WESTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000900230001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: August 19, 2005
• Sequence Number: 1
• Publication Date: May 9, 1975
• Content Type: NOTES

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New Party Tensions in Lisbon . . . . . . . . .
EC Moves to Strengthen the Workers' Voice in
Business Policy . . . . . . . . . . . . . .
DOS review(s) completed.
May 9, 1975
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New Party Tensions in Lisbon
Despite military efforts to ease tension
between the Portuguese Communists and Socialists,
the cooperation agreement announced on Tuesday
is already beginning to come apart.
Military leaders summoned the four parties
in the governing coalition to discuss disagree-
ments, but apparently had little success in
persuading the parties to submerge their differ-
ences. The Communists yesterday charged, without
specifically naming the Socialists, that attempts
were being made to use the election results to
shift the balance of power by creating divisions
among military leaders and within the labor
movement.
The Communist statement was in response to
Socialist Party leader Soares' press conference
Wednesday in which he warned that if the two
parties are to work together, the Communists
must loosen their control of organized labor,
the press, and local governments.
Soares specifically called for union and
local elections and urged the government to
begin an investigation of bias in the media.
The Socialists hope to use the ballot to oust
Communist Party members and sympathizers who
took over leadership positions in both the
unions and local councils after the April
coup.
The Socialists have been particularly
suspicious that the Communists will use their
influence with radical military officers to
change the provisions in the labor law that
May 9, 1975
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call for union elections. Although the text
of the law has not yet been published, moderate
officers have indicated to the US embassy that
the Revolutionary Council retained the election
provision. The fact that the text of the law
has not yet been released could indicate, how-
ever, that the issue has not been finally resolved.
Meanwhile, the recent wave of strikes and
growing social tensions is demonstrating that
neither the Communists nor the Socialists have
been able to impose their will on the labor
rank and file. Both parties have come out against
the strikes, but press reports estimate that
150,000 hotel, chemical, and municipal workers
went on strike Wednesday, demanding higher wages
and a voice in negotiating collective labor
contracts. One walkout closed all privately
owned hotels and restraurants for the third
time this week.
May 9, 1975
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EC Moves To Strengthen the Workers' Voice in
Business Policy
The Commission, in staking out an advanced
Position on increased worker participation in
business policy decisions, is taking a political
risk. The recommendation is likely to delay
approval of the EC's European-company statute,
intended to encourage incorporation across mem-
ber state boundaries.
The Commission last week approved a draft
which is designed to allow companies operating
in the EC to incorporate and operate under a
single body of law rather than under the various
laws of the individual member states, which is
the only possibility at the present time.
Interest in a European company law code
arose from the problems industry faces in deal-
ing with the differing legal systems in nine
member states. The lack of uniformity impedes
corporate efficiency as well as cross-frontier
mergers. It also would--once the community
harmonizes tax regulations--enable governments
to get a better handle on corporate revenues.
During the required review of the proposed
statutes by the European Parliament, a combina-
tion of Christian Democrats and Socialists
persuaded the Commission to strengthen the pro-
visions for worker participation. The super-
visory board of directors, which in Europe is
often separate from the management board and is
responsible for policy decisions, is to consist
of three groups: shareholders, workers, and
independents. The independents would be elected
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by a two--thirds vote of the other two groups.
Worker participation in the choice of the
decisive third group of the supervisory board is
likely to arouse considerable industrial re-
luctance to use the new statute, if it is approved
by the EC Council as it stands. Some industry
federations have described the provision as a
gamble, fearing that one side might acquire and
retain permanent control or that a long-lasting
stalemate could ensue.
The original Commission aim was to give
workers only a third of the seats on the board.
Even that would probably have run into opposi-
tion from some industrialists, particularly in
France, although President Giscard has shown
interest in moving French industry along in
this direction. Elsewhere in the EC, worker
participation in industrial policy decisions
has become more acceptable in recent years.
The West Germans have been the most favorable
to the concept, while public and union attitudes
have been shifting in this direction in Italy
and. the UK. Workers at the Chrysler plant in
the UK, for example, are considering holding
off on a strike to consider a company offer for
increased worker participation in company
decisions and profits.
Although the Commission has doubts about
the political wisdom of pushing the tripartite
concept now, it does feel that it is the wave of
the future and that the statute will be used
"when the time is ripe."
It remains to be seen whether the Commis-
sion will be similarly bold in drawing up the
proposals for the politically more contentious
effort of harmonizing national company law.
This seems unlikely, since the latter, if approved
will be obligatory rules; resort to the European
company statute will be optional.
May 9, 1975
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