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September 23, 1976
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pprR RG a ease . CIA-RDP79T00975AO2930Q,Q1 03 5 NAME AND ADDRESS DATE INITIALS I o Secret DIRECT REPLY DISPATCH FILE INFORMATION PREPARE REPLY RECOMMENDATION RETURN SIGNATURE (Security Classification) Access to this document will be restricted to those approved for the following specific activities: NATIONAL INTELLIGENCE DAILY CABLE Thursday September 23, 1976 CI NIDC 76-224C NATIONAL SECURITY INFORMATION Unauthorized Disclosure Subject to Criminal Sanctions Top Secret _ Approved For Release 2007/03/07 : CIA-RDP79T00975A02tJ 01'0 r1pu- glauf e State Dept. review completed 25X1 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29300010038-5 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29300010038-5 Approved For National Intelligence Daily Cable for Thursday, September 23, 1976. The NID Cable is for the purpose o in orming senior US o icials. CONTENTS LEBANON: Situation Report USSR-SYRIA: Moscow Reducing Criticism FRANCE: Economic Program Announced CHILE: Letelier Assassination YUGOSLAVIA: Tito's Health Improved Page 1 Page 3 Page 4 Page 6 m Pa 25X1 SPAIN: Cabinet Change UK: Seamen's Strike Averted EC: Obtacles to European Parliament UNESCO-ISRAEL: UN Mission Refused INDONESIA: Alleged Plot Page 12 Page 13 Page 13 Page 14 Page 15 Approved For Release 2007/03/07 : CIA-RDP79T00975A029301010038-5 Approved For R*Iease 2007/03/07 : CIA-RDP79T00975A029 LEBANON: Situation Report I President-elect Sarkis is scheduled to take the oath of office at noon today in the Syrian-occupied town of Sha- turah, despite threats by some leaders--most notably Prime Minister Karami and leftist Kamal Jumblatt--to boycott the ceremony. Speaker of the House Kamal al-Asad expects between 65 and 70 of the 99 parliamentary deputies to attend;I 25X1 I Ispeculate that 42 Muslim deputies will refuse to make the trip. Al-Asad has said that Sarkis will be sworn in even in the absence of a quorum. I IKarami's refusal to attend the ceremony is probably ess an a tempt to undercut Sarkis than to portray himself as opposed to Syrian control of Lebanese politics. Karami has co- operated with Damascus in the past, but since Syria began sup- porting the Christians, he has attempted to preserve his cred- ibility with his Muslim constituency by arguing for a Lebanese rather than a Syrian solution to the crisis. I ISarkis' inaugural address is expected to focus on is p ans for trying to resolve the Lebanese conflict--the first indication of his thoughts on the matter. He may spend the night in Shaturah in order to attend another Syrian-Pal- estinian-Lebanese meeting scheduled for tomorrow. meetings, has apparently asked Syrian President Asad to attend tomorrow's scheduled session. According to a Lebanese news- paper, however, the conference may well be postponed as a re- sult of the earlier lack of progress. Approved For Rel4ase 2007/03/07 : CIA-RDP79T00975AQ29300010038-5 Sarkis, reportedly depressed by the results of the Approved Foil IShamun has been maneuvering to shore up his own po- se on in the new regime. Earlier this week he had publicly asserted that taking the oath of office outside Beirut would render the inauguration unconstitutional, presumably to give him an opening to cause trouble later if he decides to do so. 25X1, Approved For Release 2007/03/07 : CIA-RDP79T00975A049300010038-5 Approved Fo Heavy fighting is continuing in Beirut; there have been outbreaks of intense shelling, and sniper fire in the downtown area has virtually closed off the crossing point near which Sarkis was originally scheduled to take his oath of of- fice. Clashes were particularly heavy yesterday in the south- ern suburbs of Shiyah and Ayn Rummanah. I Much of the activity in the Mount Lebanon area was con to intense shelling, although a tank duel was re- ported at Alayh. The Christians report heavy fighting in the eastern section of the of Tripoli. I I Moscow is cutting back on its criticism of Syria and ridy e trying to move all sides involved in Lebanon toward a political settlement. The USSR has been more evenhanded toward the S rians y and the Palestinians in its recent public statements on Lebanon. On September 8, an authoritative "Observer" article in Pravda for the first time upbraided "leftist elements" of the Palestine Liberation Organization, along with Damascus, for failing to achieve a cease-fire. Soviet public statements on Syria have also softened in recent weeks, and the central press has stopped calling for a Syrian troop withdrawal. On Monday, a Soviet diplomat in Cairo told US offi- cials that Moscow was urging both the Syrians and the Palestin- ians to reach a compromise. The Soviets have reportedly been using "friendly persuasion" to try to get Syrian President Asad to adopt a more impartial position on the Christians and Muslims in Lebanon, while at the same time pressing the Palestinians to be more accommodating with the Syrian leadership. Approved Fq USSR-SYRIA: Moscow Reducing Criticism Approved Vladimir inogradov, the co-chairman of the Geneva conference on the Middle East, to Damascus was meant to put pressure on Syria. Syrian Deputy Foreign Minister Rafai remarked that Vinogradov was more interested in relating the Lebanese crisis to a resumption of the Geneva conference. An article in Pravda by Yury Glukhov last Sunday called or a solution to the Arab-Israeli crisis as a prerequi- site to ending the Lebanese entanglement. The Soviets for the past several months had reversed the order of those two priori- ties. Glukhov also emphasized the "urgency of the speediest convening" of Geneva. We have seen no indication that Soviet efforts to restrain the Syrians include a suspension of either military or economic aid. Soviet arms carriers continued to arrive at Syrian ports during August and September. FRANCE: Economic Program Announce I Prime Minister Raymond Barre yesterday announced his lded economic program, aimed mainly at bringing the French inflation rate out of the double-digit range. The Soviet official said that the recent visit of The main features of the program are: --A three-month freeze on most prices. --A package of fiscal measures whose net effect will be a moderate tax increase hitting higher income groups and business. --Imposition of an anti-inflation tax on business. --Slower monetary growth. --Measures to increase investment in plant and equipment. --A $1.2-billion aid package for drought-stricken farmers. Approved For Release 2007/03/07 : CIA-RDP79T0097 Approved Fo Notable for its absence was any mention of controls on wages -!a key inflationary factor--which have been rising recently at a 17-percent annual rate. I IBarre said only that wages "should" rise at the same rate as prices for the next year. With the major unions opposed to the Giscard government, such pleas for moderation are likely to fall on deaf ears. The government, however, will try to set an example in its own wage negotiations. The government's measures should have a positive short- term t, holding consumer price increases near zero during the last quarter of the year. In addition to the price freeze, the value added tax on a wide range of products will be cut. A similar tax creases tor about three measures, however, will of inflation. cut in 1973 sharply slowed price in- months. Neither of these temporary directly affect the underlying causes The real test of the program will come early next year when the price freeze expires. Barre hopes that the projected sharp improvement this fall will reduce expectations about fu- ture inflation and thus induce both business and labor to behave more moderately. I Tax increases--including a 4-percent boost in the corporate rate, and a 4- to 8-percent increase for higher in- come individuals--will also help somewhat, but are not sufficient in themselves to change the basic inflation picture. At best they may help bring the government budget back into equilibrium in 1977, following a moderate deficit this year. Potentially more significant is the new anti-inflation I ax on nu!liness, which has been on the books for the last two years but has not yet been implemented. A uniquely French inno- vation, the tax is intended to dissuade firms from raising prices and indirectly to force them to take a firmer stance in wage negotiations. On balance, the French inflation rate during 1977 should be lowered by the new program. The rate will still be Approved For (Release 2007/03/07 : CIA-RDP79T00975A02$300010038-5 Approved For Ro high, however, possibly close to 10 percent. So much inflation- ary pressure has already been built into the French system-- especially the recent large rises in wages, money supply, and imported raw materials prices--that .a more dramatic improvement seem ,, ' k -- s n e CHILE: Letelier Assassination I //The assassination Tuesday of former ambassador Orlando Lete ier is already causing problems for the Chilean government, which is being generally blamed for the murder.// //Opponents of the Chilean junta are pointing to e e ier s employment by the Institute for Policy Studies as the most probable reason for his murder. His studies there re- portedly were influential in persuading the Netherlands recently to deny a loan to Chile and to boycott Chilean products--actions cited by the Chilean government in depriving Letelier of his citizenship earlier this month. He was also an active lobbyist against US economic and military aid to the junta.// 1//Exiled Chileans have played a prominent role in the campaign to discredit the military government. Their major centers of activity have been in Italy, France, Sweden, Finland, and the UK. Pockets of exiles are also scattered throughout Western and Eastern Europe, as well as the US. Many are members of solidarity and resistance movements that spread antijunta propaganda.// I /Several attempts were made this year to form a united opposition movement. A joint exile organization was founded in Mexico earlier this year headed by former president Allende's foreign minister Clodomiro Almeyda. Previous attempts to coordinate and solidify exile activities have failed.// /The Chilean government will have a hard time s that it was behind Letelier's assassination. Leftist opponents of the junta, who have the most to gain from the incident, are already accusing Chilean intelligence services of complicity.// 25X1,1 Approved For (Release 2007/03/07 : CIA-RDP79T00975Ag29300010038-5 Approved Fc /The opening of the UN General Assembly in New York wi give the junta's enemies a clear opportunity to focus world attention on the issue of human rights, and the Letelier killing will be used as fresh ammunition. 25X1 25X1 Approved For R*Iease 2007/03/07 : CIA-RDP79T009754 Approved For Rele YUGOSLAVIA: Tito's Health Improved I President Tito left Belgrade last weekend to visit Be je in Slavonia. The original forecast by Yugoslav officials had been that Tito would stay in Belgrade--though not hospitalized--for treatment of an acute liver condition. The fact that his doctors approved his travel to Belje, which is about 150 kilometers (93 miles) from Belgrade, suggests that the 84-year-old President is responding well to treatment. I I On Monday, Tito received a delegation of top federal 25X1 and repub is officials. A short announcement on the meeting said that his recuperation is progressing well. 25X1 25X1 Approved For 4elease 2007/03/07 : CIA-RDP79T00975A029 00010038-5 25X1 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29300010038-5 Next 2 Page(s) In Document Exempt Approved For Release 2007/03/07 : CIA-RDP79T00975AO29300010038-5 Approved Fo SPAIN: Cabinet Change Gutierrez, who is close to King Juan Carlos, is likely I I The Spanish government yesterday named General Gutier- rez to e first deputy prime minister in place of General San- tiago. to be a more effective spokesman for the government's liberaliza- tion program than was Santiago, who has ties with the Spanish right wing. Juan Carlos reportedly wanted Gutierrez as deputy prime minister even before he ousted the Arias government last July, but he apparently was stymied by conservative opposition. He did, however, push the appointment of Gutierrez to be army chief of staff in June. He may have felt that, in view of the support Prime Minister Suarez received from senior generals when he briefed them on the reforms two weeks ago, the time had come to move Gutierrez to the deputy premiership. I IThe sudden ouster of Santiago is likely to be viewed wi some concern by the more conservative generals, but they may be partially mollified by a high award the King will confer on him today. The government may also be able to point to San- tiago's health problems--he had a massive heart attack in 1974-- as justification for his removal. It seems unlikely that the King's backing within the military will be significantly eroded by the move. Approved Approved Fo UK: Seamen's Strike Averted //The national seamen's strike in the UK, set to begin next Sunday, was averted yesterday by the successful 22- hour bargaining session between union officials and shipowners.// //The seamen, who had been demanding a special wage boost that exceeded the government's "phase two" guidelines, settled instead on a package of fringe benefits. Because the benefits are unique to the shipping industry, most other unions will find it difficult to use the seamen's agreement as a prec- edent for demanding substantial extra benefits for their own members.// //Nevertheless, an official of the government's conciliation and arbitration service told US diplomats that the settlement "will cause a lot of headaches for the new government during the next six months." The miners, in particular, will be pursuing a demand for a reduction in the age for retirement.// /A key element in the settlement was the ship- owners' agreement to allow extra time off for seamen required to remain on board ship without working and without pay. Other fringe benefits included improved allowances for food, travel, and other expenses and payments for periods of idleness between ship assignments. r7~ -1 EC: Obstacles to European Parliament I //EC foreign ministers formally codified this week a decision made by the European heads of government last December to hold direct elections to a European Parliament, but obstacles remain that could delay ratification by the nine national parliaments.// I //In the preamble to the act, the member countries promise to their best to hold direct elections in May or June 1978, although they are not legally committed to that date. A firm date will be set by the Council, presumably after the nine national parliaments have ratified the act and passed enabling legislation.// Approved For (Release 2007/03/07 : CIA-RDP79T0097AA029300010038-5 Approved For Re //The UK and France are the only states where rata icati.on is expected to be a major problem. The British Parliament begins debate this fall on the related issue of home rule for Scotland and Wales, and this could delay consid- eration of the European Parliamentary issue, possibly until spring. The Liberals are insisting that the legislation pro- vide for proportional voting--which would increase their num- ber of seats substantially--and they have threatened to link this demand with support for the devolution bill.// //British Foreign Minister Crosland noted his concern in Brussels that "genuine constitutional difficulties"-- as well as procedural problems such as the drawing up of new electoral districts--may prevent the British from holding direct elections as scheduled. While Crosland maintains that the UK's inability to meet the deadline should not prevent the other eight from going ahead, the French are likely to resist making an exception for the British.// //In France, ratification promises to be one of the most ivisive issues before the National Assembly this year. President Giscard faces vigorous opposition from Commu- nists on the left and hard-line Gaullists on the right, both of whom oppose direct elections on the grounds that they will eventually lead to increased powers for the European Parlia- ment at the expense of on the other hand, are this would strain their national inclined sovereignty. The Socialists, to support the bill, although alliance with the Communists.I 25X1 25X1 //Israel has refused at this time to accept a -sponsore mission to observe educational and cultural policies in its occupied territories.// //The proposal for the UNESCO mission is largely a persona initiative of the organization's director, Amidou M'Bow--the first black African to head a major UN body--and it was taken in response to a resolution passed at the general conference in 1972.// Approved Fora Release 2007/03/07 : CIA-RDP79T009754029300010038-5 Approved //That meeting passed three anti-Israeli reso- lutions tnat e to a boycott of UNESCO-sponsored activities by prominent intellectuals of several countries, as well as a suspension of US financial contributions to the organization. M'Bow has consistently tried to mitigate the effects of these resolutions, despite criticism from Arab and other third world states.// //Israel's refusal to receive the mission-- claiming a he opening of the school year and the approach of the Jewish. religious holidays made it impossible for local officials to receive the group at this time--is likely to bring further anti-Israeli action at the UNESCO general conference that opens in Nairobi next month. INDONESIA: Alleged Plot I The announcement in Jakarta of an alleged plot to over row the Suharto government probably is aimed at dis- couraging criticism and intimidating potential opponents prior to the general election next May. //In view of the regime's pervasive secur I controls an e disarray of the political opposition, it is unlikely that a serious conspiracy was under way. Although the election is still more than half a year away, preparations are already well under way. We expect that the government-controlled coalition of interest groups that serves Approved ity Approved Fob as the official party will return Suharto to power with a com- manding majority. The regime's principal concern is to surpass the 61-percent majority Suharto received in the general election in 1971. Although the administration has permitted some discus- sion of shortcomings in the economic and social spheres, it has now served notice that criticism of the leadership will not be Approved F V 1 0 0 1 0 0 r (Security Classification) or e ease - - CrOu Top See i. F R l 2007/03/07 CIA RDP79T00975A029300010038 5 Top Secret (Security Classi pNo6d For Release 2007/03/07 : CIA-RDP79T00975A029300010038-5 I Aw Aw Aw Aw " AMW 'Aw mw mw AA