, and could
even necessitate still greater grain imports from the US0
The Government can be expected to find that imports
of agricultural products are essential chiefly for the
attainment of pressing political goals. The imports would
produce effects on domestic prices and the bread supply
.which would facilitate the Government's long-term efforts
to overcome labor unrest. At the some time, the unfavor-
able consequences of these imports, though grave, would,
nevertheless permit substantial over-all economic progress
in 1949-50.
PPM CH AND SPANISH NORTH AND WEST AFRICA
tt e-a ticed token strikes maintained during the
mid-summer lull a the rent North African (FNA) ports of
Algiers and Oran may be the prelude not only to a resump-
tion of larger strikes in FNA, but to a widespread work
stoppage in the western Mediterranean. These obviously
Communist-inspired strikes have been undertaken by Algerian
CG7` dock workers in protest against the frequent loading of
troops and war materiel for the tear in Indochina. In view
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H E R E T
of the creation in Marseille last month of a new
International Union of Longshoremen and Maritime
Workers, a V11PTU affiliate, and the close cooperation
existing; between Algerian port workers with those of
Marseille, these continuing protest strikes in Algeria
could very well be preparation for a larger ef:"ort.
THE NET HM LAN DS
A The different conce to of the Dutch and Indonesians
on the eg ee o completeness an na y o an
Indonesian agreement probably will cause difficulties In
all important phases of the negotiations at the Hague
Conference. The Netherlands Government has made it clear
that the agreement must cover all points of difference,
while Republican leaders have stressed the need for a rapid
agreement "in principle" on the main issues so that
sovereignty may be transferred to an Indonesian Government
before the and of the year, The Republicans feel that
complicated economic and financial problems can be nego-
tiated after an independent Indonesia is set up, and even
hope to begin forming the Federal Government as soon as
agreement on its structure is reaeheds while the Conference
turns to consideration of the Netherlands-Indonesian Union
and other matters. The Dutch, on the other hand., ars
emphatic that the Indonesians must commit themselves
clearly an their attitude toward Dutch economic interests
in Indonesia and on the future economic relationships be-
tween the two countries* At present, the Indonesian desire
to conclude the Conference within two months seems optimistic,
because the Dutch probably will be unwilling to transfer
sovereignty until they have specific guarantees that their
interests will be protected,
ITALY
nationalist c ra szn an t e stian reli
i
c
g
on,
annot
be expected to make important inroads into the strength of
the Italian Communist Party. The new Movement is lad by
no outstanding Commis is . It is particularly noteworthy
that those Communists who have been censured or even
temporarily dropped from the Party because of their alleged
excessive nationalism are not affiliated with the new
Movement. The close relations between this group and the
Christian Democrats, who are reportedly giving it financial
aid In return for partial supervision of administration.
will make the Italian Communist Movement suspect even to
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dissident Communists, They will fear that Its pro-
reform and pro-religious character will make It easy
prey to absorption by the left wing of the Christian
Democratic Party, Even certain Christian Democrats
are expressing doubts as to the efficacy of subsidizing
the Italian. Communist Movement as a means of undermining
the Italian Communist Party,
A A demand far nation izat on of Italy*s electric
power industry will be present , Q to ParUament next month
by the Communist-dominated General Confederation of Labor
and will arouse widespread sympathy. There will, however,
be little popular acceptance of the main Communist con-
tention--that the current electric power crisis sterns from
the failure of private industry to keep pace with demand.
The fact is that:, despite extensive war damage of elec-
trical plants, by 194'7 the production of electric energy
had reached the previous all-time annual high of 1941,
,Moreover,, a 50% increase in electric power is envisioned
in .4xpanaion plans which were dravm up soon after the war
and which can now be realized with the help of the #;3!, o
The present electric power shortage results directly
from the cumulative effect of two periods of drought in
the last six months. The cost of coal and petroleum for
thermal power has caused maximum dependence on hydro-
electric power, aggravating the effects of the water
shortage, Sentiment for nationalization of public utili-
ties has made headway among other sections of the population
than the extreme left. There is a general belief that the
cost of telephone service, electricity, and -'as Is higher
and the quality of service poorer than can reasonably be
expected. Widespread dissatisfaction with the performance
of private companies in these fields will provide a recep-
tive audience for the General Confederation of Laborts
demand.
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