CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025300040001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: December 3, 2003
• Sequence Number: 1
• Publication Date: September 21, 1973
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
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State Department review completed
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21 September 1973
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21 September 1973
Central Intelligence Bulletin
CONTENTS
EASTERN EUROPE - EC: Eastern Europe breaks ranks
with Moscow over CEMA-EC relations. (Page 1)
CAMBODIA - NORTH VIETNAM: Sihanouk shows concern
over level of Hanoi's support. (Page 2)
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ARGENTINA: Peron will handily win the election
Sunday. (Page 6)
CHILE: Situation. remains calm. (Page 7)
INTERNATIONAL MONETARY DEVELOPMENTS: Heavy inter-
vention by German and French central banks was re-
quired yesterday. (Page 8)
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FOR THE RECORD: (Page 13)
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EASTERN EUROPE - EC: In an unprecedented
breaking of ranks with Moscow, the East European
governments have urged the EC not to agree to a
bloc-to-bloc agreement with CEMA that would re-
strict East European bilateral economic relations
with EC members.
After the Soviet Secretary General of CEMA
made an overture to the Danes late last month for
establishing official contacts between EC and CEMA,
the ambassadors of the East European members of
CEMA called individually on two Danish ministers
to inquire exactly what the Secretary General had
said and what answers had been given him. Accord-
ing to the Danish Foreign Economic Minister, the
ambassadors, with varying degrees of intensity,
expressed the hope that the EC would not enter into
a bloc-to-bloc agreement with CEMA. Several also
pointed out that only the Soviet ambassador to Den-
mark accompanied the CEMA Secretary General, thus
.strongly indicating that the proposal, although
made in CEMA's name, should be interpreted as a
Soviet initiative.
The ambassadors' action emphasizes the value
that each of Moscow's client states places on its
prospects of establishing bilateral ties with the
EC. Romania has already been granted arrangements
that will enable, it to benefit from the EC's gen-
eralized trade preference scheme.
Other East European countries share Bucharest's
keen interest in expanding economic relations with
the West, particularly when Moscow is using detente
to advance its own economic interests. The ambas-
sadors' action is thus a clear sign that the eco-
nomic benefits of detente have led to some slippage
of Moscow's control over its allies.
C The EC. Council yesterday decided on a very cau-
tious reply to the Secretary. General. He will be
told that the EC is prepared to study his request
for discussions and hat CEMA may contribute to the
study if it wishes. The community has avoided out-
right approval of hi feeler so as not to imply in-
stitutional equality between itself and CEMA. Fur-
thermore, the EC, like some of the East Europeans,
views Soviet interest in detente as providing lever-
age to extract concessions from Moscow.
21 Sep 73 Central Intelligence Bulletin
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*CAMBODIA NORTH VIETNAM: Sihanouk's latest
statements on the Khmer Communists' military pros-
pects in Cambodia reflect in part his long-standing
concern over the level of Hanoi's support.
During press interviews this week in Algiers
and Peking, Sihanouk maintained that victory over
the Lon Nol government will be delayed for "many
years" unless his Communist backers give the insur-
gents more material assistance. Sihanouk consist-
ently singled out North Vietnam for special criti-
cism, claiming that Hanoi was unwilling to transport
Chinese-supplied arms to Cambodia. He also charged
that the Vietnamese Communists had moved their arms
caches in Cambodia to South Vietnam, thereby denying
them to the insurgents. According to Sihanouk, he
has made demarches to his allies on the supply prob-
lem but that "thus far, we have had nothing--or very
little."
There is, of course, an element of scapegoatism
in Sihanouk's remarks. He is disappointed over the
insurgents' failure to take Kompong Cham. Nonethe-
less, since last January Sihanouk has been asserting
that the Vietnamese have cut off arms and ammunition
supplies.
Subsequently, in early September, i-
anou stated publicly that Hanoi had signed an
agreement under which the insurgents would be sup-
plied with arms and ammunition from Viet Cong stocks
and Hanoi would be reimbursed by the Chinese. It is
that agreement which Sihanouk now implies is not
working properly.
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If Hanoi is unwilling to give the Khmer insur-
gents enough materiel to support sustained high-
level military activity, it would indicate that the
North Vietnamese are relatively satisfied with a
status quo in Cambodia that protects their western
flank and enables them to concentrate on South
Vietnam. It may be, as Sihanouk charges, that
Hanoi is more interested in ensuring that the US
does not again become militarily involved in Indo-
china than it is in promoting an early Khmer Commu-
nist victory in Cambodia and another crisis situa-
tion there. Hanoi may also still entertain hopes
of receiving some US assistance in the future and
wishes to do nothing in Cambodia to jeopardize
that possibility. At a minimum, the North Vietnam-
ese may see some advantage in giving the appearance
that they are acting with restraint in Cambodia.
*Because of the shortage of time for preparation of this item, the analytic
interpretation presented here has been produced by the Central Intelli-
gence Agency without the participation of the Bureau of Intelligence and
Research, Department of State.
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ARGENTINA: Juan Peron stands a good chance of
winning the election on Sunday by a larger margin
than his stand-in Hector Campora did in the voting
last March.
Argentines have shown little interest in the
campaign which has largely been overshadowed by
developments in Chile, and apathy or leftist defec-
tions could erode some of Peron's support. The US
Embassy believes, however, that the Peron ticket
will capture 55 to 60 percent of the vote. This
would propel Peron beyond the 50 percent needed to
avoid a runoff and provide'him with a strong governing
mandate.
The uninspiring vice presidential candidacy of
his wife Isabel is unlikely to reduce his margin of
victory because most voters do not take her seriously
as a successor. The only inconclusive element in
the contest is the impact of the government's deci-
sion to give recognition to the new Chilean junta on
Wednesday night. Widespread leftist demonstrations,
heavily flavored with anti-US sentiment, mobilized
sympathy for the ousted Allende regime and played
up "imperialist" involvement in the establishment
of a military "dictatorship" in Santiago. Recogni-
tion by Buenos Aires implies an eagerness by both
Peron and the Argentine armed forces to cement rela-
tions with the new junta quickly and head off what
they fear most--that Chile will be drawn into the
Brazilian orbit, thus encircling Argentina with
regimes well disposed toward Argentina's archrival.
Peron's pragmatic move could have some effect
on the turnout of left-wing voters who only recently
had been brought back into the fold by Peron's skill-
ful maneuvering.
Peron's nationalistic appeal, however, may off-
set any discontent over the recognition of Chile's
new military rulers which most Argentines probably
see as a practical and necessary step to avoid a
rupture in the traditional f JAn8qhip with the
neighboring Andean country.
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C CHILE: The situation remains generally calm.
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Workers appear to be returning to their jobs
in the provinces and many public and private enter-
prises are operating normally. Gasoline, heating
fuels, bread, and other essentials are becoming
more available and black market activity is reported
to have declined significantly from pre-coup levels.
Although the supply board has announced that there
is enough food in the country and that there are
"abundant" reserves, the grain situation could be-
come critical. Chilean officials fear that unless
supplies of wheat become available soon, the coun-
try will be without bread for as long as three
weeks within a month or so.
On the political front, the Christian Democrats,
the conservative National Party, and the private en-
terprise guilds are competing for influence on the
new regime. While the junta is relying on guild
members for policy advice and technical expertise,
the military has declared that it does not intend
to rely on politicians oL any stripe.
21 Sep 73 Central Intelligence Bulletin 7
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INTERNATIONAL MONETARY DEVELOPMENTS: Heavy
intervention by the German and French central banks
was required in European money markets again yester-
day to maintain the European joint float. Some of
the market uncertainty rubbed off on the dollar.
Total intervention by the European central banks in
the first four days of this week amounts to at least
$1.5 billion. The Europeans probably are hoping
that the intervention will keep the float intact to-
day and that some indication of progress toward mon-
etary reform at the annual meeting of the Interna-
tional Monetary Fund in Nairobi opening Monday will
ease market pressures next week.
The Bundesbank's purchases of French francs so
far this week reportedly amount to the equivalent
of over $800 million, including over $400 million
yesterday. The Bank of France, meanwhile, continues
to be forced to sell the stronger joint float cur-
rencies--predominantly marks--to do its part to keep
the float intact. Its sales are roughly equivalent
to Bundesbank purchases. Paris also raised the
French bank rate to 11 percent yesterday, the high-
est since World War II, and closer to rates prevail-
ing elsewhere in Europe. This move helped ease pres-
sures on the franc.
This is no indication that either Bonn or Paris
is nearing its intervention limit and is preparing
to change its currency's exchange rate. Paris of-
ficially is ridiculing any notion that it is on the
brink of a franc devaluation. All the Europeans--
including the Belgians whose franc is under upward
pressure along with the mark--are holding their
cards closely. In any event, official public state-
ments have not been reliable indicators of national
exchange rate policy when speculation dominates the
money markets.
Pressures within the EC for independent na-
tional action illustrate the difficulties in main-
taining the joint float. Such problems also will
tend to reinforce the reluctance of London and Rome
to associate their currencies with the float.
(continued)
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The dollar dropped back to its lowest levels
since 9 August and the Bundesbank intervened in
small amounts to support the dollar. The dollar
decline, coming only a day after another favorable
report on the US balance-of-payments position, dem-
onstrates the domination of psychology on the behav-
ior of currency markets.
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Vietnam: I the
Commun stets are extending the petroleum pipeline that
crosses the DMZ into the A Shau Valley. The Com-
munists have built about 14 miles of pipeline north-
ward from the valley, and another 14 miles have to
be laid before the pipeline is operational. When
completed, it will allow Hanoi to ship petroleum
directly to its forces in this large military base
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*These items were prepared by CIA without consultation
with the Departments of State and Defense.
21 Sep 73
Central Intelligence Bulletin 13
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