WESTERN EUROPE CANADA INTERNATIONAL ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A001700180002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 12, 2016
• Document Release Date: December 31, 2001
• Sequence Number: 2
• Publication Date: September 8, 1975
• Content Type: NOTES

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Secret
No Foreign Dissem
0
WE
Western Europe
Canada
International Organizations
Secret,)
No. 0263-75
September 8, 1975
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NO DISSEM ABROAD/BACKGROUND USE ONLY
CONTROLLED DISSEM
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 010725
Exempt from general declassification schedule
of E.O. 11652, exemption category:
?5B(i), (2), and (3)
Automatically declassified on:
Date impossible to Determine
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WESTERN EUROPE - CANADA - INTERNATIONAL ORGANIZATIONS
This publication is prepared for regional specialists in the Washington com-
munity by the Western Europe Division, Office of Current Intelligence, with
occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
Parties Consulted on New Portuguese
Government . . . . . . . . . . . . . . . . . .
Giscard Proposed New Economic Measures
for France . . . . . . . . . . . . . . . . . . 3
25X6
Jura Separatist Movement Suffers Another
Setback in Switzerland . . . . . . . . . . . . 8
25X6
Greek Military Chiefs Support Role
in NATO . . . . . . . . . . . . . . . . . . . . 11
September 8, 1975
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Parties Consulted on New Portuguese Government
Portuguese President Costa Gomes and Prime
Minister-designate Azevedo discussed formation
of a new government this weekend with represen-
tatives of six of the country's political parties.
According to Lisbon radio, present specula-
tion is that a coalition comprising the Socialists,
the center-left Popular Democrats, and the Communists
will be expanded to include members of the anti-
Communist Melo Antunes faction.
In addition to these parties, talks have also
been held with the hard-line pro-Communist Move-
ment of the Socialist Left, the Communist front
Popular Democratic Movement, and the center-right
Social Democratic Center. It is believed these
parties will not participate in the government;
but have only been consulted to secure multiparty
support.
There has been very little reaction to
Friday's rump session of the Armed Forces General
Assembly and the ouster of former prime minister
Goncalves. Goncalves' supporters appear to feel
that they have suffered a reversal. On Saturday
evening his entire pro-Communist cabinet resigned,
stating that it could no longer continue because
Friday's events had fundamentally altered the
political situation. The resignations came despite
an appeal by Costa Gomes to stay on until the new
cabinet is formed.
According to the Antunes group,
which did not attend the general assembly session,
saw the meeting as merely a holding action. The
September 8, 1975
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group is reported to feel that it has neither
gained significantly nor lost ground. It is
said to be seeking further to restructure the
Revolutionary Council to bring its members more
in line with its own anti-Communist thinking.
The first reaction from the parties came
from a leading Popular Democrat, who demanded
that the ruling Armed Forces Movement be dissolved,
that the Revolutionary Council be scrapped, and
that the military be subordinated to a democratic,
civilian administration. He was probably seeking
to gain a strong position for his party in the new
government.
Army Chief of Staff Fabiao said yesterday
that the parties are incapable of leading Portugal
out of its present crisis, and sources close to both
Costa Gomes and Azevedo say the two are unlikely to
relinquish power to an all-civilian government at
this time.
Meanwhile, Central Military Region commander
General Charais--a strong Antunes supporter--sought
to forestall any Communist attempt to 'take advantage
of the present uncertainty. He warned that an
attempted coup by Goncalves' Communist supporters
would be "suicidal." Furthermore, he said, it would
lead not only to civil war but also to a right-wing
dictatorship. (Secret No Foreign Dissem/Controlled
Dissem)
September 8, 1975
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25X1A
Giscard Proposes New Economic Measures for France
President Giscard d'Estaing has called a
special session of the French Assembly from
September 9 to 13 for debate on economic and
social issues. He apparently hopes the session
will help offset widespread criticism that he
failed to recognize the gravity of the nation's
problems and launch a workable recovery program.
The French government has realized in the
past few weeks that its catchy rhetoric and half-
.
hearted measures have been insufficient to satisfy I 1
the nation, which is preoccupied with unemployment
and inflation.
Giscard set the stage last Thursday in a
televised news conference, proposing drastic
measures, including $7 billion in expenditures
and tax credits and a sharp cut in interest
rates. The government hopes this program will
halt a year of steady economic decline. Assembly
approval of the measures is expected during the
special session, but its debate will continue
during the regular autumn session, which opens
on October 2.
Rising government concern over unemployment
was a major factor determining the size of the
proposed program. The number of jobless, which
doubled over the past year to 885,000, should
go over 1.2 million by December, and could go
even higher. French officials have concluded
they cannot wait for an upturn in the US and
West German economies to pull France out of the
recession.
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The new measures focus particularly on
public works projects that can be initiated
quickly. About $2.5 billion will go for construc-
tion of highways, railroads, and canals; housing
contructions subsidies will be increased.
The program aims at boosting private spending
through increased family allowances and increasing
investment through corporate tax cuts. In addition,
a sharp cut in the bank rate from 9.5 to 8 percent
should lower other interest rates. All of these
steps are generally in line with earlier anti-
recession moves, although larger in magnitude.
Opposition Views
The trade unions are urging universal
reduction of the workweek from 42 to 40 hours
without loss of pay, a 30-percent increase in
the minimum monthly wage, a lower retirement
age, and the creation of 150,000 jobs in the
public sector. The Communists have offered an
even more extensive program, but have been
criticized in the press for failing to specify
how it would be funded.
Financing the government's program will
push this year's budget deficit to $12 billion,
about 3.5 percent of gross national product,
a huge amount by French standards.
The new measures will probably have little
economic effect this year, beyond an immediate
psychological impact. Unemployment will continue
to rise rapidly through the fall as new graduates
enter the labor force. Industrial production
will remain far below the 1974 peak, although
some improvement could occur by year-end.
The government's program should, however,
amplify the recovery in private demand that is
expected to begin early next year. The selling
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off of accumulated inventories, which contributed
heavily to the present recession, should end with-
in a few months and be followed by some new produc
tion to rebuild stocks. Business surveys indicate
that private investment in plant and equipment
will recover strongly next year from the present
depressed level.
Giscard is aiming at political as well as
economic targets with his program. He will
probably propose additional measures to the
Assembly later this year. Although he is
aware of the risks of alienating some of his
conservative supporters, the President also hopes
to win support on the left. He has already
received plaudits from among the Left Radicals,
the junior partner in the Communist-Socialist
alliance.
The divisions within the left parties and
unions will allow Giscard at least to buy time
with the new program. The almost one-year-old
public debate between the Communists and Socialists,
as well as their internal splits, not only diminish
the effectiveness of their opposition to the govern-
ment, but also divert public attention from issues
the left could exploit to advantage.
Continued Communist-Socialist competition
can be expected to be a dominant theme on the
national political scene this fall, especially
among the workers. The leftist unions, meanwhile,
are still recovering from setbacks they suffered
over the last year when they failed to mobilize
the rank and file behind their demands. These
unions--the two largest--have been restrained
in their statements about possible labor agitation
in the next few weeks.
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Union leaders realize that rising unemploy-
ment and limited funds to support major strike
actions will hold back radicalism among the rank
and file, who fear job losses. (Confidential)
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September 8, 1975
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Jura Separatist Movement Suffers Another
Setback in Switzerland
The ambitions of the Jura separatist movement
were dealt a severe blow yesterday in the last of a
series of plebiscites concerr,~ing the creation of
a new canton for French-speaking Swiss. Voters
in seven of ten border communities chose to remain
in Bern canton rather than join the new canton
which was authorized last year.
The close vote between the pro- and anti-
separatists in the industrial town of Moutier--the
economic hub of the Jura region--precipitated
widespread violence. After their defeat, pro-
separatists went on an eight-hour rampage--ripping
up cobbled streets, sacking homes of opponent, and
hurling Molotov cocktails at police armored cars.
Riot police restored order only this morning.
The vote should bring an end to the decade-long
controversy. No further plebiscites are required
and attempts by pro-separatists to promote their
cause will only trigger a strong negative reaction.
The anti-separatists--essentially French-speaking
Protestants--have now indicated at the cantonal,
district, and local level that they want no part
of the new canton which will be predominantly
Catholic.
The new canton will consist essentially of the
three districts that are collectively called "North
Jura"--the mountainous area directly bordering
France--and the three communities that decided
yesterday in favor of the new canton. (Unclassified)
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SECRET
25X1A
Greek Military Chiefs Support Role in NATO
The Greek armed forces chiefs reportedly have
recommended that Athens be forthcoming when the
NATO allies discuss the status of Greece's relations
with the Alliance later this month.
hat the
military leaders recommended to Defense Minister
Averoff that:
--Greece continue to participate in NATO's
military committee, and maintain its
representatives at SHAPt and'its liaison
relationship with NATO's Southern Command.
The Greek First Army remain under Greek,
command in peacetime but be subordinated
to NATO's Southern Command in the event
of war.
--Military units in Greece equipped with
nuclear delivery systems should be
immediately subordinated to the Southern
Command. (No Greek forces have been
under a NATO commander since Athens with-
drew from the Alliance's integrated
military structure last year.)
--Athens decide on an individual basis
whether Greek forces will participate
in NATO exercises. All such exercises
on Greek soil should be under Greek
September 8, 1975
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command. (This indicates that the Greeks
would again participate in at least some
NATO exercises.)
--The intelligence exchange with NATO be
broadened to include all areas, and not
the Mediterranean area only.
Both Averoff and Prime Minister Karamanlis will
have to approve these recommendations. Averoff
probably will. If Karamanlisconcurs, and Athens
implements these proposals, Greece would be taking
a large step toward reintegrating its forces into
the military side of NATO.
have confirmed
that Karamanlis would like to restore Greece to full
military membership in the Alliance. However, only
a settlement of the Cyprus issue and a corresponding
improvement in Greek-Turkish relations is likely
to make it politically feasible for him to,sC -So,
Consequently, Karamanlis is likelyto p roceed cautiously.
NATO has a direct interest in improved relations
between Greece and Turkey because their cooperation
in the areas of communications and planning is necessary
to restore the integrated regional command structure
required for an effective defense of the southern
flank. The Greek ambassador to NATO is scheduled
to make a statement on this subject to the North
Atlantic Council on September 17. The Defense
Planning Committee will meet the same day to dis-
cuss procedural steps involved in this question.
(Secret No Foreign Dissem/No Dissem Abroad/Controlled
Dissem)
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