CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026300020001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: May 12, 2004
• Sequence Number: 1
• Publication Date: March 28, 1974
• Content Type: REPORT

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Top Secret
fJ '
Central Intelligence Bulletin
State Dept. review completed
Top Secret
3 G, 8
C
March 28, 1974
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March 28, 1974
Central Intelligence Bulletin
CONTENTS
ISRAEL-SYRIA: Motivation for Syrian artillery firing
more political than military. (Page 1)
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EC: London expects continued French resistance to
collective consultations between EC and US. (Page 4)
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ROMANIA: Ceausescu's political position strengthened 25X1
by personnel and organizational changes. (Page 7)
SOUTH VIETNAM: Government increasingly concerned
about economic situation. (Page 9)
FRANCE-USSR: Largest aluminum manufacturer in Eu-
rope may build $1-billion complex in USSR. (Page 10)
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CHILE: Balance-of-payments outlook improves. (Page 13)
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ISRAEL-SYRIA: The level of artillery, tank,
and mortar re between Israeli and Syrian forces
.positioned along the Golan front flared abruptly
yesterday after several days of relatively minor
clashes. The exchange lasted over seven hours and
involved the entire sector of the Israeli-held sa-
lient into Syria,,
Although this exchange was initiated by Israeli
artillery, there is little doubt that the clashes
over the past 16 days have been orchestrated pri-
marily by Damascus, The marked fluctuation in
intensity during this period suggests that the
Syrian motivation is more political than military.
The Syrian leadership probably views the continua-
tion of some level of armed conflict as necessary
to maintain a strong negotiating position, as well
as to demonstrate to the Arab world that the regime's
basic militancy against Israel has not been eroded.
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EC: British officials are sympathetic to the
US desire for more meaningful consultations with the
EC Nine, but they have cautioned that the US should
not have "excessive expectations" about London's
ability to bring about changes in the EC decision-
making apparatus. Although they consider good rela-
tions with the US vital, the British also want to
avoid the risk of France's striking off on its own,
free from the "modest constraining influences" of the
Nine.
London anticipates that the French will continue
to resist the German-proposed procedure that would
have talks with the US take place during the Nine's
process of internal deliberations. Paris' position
is that France will only agree to the president of
the Nine consulting with the US once the Nine are
unanimous on a matter of mutual US-European interest.
The British maintain that, in the absence of
collective consultations between the Nine and the US,
greater bilateral consultation might serve the same
purpose. Nevertheless, London is clearly concerned
that the French would not feel bound under such
circumstances to consult with the Nine on French
policies, for example in the Middle East.
Italian Foreign Minister Moro, meanwhile, has
demonstrated his sensitivity to Italy's apparently
being left out of bilateral US talks, such as those
with London and Bonn. Moro favors collective EC
Nine - US consultations, but stresses that they must
be mutual and should not imply a US veto over Euro-
pean affairs.
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ROMANIA: The personnel and organizational
changes announced on March 26 considerably strengthen
the political position of party and state chief Ceau-
sescu. They do not portend any significant changes
in Romania's foreign or domestic policy.
The changes, which were made public at the end
of a two-day Central Committee plenum, conform to
the Romanian leader's practice of frequently shifting
party and state officials. He views this as increas-
ing efficiency by maintaining a balance of loyalty
and expertise.
The most significant shift was the retirement
of 72-year-old Premier Maurer "because of health and
age" and his replacement by Manea Manescu, a former
deputy premier, one of Romania's leading economists,
and a long-time adviser to Ceausescu. Ceausescu
evidently found a convenient opportunity to retire
Maurer with honor and to replace him with a man whose
pliability further tightens the Romanian leader's
control of the party and state bureaucracy.
Retirement of the ailing Maurer has been rumored
for years. polit-
ical differences increasingly estranged-Elm trom
Ceausescu. No specific clashes are known, but Maurer,
like Ceausescu, is strong-willed, and the two reportedly
have differed over economic questions and over Ceau-
sescu's growing "cult of personality"--including the
rapid political rise of Ceausescu's wife, Elena.
Other personnel changes involve mainly promo-
tions or transfers of individuals whose backgrounds
suggest increased emphasis on economic efficiency,,
including foreign trade. The only apparent serious
loser is Virgil Trofin, who lost his posts as deputy
premier and minister of home trade. He was assigned
to unspecified "party activity," perhaps at the
county level.
The plenum also called for a constitutional
change that would establish an office of president
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of the republic and recommended that Ceausescu be
elected to this post. He will evidently continue to
hold the title of president of the Council of State.
In addition, the plenum abolished the party's
permanent presidium (politburo), but established an
elite party and state body, the Standing Bureau,
which will be charged with daily coordination of both
party and government activity. The formulation of
national policy will remain in the hands of the
party's powerful executive committee. Establishment
of the Standing Bureau--to which Ceausescu was, of
course, named--conforms to his long-term program
combining parallel party and state positions. It is
also aimed at reducing and increasing
economic efficiency.
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SOUTH VIETNAM: Saigon is becoming more concerned
about its economic situation. President Thieu has
told US officials that economic problems are now more
serious than the military threat. and that his advisers
recognize that mounting inflation and the possibility
of diminished aid levels will produce a worsening
economic situation during the coming year.
For the moment, however, the government appears
to be planning no changes in basic policy and hopes
to cope with the situation through belt-tightening
and other measures
The government has been trying to improve South
Vietnam's international image because it fears that
economic difficulties may be aggravated if it fails
to get sufficient foreign aid,, Concern that the US
Congress might reduce aid requests apparently is one
of the motives for the recent intensified drive
against corruption and efforts to improve the govern-
ment's performance.,
Khiem has asserted that. the government must dem-
onstrate its ability to present well-researched aid
projects and that money received must be spent respon-
sibly for projects of lasting value. Thieu also wants
to appoint a new deputy prime minister who can coor-
dinate economic affairs among the ministries, but he
says he has not yet been able to find a candidate with
sufficient prestige for the `ob.
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FRANCE-USSR: Europe's largest aluminum manufac-
turer, Pechi,ney-Ugine-Kuhlmann, may soon sign an
agreement in principle to build a $1-billion aluminum
complex in the USSR, Final agreement with the Soviets,
however, may not be reached for several months.
The complex would include construction of an
alumina refinery near the Black Sea with a capacity
of 1 million metric tons per year, as well as a
500,000 ton-per-year aluminum smelter near the hydro-
electric station now being built in southern Siberia
and a plant to manufacture anodes. The bauxite re-
fined in the Black Sea plant will be imported for the
first years of operation.
A number of details--principally relating to
financing and counterpurchases--remain to be worked
out, The Soviets would like to finance the project
on a self-liquidating basis, whereby the value of
Soviet imports of French equipment and technology
will be covered by a French guarantee to purchase an
equivalent value in output from the plant. In addi-
tion, the Soviets would like to conclude an agreement
committing the French to buy specified quantities of
the plant's output for hard currency.
Moscow is also negotiating an agreement with
Kaiser Aluminum for a similar--but much larger--
aluminum complex. If both the Kaiser and Pechiney
deals are concluded, Moscow will be adding 4 million
tons per year to its alumina refinery capacity and
2 million to its aluminum smelter capacity, This
would roughly double both capacities, The Soviets
have expressly stated that the French and the American
projects are not competitive, but are part of Moscow's
long- ancre plans for expansion of the aluminum indus-
try.
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CHILE: Record copper exports combined with the
signing of the Paris Club agreement rescheduling some
$490 million in debt repayments due to major Western
creditors during 1973 and 1974 greatly improve the
outlook for Santiago's balance of payments this
year. The trade deficit will probably amount to
about $200 million, compared with. $574 million in
1972 and $348 million in 1973. Even with the debt
rescheduling and credits the junta has obtained from
the US, several Latin American neighbors, and inter-
national financial institutions, the balance-of-pay-
ments problem remains serious. Additional foreign
credits will be required to cover the deficit this
year.
Copper exports will earn an estimated $1.6 bil-
lion, pushing the total value of exports to about
$1?9 billion. An ambitious renovation program, which
lagged during the later years of the Allende admin-
istration, will boost Chile's copper production to a
new high of about 880,000 tons. Copper prices are
hovering near record levels and will probably continue
to be strong during the year as consumers rebuild
depleted stocks and speculators hedge against a pos-
sible US copper strike? Heavy food and petroleum
imports will help to raise the import bill to more
than $2.1 billion.
The Paris Club agreement reduced debt repayments
due major Western creditors to $175 million from the
$641 million previously due this year, A further
$100 million is due other creditors, largely Communist
nations and international institutions.
London's restriction of aid to Chile announced
yesterday will mean that the current foreign aid
program of about $1 million will be cut back., British
commitments of about $120 million to provide military
equipment will be honored, Since the coup, most Com-
munist countries and some West European nations have
canceled or suspended unused credits to Chile totaling
some $145 million,,
Mar 28, 1974
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