CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026600010047-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Document Release Date: February 3, 2005
• Sequence Number: 47
• Publication Date: June 11, 1974
• Content Type: REPORT

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Top Secret
National Intelligence
Bulletin
Top Secret
June 11, 1974
Copy NQ 634
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National Intelligence Bulletin
June 11, 1974
CONTENTS
ITALY: Rumor government resigns. (Page 1)
FRANCE: Cancellation of one nuclear test probably to
avoid criticism. (Page 3)
THAILAND: Labor unrest creates political problems for
new Sanya government. (Page 4)
URUGUAY: President agrees to demands by the military.
(Page 9)
FOR THE RECORD : (Page 11)
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National Intelligence Bulletin June 11, 1974
ITALY
A fundamental dispute over the critical state of the
economy was responsible for the resignation yesterday of
Italian Prime Minister Rumor's center-left government.
The coalition partners disagreed on how to combat the
enormous trade deficit: and record-breaking inflation.
Italy's largest party, the, Christian Democrats, in-
sisted on monetary restraints and across-the-board tax
increases to curtail domestic demand. The Socialists
favored loosening credit and making tax hikes selective
to shield low-income groups.
President Leone has asked Rumor to head a caretaker
regime during negotiations for a new government. Two
center-left governments have already collapsed this year
over economic austerity measures, and the thought of
forming still another will not generate much enthusiasm.
The center-left formula, however, is easier to criticize
than to replace.
If the negotiations are contentious and long, they
will add weight to the argument of the Communist Party,
Italy's second largest, that the country cannot be gov-
erned effectively without its participation.
The severity of the economic situation is probably
the most important factor favoring a quick solution.
The Socialists, as well as the Communists, have become
alarmed over increasing neofascist violence in recent
months, and they may come to believe that a climate of
violence would be nourished by a lengthy political stale-
mate and further economic disruption. They might agree
to some austerity measures now, in return for promises
of support for their programs once the economy is in
better order.
Rumor's resignation was preceded by an announcement
that the trade deficit: in April had again topped $1 bil-
lion, pushing the deficit in the first four months of
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National Intelligence Bulletin
June 11, 1974
the year to over $4 billion. About half this deficit
results from petroleum imports. Also contributing is
a growing demand for quality food products, which Italy's
backward agricultural system cannot provide. The demand
has resulted from rapidly rising wages in recent years.
Italy has been unable to obtain foreign loans to
cover the deficit, except for a $1.2-billion standby
credit from the International Monetary Fund. The head
of the Italian central bank claims that the country's
credit has been exhausted.
The government has resisted devaluation because its
short-term effect would be to aggravate inflation, which
is already running at 25 percent.
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National Intelligence Bulletin June 11, 1974
FRANCE
President Giscard d'Estaing's cancellation yesterday
of one of the scheduled atmospheric nuclear tests in the
:1974 series probably is designed to avoid intensified crit-
icism of the testing, He cited "financial reasons" for
the cancellation, but since most of the financial invest-
ment in the weapons is centered in research and develop-
ment rather than testing, the savings would be relatively
small
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THAILAND
Labor unrest is heating up the political situation
in Bangkok. Thousands of textile workers, fearful of
massive layoffs, occupied the Labor Department compound
over the weekend. Student radicals have joined the dem-
onstrators and are encouraging them to strike, Unless
the situation can be defused quickly, the strike movement
may spread and threaten the stability of the two-week-old
Sanya government.
Radical student and labor leaders are using the pro-
tests as a platform to voice their own political views.
Their speeches have taken on an antigovernment and anti-
US tone that is sure to alarm the more conservative rul-
ing elite
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President Bordaberry's accession to a number of de-
mands by the military may have strengthened his hold on
the office, at least for the time being.
Top officers have met twice with the President since
a squabble within the army resulted in the replacement
late last month of the relatively moderate army minister
and some of his supporters. The officers presented Borda-
berry with a requirement that certain cabinet, members be
replaced with individuals more to their liking, and that
all subministers be active-duty military men. While the
President will participate in the selection of the new
ministers, his already eroded authority clearly is dimin-
ished further.
The President also lost a debate in which he took
exception to the officers' proposal that price reductions
be decreed for meat, kerosene, and other items. Bordaberry
reluctantly agreed to sign the reductions into law. Fi-
nally, the military have placed four colonels in positions
of responsibility in the municipal government. of Monte-
video.
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Israel-Egypt: An Israeli patrol boat seized a small
Egyptian cargo vessel on the morning of June 9 and es-
corted it to the port of Haifa. Israel claimed that the
vessel penetrated Israeli territorial waters.
The Egyptian vessel was on its way to Lebanon
when, according to the Israeli radio, it apparently en-
countered navigational problems and strong winds which
forced it toward the Israeli coast. Israeli officials
are not highlighting the incident and presumably will
release the vessel soon, as they did in a similar inci-
dent earlier this year.
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Top Secret
Top Secret
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