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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400020012-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 12
• Publication Date: December 20, 1949
• Content Type: PAPER

12-3
'WESTERN EUROPE DIVXSION
ra OF REPORTS AND ESTIMATIO
CENTRAL INTELL:GENOB ACIENOY
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NOTICE: This document is a well/xig p.i,per,
NOT an official CIA. 5.ssuanco. It ,1-4).3 bagn
eo-, ordinated within ORE, but not with ti-lo
IAO Agencies. It represents cuaven:-,; thinic--
Ing by specialists in CIA D and is desigaod
for Use by others engaged in slimi:La:.? or
overlappIng studies. The opinions_ eZpresif:i0?
hereln :-atay be revised. before final and
publicationt, It is intended solely :17o5,
the information of the addressee and noL
further dissatination,,
NOT:ICE: This Weakaz w1r.1. not be
wzmaraloaktv?
Vro ,voel-rs ceP firr. ?Deem?bar
L? Jauax
ANGE IN CLASS.
DECLASSIFiED
TA .a
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VOL. V No. 22
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WESTERN EUROPE DIVISION
WEEKLY SUUMARY
For week endinc
20 December 1S34(3
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AUSTRIA
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The end of the extraordinari peaceful nostwar
.eatiox agemen n ,na rIa is
;
3 ea 'eel uy tho,apparent abandonment of wage settlaments on
'0. EiLnational basis. The rejection by the Chnimber of _Oemmerce
?
?
i .(4,sm41.-Offiel,al.organization representing industry) of the
; demand by the Trade Union Federation (TUF) for one general
f
-,i
,
f eedt -of -livinc bonus .payment,, binding on all industry:, has
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been the first step toward the decentralization of wage
settlemaats. Furthermore the Socialist, P.a.Ay appears
to be headed toward a change in its wage policy frcia
.gensral agreements to that of wags negotiations by
'individual 'unions .under central TUF guidance. If thf_s
1411es aboutv it will emphasize an Lacroasing return
strikes as a regular feature of Austrian. economic lif,
To date,? the decision of the Chamber of
Commerce to negotiate an the bonus in each -,:adustry
individual. unions (including whits collar workers) h.as
contributed to widespread. strike hic.i although sher,t,?
represent considerably underlying labor dissatisfact.
The .Communists succeeded in fanning this discontent .a*to
scattered violence in at least four cities, all in the
western zones, Ftrthermeres,.thesa.disurbanceshavo
taken place in the face of the admonitions of Socialist
leaders to workers to co4duct themselves legally.
Although successful decentralized negotiations should be
possible the fact that they are conducted on a local.
level will .aprove the Communist positi.m to fment
labor unrest. .
The People's Party opinion that stability la
.the prica-!wage relationship has been -r stored by the
general stop-gap payments, limited govoramental succos
in rolling prices back, and reduction of taxes is
purely .optinism The vholnscAle price index (1937 cols
100) rose from 425 in October ?c 451 in November, and
the retail price index increased from 431 to 163. The
.continued wage-price disparity reinforces the Secialit
stand that measures of?more lasting effect must be
undertaken. . The change in the Socialist Party wage
policy is probably an effort t isdnimie what it cenLor
to be -inevitable wage .z'aLzos and thus to re(:iiuce proarou
on the budget andminlyAzo incraasos in. the geaeral
:price level In addition9 there is stong sontimont '.?Lth-
tn .the unions, and management for a retura to bilateral
bargaining.
FRANCE
P
AlgL2rEszols pf v:AticipEttlea bv
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,
In formut,asL211111cy_rp.p;a:A!An,(2._Kletnqr4 wou,ia ac unacc..:Ttble
o IITanch Government, In paracunr9 it would paby
roloct. suggostion,.? (1). to establish. a timetable for step
toward the independenes of Victaam.; or (.:2) for an inter-
national commission to eupovlse steps leading to Vietnamese
?independ.ence, ao mearw of o.rAcou-zng Vietnamese support_ .
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for the Bao Dai regime. The Freneh claim that they ai
rreakinf reasonable progress under present-political
. 2
Icircumstences in ImplementinF thelr proeram for
Vietnamese independence.; although they realize eh at
arrival of Chinese Communist forces at the SineeTaskie
!border will appreciably strengthen the Ho Chi Minh
redistance in Vietnam. The French. coasidee that tho
concessions specified In the Auriol-Bao Dal Agreements
of 8 March 1949,, supplemented by tho conventions presently
'being negotiated in Saigon, are a sufficient Indicatien of
theer,goodinteation regarding Vietnam, Tho French
,Government eeTected that the 8 March Agreements would be
ratified by the end of 19490 when 'administrative functions
are scheduled to be transferred to Vietnamese authorities,
They anticipate, moreover, that such limitations on
independence within the French Union ae may exist at that
time can be gradually removed when peace has been restored
and a :non-Cueesunist government gains control througheet
Vietnam
Actually, Frances sensitivity to _foreign
"meddling" in the affairs of tho French Union has alredy
beel4 Increased by the manner in which the UN has dealt
with the Italian colonies problam, with its implieatices
for French African interests. In the long run, moreov,or,
considerations of prestige and tenaciouo opposition to
concessions beyond the S March Agreements from the modcrate
and conservative political parties would render unacceptable
any proposals of "interference by foreign nations, Az
long as the French can elaim that the presence In Vlelsam
of French military and administrative personnel-1n edditIon
to rinancial and economic support--is indispensable to
prevent the spread of Cemmunism f!.n that country 0 they will
use this argument to reject foreign proposals of a timetable
for attainment of Vietnamese independence withj:a the French
Union
The French Comm raJnI (PCE1is about te
intensify , s e or s to .equidne ''.17'Intsts? petty
bourgeois" elements and all members suspected of die`eeyaI
to he Kremlin. This policy results both from the Kriin
dissatisfaction with the FGP7s failure to ag,gravate ooial
unrIst in Prance, and from repent indications of Titoeet
tendeneies withi'n the Party Te ranks. Dseing.the past year
man7 nationally-rinded French Communists an praaincse
fel1ow7travelers have been alienated by Mos cow GrOW:7,ng
emphasis on tho Stalinist doctothe that all national - e
niEr't; parties rimst be eubservient t. the. Sovint Union
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PCP cadres are airead7 being reorganized -1!
the provinces by the replacement cf local soc:seta3,10-
of "bourgeois origin" with members of the workin, L.E0
Because the :arty is relying increasingly on hArd-3c
Stalinists, who are stressing the quality rather that
the size of membership:, the cur:ant decline in MGM-J;
ship 'is likely to be accelerated somewhat in the nee
future.
The PCPs numerical strength and political
Influence in Prance is likely to be weakened durin/ o
coming months. Should Parliament be dissolved and
elections be held in the coming year, the GPF uncle: ,vy
foreseeable circumstances would lose strength in th,)
Assembly. There is, however, no prospect nr a distn
potion of the Party. Rather the purgint, of membq.r,,,
lukewarm to MoscowTs leadership and the in creased
reliance on the Partyrs hard-core, indicate that the
leaders will become more vigilant for all opportaeeti. ,s
to pursue their political objectives Although thn
has been relatively ineffective In promotinf7,
strike action in recent months; it will remain on
alert to take advantage of the growing labor anrese
arising from the current increase of prices.
13 The efforts of the French Government to *20.uce..?,
In 1850 th17-71176E176=1"61176FIlle naniETY-TaTIF6
are-flkeTy to fall coNEWI;iibly sho-RTSTITIW_CI:? goal
an arouse widespread criticism which will further
jeopardize the political position of the Golernmon;. The
Cabinet proposes to hold the SNCF1s deficit to 57 billion
franes (about one-fifth of the total prospectivs budgetary
deficit) compared to an esttmated 1949 deficit of aeout
135 billion francs (more than one-third of the DstLme.ed
national deficit for 1949)Q This objective is to be
attained by: (1) economien; (2) fare increeries; (6) ee-
duction of competition from highway traAspeet; and (S)
prohibition of any special advance to the SSCP fro le ,ae
Treasury beyond the budgeted deficit. (Such an aeelle
amounting to 66 billion francs, was made in 19493)
The SNCPcs administration estimates that the
Governmentrs goal could be reached only by an increao of
50-40% in passenger fares and a rise of 8-105 in freight
rates Actually o increases in rates are likely to be
much'emaller;? as Jooncmic and political consideratf.oa,
force the Goveleament to tate) stronger measures again
steady rise in general pri:o levels Economies so fa
planned by the bUCF amount to only 11 billion francs.
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The Government is soveroly bu b7
considerations in Its efforts to reduco tho SNCP's: !TC1Icit,
Strong opposition from the railroaa workorav unIcls --as
already been induced by the disnIssal of 5,000 er1711es
and the raising of the retirement age. Such ecalA1f.
moulds, if carried much further, ba offeotiveay by
widespread dananstrations In the nEtionaliad
No extensive abandonment of lines.? moroover,, is 1:Lkf::In'
despite a recant Cabinet decree pnYvidinc: for th()
coordination of rail and highway transport, A CA)..rene:ot
proposal to levy a tax of 20A00 f.pancs a ton
on cemmercial truck s in order to reduce the5.r collp(,titf,No
advantage as the SUCFvo rates anl 3Yaisod, Is meeirl_ CIrm
resistance from transport operators, Provl.ded, Q,J7forcl,
that the Third Force coalition romins in pcwer;,
SNCPts deficit for 1950 is likely to roac'n alio; ZiNi;.C6
size presently planned by the Coverament, or 100
billion francs.
FRENCH AND SPANISH NORTH AND WEST AFR?CA
Fearin _Er019,1201-00,71,4,'Ja Phlts Pub,L'3 u' 1j4;i9c.
tarvIrtricurciii'e arjd :1:-zv:lo_aLfno;t; - -
Residency General- in Tunisia 'Mysho.r..-=:EY.y t.ako1.1;i;loi to IV 3 3
wages,. Labor's denim-Ids for incred Ivacr:..S 2, 71.11.11,1a 0 slab -
stantially below rising living cests,, are spearheadk-:' by tl%o
nationalist labm. organimtion (UGTT). This unicn. 7ong-
sponsored by the principal nationalist organf.Latcyl
Tunisia,- the Noo Dostourv has shown a crowing telldoit,y to
shun politics7M3r7FrEe :tts W;tentian to labor p....0-,aams,
Moreover t has prover,. to bo a MOP3 eMcient ane. 11)verftl
organization than it3 sponsoy., and hal succ(owlod
placing the Conranist-dirsoted USTT iSbar
ITALY
The of a budG2t, towar which
substantiar7ng:,,ass ilas teen macie ta fEly ;11,ring past
two years, will probably suffer a set-back in 1.952-
Pre1imlnary estimates of the 1950-51 budg4tary roqu:1,,zementE:i
just submitted by the Government ninistries total 1.793
leillion lire (about 29 billion dollars)--a f:aca-ease
over the 1949,-50 budget, riot of the Increase IF; r(rosented
in the proposc6 appropriations for pliblic works and ioarmed
forces. It is estimated that revenues for. 1C-i50-51 17111 be
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01480111411on lirer-18% less than 1949-5(4 Most of this
CreaSes hOwevere is this to the absence of counterps.et
ftndse which totaled 201 billion lire In the 1949-50
bpdgete Oounterpart funds for 1950-51 cannot yet be
eetimated. Leaving them out of caasideration, the
,e0w1tant deficit for 1950-51 would be 713 billion 1:1.:eep
*Ore than three times as great as the estimated 1942-0
deficit, Although some pruning in these first estimsees
naT be expected, the Italian General Comptrollerts
Wiwi has warned that it will be very difficult to
reduce the 1980.51 deficits to the 1949-50 Ievele.
non -C unist Italian labor or anizaticas
regress irecelan wou ? mater. al y
p prospects for the formation of a unified anti-
006MUn5.st labor front in Italy. Leaders of both non-
OOMennist labor federations, the Christian Democeat-
OPonsored Free Confederation of Workers (LCGIL) and tha
moderate Leftist Federation of Labor (FIL)? have expeessed
arming dissatisfaction with the subservience of lai)or
unions to political groups The LCGIL leaders have eerong1y
-opposed the Christian Democratic Party national cousciIvs
support of the restrictive Fanfani labor union bill. Their
stunt" has ,callae4 e Christian Democratic official to eapress
regret that the Government did not have ffa tamed and t:':omesti-
eatftd unionism" an which to rely,. The PM executive
committee, irked at that it regards as unwarranted inter-
ference with its affairs an the part of the Republican
-Partrik has decided (subject to ratification by the FIT,
directorate) that heuoeforth no one may hold both party
and union 'offices. In additions, it has declared that any
one seeking to Impose the wishes of a political party on the
PIL will be expelled from the federation.
Nen-Commuml.st trade unionists recognize that the
elimination of political party tnfluence in trade uniens is
a prerequisite to the creation of a single non-Communist
labor organization. Efforts on the part of those desiring
labor unification to make trade unions apolitical in
character should now be stimulated, Progress in this
direction, however, will be slow because of 1Sne traditional
oohcept of Italian trade unions as adjuncts of the paeeie
by which they have been sired and reared.
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Thkaatiaini11..1a7-114ohos-ws,s_qadzd
otteroSiza-against Soviet ComslunIst .isperi. Ism Coloilo.2,
Holy Years, which officially begins on Christo.as Ii
Since the close of World Wssr II tho VaticaL hso for:.
Communiom ostth increasing militance loadino, up to
Papal decree excommunicating Gathollo Coiosarliso_
Because no Important galno for Cat,holf:slom nro dloo
as the result of the deovoo, whesooas the political
successes of the Catholio Ilaotiso CVJ/ IJAo Communists oo
demonstrablso, the Vatican can be expooted to oncoura,,,
increased Catholic participation in local politics..
the same timap the new Vatican roc:do will beam ani
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Communist propagsnda to the worle, Josotioular eslphsn'
will be laid on eaotern Europe ,,here the Holy See v11
intensify its fight to inpless the 'Roman Gatholio
clergy with the nod for standing foot ogesinot Govern
ment pressure, Tho Vatioan will c.Iso seek to incr000z
its misolonary activity in the Near anc:. Jar i]aot, In
addition it will combat enticlerioalissoo which is bicthgso
more noticeablo.,
Measures taken in the struggle aLoinst Casto j,
will be aimed also at another old achevsaryo the 11,:aotosn
Orthodox Church. Yov that relation etveon the 1..3 o0
the Orthodox Church have b000aso closoo, and sovieo
fluence in the roar and Far East is Inc.00using, 7uticoo
leaders undoubtedly do not overlook The possibility
new kind of Byzantine empire under the leader sip of
Soviet Union. Such a powerful military bloc, e'oas!n.'
dynamic economic and roligious olo2onts, could bsmse
fearful advezsary for the Vatican( Furtlsoroore, the
creation of sts,ang national Catholic Church oo oot ooin,
allegiance to Rome would iforeaten tto Vaticans intoo-
national structure,,
nil? the Vatican is attacking theze o:s'sornos.
problems during the caning yoarv Vatican leo:loos will
concernod also with the difficulty ofrocaocf.1.1.,ag tho
growing influence of the conseovativo Jossit oodoo ca
Vatican policy with the .r000gnises: nocasoity of oncoo.a.
the Catholic partie.s to develop a liberal socis-soonosioc
program which can oaripoto 1Mh osotalYn.inio
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