JPRS ID: 9268 USSR REPORT AGRICULTURE

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000300080040-6
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 27
• Document Creation Date: November 1, 2016
• Sequence Number: 40
• Content Type: REPORTS

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000300084440-6
FOR OFFICIAL USE ONLY _
JF'RS L/9557
19 February 1981 _
We~t Euro e Re ort
p p
(FOUO 9/81)
- FBIS FOREIGN BROADCAST ONFORMATION SERVICE
FOR OFFICIAL USE ONLY
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
NOTE
JPRS publications contain information primarily from foreign
newspapers, periodicals and books, but also from news agency
transmissions and broadcasts. Materials from foreign-language
sources are translated; those from English-language sources
are transcribed or reprinted, with the original phrasing and
othe: characteristics retained.
Headlines, editorial reports, and material enclosed in brackets
are supplied by JPRS. Prccessing indicators such as [Text]
or [ExcerptJ in the first line of each item, or following the
last line of a brief, indicate how the original infcrmation wa~
processed. Where no processing inclicatar is given, the infor-~ ~
mation ti s summarized or extracted.
Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
item originate with the source. Times within items are as
given by source.
The conrents ot this pub?ication in no way represent the poli-
cies, views or attitucles of the U.S. Government.
COPYRIGHT LAW~ AI~1D REGULATIONS GOVERNING OWNERSHIP OF -
MATERIALS REPRUDUCED HEREIV REQUIRE THAT DISSE~IINATION
JF THIS PUBL~C~TI~N BE RESTRI~TED FOR OFFICIAL USE ONI,Y.
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
JPRS L/9557
19 ~'ebruary 19 81
WEST EUROPE REPORT ~ ~ -
(FOUO 9/81) '
CONTENTS
THEATER FORCES
FRANCE
Briefs
Defense System Test 1
ENERGY ECONCQ'IICS
ITALY
Overview of Nation~s Energy Situation
(Albert Clo; ENERGIA, Sep 8Q) 2
COUNTRY SECTION
~'RANCE
Brief s =
PCF Special Assessment 20 `
Qadh~ihafi on TV 20
SPAIN
i'ol?tical Biographic Profiles of High-Ranking UCD Zeaders
(LA OTRA HISTORIA DE UCD, 1980) 21
- a - [III - W~ - 150 FOUO]
_
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY -
THEATER FORCES FRANCE
,
BRIEFS _
DEFENSE SYSTEM TEST--France is ~oing to brandisti its sword in no uncertain way.
Giscard will attend the momentous maneuvers in Provence be~ween 16 and 22 March ,
which will involve 20,000 to 30,000 troops landing between Toulong and Cavaliere.
The 2nd marine infantry regiment (Rima), supported by the 2nd overseas infantry
' regiment from Corte and Bonifacio, will try to advance up the Rhone Valley and
attack the Albion Plat~au [missile si14s].. The 18 nuclear missile silos there will
- be defended by the 27th alpine division (plus some Spanish mountain regiments).
The objective is twofold: to test the Frencl~ defense system and the foreign inter- _
vention units of the famous 31st demibrigade (the prime weapon in Giscard's Africa
policy). [Text] [Paris L'EXPRESS in French 24 Jan 81 p 92]
CSO: 3100
_ 1 -
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2047102108: CIA-RDP82-00850R000300080040-6
FOR 0~'FICIAI. USE ONLY
ENERGY ECONOMICS T.'cAL~
- OVERVIEW OF NATION'S ENERGY SITUATION
- Rome ENERGIA in Italian Sep 80 pp 48-5$
(Article by Albert Clo, of the Institute of Business Economica, University of M4-
dena: "The Italian Energy Situation: Problems Old and New"]
[Text~ 1. 2reratory Note
For the reasons that we set out in the introductory note to this first issue of EN-
_ ERGIA, any analysis of uur country's energy situation, and particularly of its oil
situation, runs the risk of arriving at evaluationa t~at are sametimes partial, if
not simply wrong, because of the absolute scarcity and the fragmentary nature of
timely sCatistical information to which to refer.
From the necessity of making use of information sources of various origins, and
therefore often not homogeneous and congruent with one another, we draw the methodo-
logical guideline that we must give major emphasis, in our analysis, to aspects of a
structural character vis-a-vis other more typically situational aspects, from which,
moreover, the latter largely derive their relevance.
In view of the 3ifficult situation in which our country has faund itself in recent
years (squeezed, abroad, by ~he crisis in the markets from which we traditionally
get our supplies, and domestically, by the impossibility of getting any energy-
policy choice under way), we consider that the aspect to which most attention must
be given nas to be that of energy supplies.
Although we do not wish to disregard the interest of analyzing other variables, such
as prices or demand--checking, for example, the results achieved with the demand-
control policies recently put into practice--we consider that, especially on the
aunply side, there have been manifested in Italy strong concerns and serious limits
in the capacities and poesibilities of intervention. This is all the more important
. if one considers the fact that in Italy, in contrast with foreign countries, the
structure of supply for the 1980's can be said to be substantially given, if one tx-
cludes shifrs, not of grea*_ relative irnportance, toward natural gas and coal.
Maximum dependence on importe~ oil will therefore remain the underlying characteris-
_ tic of the entire Italian energy situation in the near future, since nuclear power
will not show any important changes.
2. The Sources of Reference
_ It seems necessary to us to devote a few words at the beginning to the statistical
sources to which reference has been and will be made, distinguishing the quantity
situation from the situatior? rela~ive to prices.
2
FOR OFFICIAL USE ONLy
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
To a certain exte.nt, the latter appeare more reassuring than the former, even if, as
= regards amny aspects of the problem, we are still at information levels that are far
inferi~r to those to be found in most other countries.
' With reference to the oil sector in particular, to which we shall devote greates~
attention, the price-control regime to which this sector ia ried makes it posaible,
if nothing elae, to know, through publication of the Interministerial Price Commit-~
_ tee (CIP) Provisions in the GAZZETTA UFFICIALE, the maximum prices of those petrole-
um Froducts that are fixed administratively and which, all together, constitute
about half of total consumption.
However, the lists of petroleum products subject to a"surveillance" regime are not
officially divulged. For most of them (fuel oil), th~ugh, there is official diffu-
sion through the STAFFETTA PETROLIFERA QUOTIDIANA, which periadically reports the
lists relating to each distributing enterpriae and to the principul categories of
consumers.
With regard to the ef�ective consumer prices, since fixing of prices occurs at such
= level only for Che products for automotive use and for domestic LPG [Liquid Petrole-
um Gas], thP periodic reports of information made by the Chambers of Commer.ce rela-
tive to several major Italian markets can be of some help.
But the information situation as regards the national petroleum quantity balanc~-
sheet is quite different and far unhappier.
Officially, the anly situation data available on a monthly basis are the pekroleum
producers' releases for consumption (although they are not divulged through public
sources) and those on foreign trade published by the ISTAT [Central Statistics In-
stitute]. No data are officially released--except, in some cases, partially, and in
any case, with tremendous delays--on the other basic Lomponents of the petroleum
balance-sheet: that is, national production of crude (however unimportant it may
be), and 2specially, the variation of the primary reserves in the production system
and of secondary reserves in the distribution and consumer system.
_ In the absence ~f these elements, and also by reason of certain delays and incon-
gruencies i.n the ISTAT information reporta on foreign trade, the difficulties one
- faces in formulating a meaningful petroleum balance-sheet from the points of view of
both availability and uses emerge clearly.
_ Bacause of these limitations, it has therefore been necessary to make use of. esti-
mates, sometimes partial, on the basia of data widely available from the operators
in the sector and especially from the ministerial offices to which the enterprises
are obliged to sQnd all sorts of information monthly.l
However, the greater part of this information is availabl.e to few, and in any case,
is almost al*aays qualified by "maximum reservation." Even in the rare cases in
which it was available to us, it was therefore not possible for us to refer to it
except indirectly and sporadically.
Other statistical sources of some interest (regarding both quantities and prices)
are the situation reports periodically released--officially--by the organisms of the
European Community snd by those of the International Ener,,y Agency (IEA) of Paris.
Even for such reports, though, it should be stressed that the data-gathering cri-
3
FOR OFFICIAL USE ONL~f
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
teria are not always clear, while their frame of reference oiten does not cover all
of the operators in each individual market.2
Nevertheless, the homogeneity of the methodo'i~gies used in the EEC and the IEA make
it posaible to have information elements by which to compare the oil situation in
almost all of the Western countries.
To complicate matters, g surprising decision was recently made by the Community or-
- ganisms of BrussPls to auspend, if only temporarily, the collection and diffusion of
a series of statistical data, for the purpose--it was written in the report on the
matter--to "ensure effe~tiv~ management of the data" themselves (!).3
3. Consumption Slowing Down
Despite the fact that in the first half of the year the Gross Domeatic Product [GDPJ
- showed considerable expansion (+6,2 percent over the corresponding period of 1979),
energy demand, expressed in primary sources, undervent a notahle deceleration of its
rates of growth (+0.~ percent over the firat half of Z979) as compared with the
rates of the preceding 3-year period (average of +1.7 percent per year).
The dynamic of the consumption in the first half-year confirma the tendency--under
~ay for a decade nos~--toward a reduction of the energy/output ratio in Italy.
From relative coefficient of elasticity value higher than 1.5 in the 1960's we went
_ to values of around 0.8 in the succeeding decade, whil.e values even conaiderably
lower have been not~d in the last 3-year period (0.4), and especially in the first
half of 1980 (0.13).
The complexity of the phenomena that may have led to such a reault, certainly not
foreseen in these terms, does not make it poss~ble to draw facile and necessarily
_ positive conclusions about the reactivity of our system to the variations in rela-
tive energy prices that occurred in the 1970's. It has certainly been high, and
such, at least, as to contradict the obsessive pretext of those wr,~ continue to de-
pict the Italian consumer as a ter:acious devourer of energy, but we ~aould not like
_ part of the results achieved to be due to a negative substitution u� imported goods
for goods earlier produced domestically (something that might have i:appened in the
chemical ~ndustry): this would certainly not counterbalance the "positive" effects
achieved in reduction of the direct uses of energy. If one could, t~ypothetically,
produce an accounting of the indirect uses of energy implicit in imported goods
- (earlier produced domestically), we would probably find a smaller reduction of ener-
gy uses per unit of output than what has been regiatere3.
- The substantial stability of energy consumption in the first half of 1980 resulted
from a 2-percent contraction of private domestic consumptiQn4 and from the even
greater contraction by the petroleum industry (because of the sharp reduction in ac-
tivity, especially vis-a-vis foreign countries), while the other sectors of consump-
= tion--industry, transport and thermoelectric power generation--registered increases
--again, over the correspondin~ period of 1979--of between 4 percent and 5 percent.
~ The drop in demand in the domestic sector is concentrated entirely on oil uses (es-
sentially for heating) (-8 percent), while there was stability for natural gas and
an increase of about 4 percent for electrical energy. The lower demand for petrole-
- um products for heating (which represents about 15 percent of total energy demand in
, ~
FOR OFFICIAL LTSE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-00850R040340080040-6
FOR OFFICIAL USE ONLY
the ~ountry) may be attributable in part to the good climatic conditions, but also
to the inarease of about 60 percent in the real prices of gas-oi1.5
Italy: Energy Consumption (1,000's of tona of oil-equivalent)
- By nrimary aources -
lat half let half Variation
1979 1980 (%6)
Coal 5.1 6.0 +17.2
hatura 1 gas 12 .1 12 , 3 + 0. 8
oil 52.3 51.4 - 1.7
~ Electrical energy 6.3 ~ 6.9 + 8�2
Total for primary sourcea: 75.9 76.5 + 0.8
Consumption and losses (8.1) (1.8) - 3.0
Energy used 67.8 68.7 + 1.2
- By sectora -
lat half lat half Variation
1979 1980
Industry 26.2 27.3 + 4.2
Other commercial uses 22.5 22.0 - 2.1
Non-energy uaes 4,5 4.7 + 4.5 -
Tranaport 12.0 12.5 + 4.2
Bunkering 2.6 2.2 -17.7
Totals 67.8 68.7 + I.2
Source: ENI [Nati.onal Hydrocarbons Agency]-AGIP [National Italian Oil Company]
A certain contribution--and u difficult one to quantify--may also be derived from -
the troubled "Dispositions for Containment of Energy Consumption" approved the first
time with decree-law No 438 of 14 September 1979. While something has been achieved
by means of theae "dispositiona," it is nevertheless attributable more to the psy- �
chological pressure exerted on consumers (by the fear of sanctions, which, however, -
were not applied) than to technical articulation of the "diapoaitions" themselves,
which have been judged by the experta to be entirely improvised and insufficient.
In the ficst part of the year, the national transport sector absorbed about 12.5
million tep [tons of oil-equivalent]--a little more than 16 percex?t of total demand.
Of the increase of slightly more than 4 percent over 1979, 60 percent is attribut-
able to the greater volume of highway freight (powered almost totally by gas-oil),
and the remaining 40 percent is due to increased passenger-auto transport, consump-
tion for which went up by 2.7 percent over the preceding year.
In evaluati.ng the significance of the further growth of consumption in theae areas,
_ despite the increase, at the beginning of last y~ear, of 55 percent in the real
prices of sutomotive gas-oil and 14 percent in that of gasoline, it is necessary.to
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
take into account the dynamic of the other explanatory variables, among which, in
particular, is the fact that the automotive fleet in use increased to 700,000 last
year to reach a total ~f 17.6 million units--4.2 million more than in 1973. ~
BuC the average mileage put on automotive vehicles is about 30 percent lower than
what was recorded in the early 1960's and lower to the same extent than what is be-
ing recorded today for the drivers of the other European countries.6
The sharp reduction in average mileage (induced also by the increase in the other
costs associated with automobile use~) has inevitably lowered consumers' rea~tivity
to the upward variations in prices--this beinga policy likewise conducted tenacious-
ly by our governmental authorities, even if, most of the time, it is from motives -
that go beyond policies of demand control, which can be achieved far more effective-
ly by rationalization of traffic in urban areas.
Variation of Real Conaumer Prices for the Principal Petroleum
Products in Italy as Compared with 1 ~anuary 1979
Super Automotive Gas-Oil for Dense ATZ CIF Cost
Gasoline Gas-Oil Heating Fuel Oil of Crude
1 January 1980 + 9.5 +50 +56 +56 +47
20 Ma-rch 1980 + 9 +53 +59 +54 +64
15 July 1980 +14 +55 +56 +55 +77
Although the consumer taxes on petroleum products have not been increased in propor-
tion to the dynamic of industrial prices (being for the most part specific taxes and
not ad-valorem taxes), they still represent close to 40 percent of the final (aver-
age) price to the consumer for petroleum products. This level is among the highest
within the framework of the industrialized countries. In addition, the greater part
of these taxes, as is known, hits consumption for autamotive use, gasoline in par-
ticular, in whose price the percentage represented by taxes is close to 63 percent
(it was 71 percent at the beginning of last year), as against 58 percent in France
and 48 percent in Great Britain and in the FRG, At the end of last June, in a rank-
ing of gasoline prices in the 13 major Weste�rn capitals, Rome held first place with a
price 2.5 times that of Washington and 10 percent more, on the average, than in the
major European capitals. If we do not count the taxes, we I~lummet to next-to-}.ast
place in the ranking, just ahead of the American canital.
Going on to analyze the structure of energy consumption by sources, we can note only
a slight shift from oil to coal: the drop of oil consum�ption by about 1 million tons -
(-1.7 percent) was paralleled by a nearly equal increase in uses of coal (+17 per-
cent [as published]). Use of natural gas remained almost constant, while there was
a considerable increase--close to 8 percent--for primary electrical energy, because
of the sharp rise of imports.
About half of the increased use of coal as a substitute for oil has been in the
electric-power sector--w?hich in the course of 2 years has seen the supplying of its
plants from this source increase from 5 percent to 10 percent--and the other half
has been in the industrial sector, especially in the working of nonmetallic minerals
(cement), production of which has stayed particularly ~igh in the first gart of the -
year.
6 ~
FOR OFFICIAL USE ONLy
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
The structure of petroleum consumption by type of product has undergone slight
shifts only: positive for the light and medium fractions (gasolines and gas-oils)
and negative for the heavy fractions. The distancing between the various fractions
, in the other European countries is far more marked, though; and in them, petroleum
consumption underwent a sharper decrease (-7 percent) in the first half of 1980 than
_ in Italy. Along with a 15-percent reduction for fuel oil and 8 percent for gas-oil
there was an average increase of about 3 percent for gasoline consumption. There is
thus a firming of the tendency within Europe (but far more in other countries than
in Italy) toward "lightening" of the barrel of oil consumed, which is gradually get-
ting closer--though still far away-~-to the typical structure of the North American
markets, where the light and medium fractions together are in a ratio of 4.5 to 1
with the heavy fractions, as against a 2-to-1 ratio in Europe and as cloae a one as
1.3 to 1 in Italy.
4. Haphazardness of Our Oil Suppliea "
While in the area of domestic energy demand the first part of the year does not pre-
sent any substantially new elements--if we exclude the manifestations of its first
symptoms of slowdown--changes of greater scope have occurred in the othe~ components
of the energy balance-sheet as regards in particular the flows of supplies of crude
and petroleum products froni abroad, the export flows of products, and the peroleum
reserve stocks.
These changes, by comparison of the first half of 1980 with the corresponding period
of the year before, can be summarized as follows:8
(a) a considerable contraction--about 20 percent--of crude-oil importation, which
went from more than 57 million tons to 46.6 million tons. However, about half of p
this reduction of availability of crude was compensated for by:
(b) a strong increase ~+112 percent) of importations of refined products, which went
from about 4.0 million to more than 8.2 million tons9, thus bringing to 10 percent
the drop in imports of petroleum and petroleum products, which was induced entirely
by:
(c) the vertical fall of petroleum exports (-55 percent), which plummeted from 14.3
million tcns in the first half of last year to barely 6.5 million tons this year;
� (d) substantial stability of the (primary) reserves of crude and products, which~
after a sizable reduction (7 percent) in the first quarter of the year, underwent a
_ corresponding revival in the second quarter, thus ma~ntaining the same levels as the
beginning of 1980, but proving 3 percent lower than those of the beginning of 1979. _
Our country, despite the great averabundance of supply at the international level
and the relatively advantageous prices of this period, is therefore one of the very
few countries in the world in which zhe procesa of buildup of primary reserves--
under way for more than 18 months now--has not occurreci. In this time span, our
European partners, for example, have increased their primary reserves by 13 percent.
At this point in ~ur analysis, it is useful to call attention to the tendencies im-
plicit in the changes cited above and to their significance within the Italian oil
Ii18�:~~ t .
There are two elements that it seems we should stress:
_ 7
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
(1) scai~ o~ carec,~w e Paoaom v~ttou~sai
?+n va~si c:,a.
M11.4wn
~2~ -
' r~ ~
110
~ (3)
~ ~ y
I T
~ ~
y ~ I
I ~
I ~~r~~~
i~~l
~ ~i
G ~r~
l4) ~
5) ~ .~.~,1
~
- G..6.vt.
to
'
OV^~~ ~ -_~r+~"~~ i
(8) ~ I
tv t u v tv t tt ~
( iv~e ~m a9ro ~
Key: ~
1. Reserves of Crude and Petroleum Products 4. FRG
in the EEC Countries S. France
2. 1,000's of tons 6. Italy
3. EEC 7. Great Britain
8. The Netherlands
Evolution of Primary PetroleuYn Reserves in Italy (1,000's of tons)
Crude Products Total Index
31 December 1980 6.5 17.4 23.9 lOp
31 March 1979 5.1 14.3 19.4 81 -
30 June 1979 6.0 15.1 21.1 98
30 September 1979 6.1 17,6 23.7 99
31 December 1979 7.1 16.0 23.1 97
31 March 1980 6.8 14.6 21,4 90
30 June 1980 7.2 16.1 23.3 97
--the extreme sensitivity--demonstrated once again--of our supplies to everything
that happens in the international situstion, to the point that our system seems com-
pletely lacking in any mechanism capable of attenuatin~ th e tensions coming in froni
the outside;
8
_ FOR O~FFICIAL USE ONLY
.
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-00850R000300084440-6
~
FOR OFFICIAL USE ONLY
--the tendency�--existing Eor more than a decade now--to increase, in our oil sup-
plies, the proportion of importation of refined products, which went from 3.5 per-
cent in 197Q to 17 percent for the first quarter of 1980, to the detriment of the
p~roportion of crude oi1.10 -
Roth of these elements constitute, in our judgment, factors of further vulnerability
of our energy market, which in itself is already heavily penalized vis-a-vis th~e
sit.uation in most of the other industrialized countries.
But while the domestic scarcity of energy resources (and therefor~ the obligatory
recourse to importation) and the relatively great2r energy-intensity of our produc-
tive system are structural facts that are very difficult to modify or tackle in a
brief space of time, the same cannot be said about the elements of distrubance that
almoct continually characterize every situational phase of our energy picture.
They are, indeed, solely the consequence of the nearly total absence of any market
� "guide" whatsoever (despite the legislation in force), and mor e generally, of the
lack of a policy of sectoria7. programming adequate to the structural problems to be
solved and capable of coping with the particular difficulties that might be envi- _
sioned at any moment.
Italy: Structure of Oil Supplies
Imported Products s,s
r� a~
Imported Crude : gs : QD ; n
Domestic Production L
~p0 ,4~~ i98D
- Source: BUROSTAT
5. Interests of Enterprises and National Interests
The result of the failure to apply standards for supervision of the most important
decisions taken by the petroleum enterprises is that they very often direct their
behavior toward requirements and ir.terests of an entrepreneurial type, and there is
no check beforehand, at the central level, of their congruence with the general in- _
terests of the country.
~ Although it cannot be maintained that the overall result of the decisions taken by
the enterprises is necessarily alway s in contradiction with the country's interests,
it is nonetheless true that in recent years, behavior without forethought by some
operators has had serious repercussions on the entire ~ational oil market, reducing,
on quite a few occasions, the entire country's credibility and trustworthiness
vis-a-vis certain exporting countries.
9
FOR OFFICIAL USE ONLy
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-00850R000300084440-6
_ FOR OFFICIAL USE ONLY
~ Thus, in our judgment, there could be conflict with national interests in the rela-
tive preference granted by some operators this year to importation of refined pro-
. ducts rather than to continuity of importation of crude oil. This situation is
quite similar to the one that occurred in 1977-�78, but entirely the opposite of. what
happened last year. Then, as will be recalled, many enterprises, left absolutely
- free to adhere or not to th e commitments taken An at the time of the preparation of
the National Supply Plan, p referred to devote part of their increased petroleum
availab ility to the more r emunerative foreign markets, thus causing artificial t~n-
sions in the domestic suppl y, for the purpose of achieving--as, in effect, did hap-
pen at the end of the year- -a general price increase well beyond the full cost of
the products sold domestically.
The average recovery on raw material was then increased from 23.4 to 29.5 dollars
per barrel (+26 percent): an increase of which one-third was due to r_ecovery of the
- differential of the average ex-refinery proceeds as compared with those of the other ~
European countries, with th e remaining two-thirds due to earlier-than-expected in-
creases in the costs of imp orted raw material.
All in all, the price incre ase appears to h~ve entailed, on an annual basis, a high-
er consumer cost of 3.8 trillion lire, althoug:~ this figurewas considered by a large
part of the industrial, pol itical and even governmental forces to be insufficient
for coping with the necessi ty of resupply which, in groundless panic, was at that
time anticipatedll, notwith standing the fact that the unit profit acknowledged for
~ the petroleum sector was, on the average, aournd 11,000 to 12,000 lire per ton (see
Table I4 in the Statistical Sectien) in the months of January and February.
The situation for the international free market in 1980 is radically different from
what it was a year ag~.
- The Rotterdam quotations--e arlier taken improperly as a reference for the "lost
earnings" of the enterprise s that were supposed to have supplied the national mar-
ket12--showed, starting las t December, a steady decline, calculable last August at
about 15 percent for fuel o il and between 20 and 25 percent for gasoline, gas-oil,
kerosene and virgin naphtha. On the other hand, the considerable and continual in-
crease in domestic prices (the level of which is tied to the average of those
charged in the principal Eu ropean countries) starting just at the time when the in- -
ternational prices were get ting past the turning-point (Figure 3) had the result -
that some of them were lowe r than the free international prices, even if, on the
average, th e same cannot be said for the prices charged within the other European
coun tries .
The most ohvious case is th at of dense fuel oil with high sulfur content, which by
itself represents about 36 percent of the total domestic demand for petroleum pro-
ducts.
In the first 7 months of this year, t~ie domestic list prices of fuel oil proved, on
the average, 15-percent high er than the Rotterdam fob quotations, up to peaks of
$40 per ton [as pubLished) at the beginning of the year. Considering the higher
list prices, then, these dif feren*.ials proved to be 35 percent in the first months
of the year and between 20 a nd 25 percent toward the middle of the year.
In the face of such a situa t ion, it is entirely clear that some petroleum enter-
prises and perhaps certain big consumers such as ENEL [National Electric Power
10
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
~
Agency] (though i.t has not bee~l posaible to confirm this) have found it more conven-
ient to import refi ned products than to refine crude themselves or buy refined pro-
ducts directly in the domestic market. Indeed, there has been an increase in impor-
tation--as can be s een fram the related tables i-, the Statistical Section--for al-
most all the princi pal petroleum products, a particularly obvious case being the
imports of fuel oil (+70 percent), which in the first half of the year reached a
level cloae to 30 p ercent of total releasea of this product for consumption.
Compariso n of CIP [Interministerial Price Committee] Prices and
FOB-Rotterdam Prices for Super Gasoline and ATZ Fuel Oil
9EuZ~r~ suvra (1)
~.aw
i
.
_ ~ -
i
I
i
1
1
/
200~000
~ f ~2~
/
iso.ooo ~ a+o coneusnd~e ~TZ�
~ -11 .
~ ~ao.ooo �
,
.
.
Fob. RaWrd m
So.ooo � ~'s:,: c~P ~3 )
M GI 5 D M 4 5 D
a97q -1980
Key:
1. Super [high -octane] gasoline 3. CIP Prices
2. ATZ [Low Su lfur Content] fuel oil
While for refined p roducts in general the increase in importation appears to be jus-
tified by factors o f a situational nature (that is, the relative advantageousness of
the international p rices), in the case of fuel oil there are, in addition to these,
_ others of a structu ral nature, and in particular, the interest of the operators
(just a few of them for now, but that is not likely to be the case in future) in
minimizing refining s of crude and therefore the yield of its quantitatively more im-
portant fraction (fuel oil, precisely) because of the forecast surplus, on the in-
ternational scale, of the supply of cnis product.
This surplus is bro ught about mainly by the market penetration of energy sources
alternative to oil (uranium and coal in particular) that will progressively kake the
11
FOR OFFICIAL USE ONLX
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPR~VED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
place of the fuel oil used in the electric-power plants or in some industrial appli- '
cations. Any eventual imbalances within our country between availability of and
domestic demand for fuel oil will thus be covered by importation. This trend toward
a relative abundance of heavy fractions and relative scarcity of the light and medi-
um ones will, on the other hand, be paralleled by the change in the relative prices
of these products that has been u~der way for a decade at the international level.
The ratio of the prices of gasoline and gas-oil to those of fuel oil has indeed in-
creased from a ratio of about 1.5 at the beginning of the 1960's to a ratio close to -
2.5 in 1979-80 (see Table 4-5 in the Statistical Section).
In any case, recourse to more advantageous importation of refined products has not
brought with it--especially in the first quarter of the year--a corresponding bene-
ficial effect on the level of domestic prices or on the prices/tariffs of other en-
ergy prodvcts derived from petroleum products.
The particular configuration of our petroleum industry--which is certainly not in-
clined toward behavior of a competitive type--and the full freedom of maneuver left
to the enterprises as regards the modes of covering domestic demand have had the re-
sult that, once again, our country has had to pay the costs of the interngtional
market when it was under tension (as in 1979) but without later enjoying the timely
benefits when it came to be in a reversed situation of depression (as in 1980).
Whereas, in fact, the quotations for petroleum products continued in our country to
' increase--albeit with decreasing intensity--throughout 1980, in other countries,
such as Belgium, the FRG, The Netherlands and Great Britain, domestic-price dips,
sometimes of notable magnitude, have begun to occur, from ~he second quarter on.
In the Italian case, it has to be said that the economic benefits for some enter-
- prises and, to a certain extent, to the country's currency accounts, from greater
recourse to importation of refined products do not compensate for the distortions
that such behavior may have caused in the market as a whole, and especially, for the
damage that could in future derive from it against the country's stability and for
the burdensomeness of its oil supplies.
6. The Critical Condition of the National Refining Industry
The technical, economic and commercial deterioration that has progressively charac-
terized our oversized refining industry for more ehan a decade has fina2ly reduced
- it from the strong point of our petroleum system (and strong on the international
scale too) to a factor of burdensome economic inefficiencies and a constant cause of
instability in the domestic market.
- The very strong oscillations that have occixrred in the past in export flows, the dy-
namic of which appears to be directly connected to the variations on the interna-
tional prices (more than to shifts in foreign demand), have in every instance caused
the international tensions to reverberate on domestic prices, through the process of
rarefaction of domestic supply that we described above.
Entirely to the contrary, at a time of depression of international prices--such as =
the one we are presnetly going through--the sharp drop in exports and the preference
given to refined products from foreign sources have caused a very strong contraction
~ of the rates of use of the refining plants, with a consequent disproportionate in-
crease in the unit fixed costs for them, an increase w~ich the enterprises obviously
try to unload onto the domestic prices, especially for the refined products subject -
- to a simple surveillance regime.
12
EOR OFFICIAL USE ONLX
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2047102108: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
In th e first half of 1 980, the Italian refineriea worked at barely 53 percent of
the i r total technical-commercial capacity, as against 63 percent, on the average,
last year.
But the extreme instab ility of the conditions of operation of our refining plants-- ,
far:exceeding the mode st oscillations of domestic demand--has been paralleled, in
rece nt years, by a con tinual strengthening, both technical and commercial, of the _
oth e r refining industr ies in Europe, whose preaence is gradually taking the place of _
the Italian presence i n foreign markets.
- Typ i cal, in this context, is the case of the French industry, which at the beginning
of the 1970's was expo rting barely one-third of the volume o� the Italian exports, .
goin g on to about 80 percent last year, and finally exceeding our exports for the
first time in the first half of the current year.
In the light of the wh ole of these considerations, it seems even more paradoxical
tha t with a refining c apacity more than twice the magnitude of domestic consumption
and still holding thir d place in the world, it is decided to strengthen the position
of o ur direct competitors by increasing their penetration in Italy itself.
The increase in refined-product importation thua constitutes, in our judgment,
grounds ofr serious concern as regards the security of our country's oil aupplies.
In the face of an inte rnational-market situation that appears to offer very little
rea s surance for the future, a shrewd supply policy should have favored the making of
con t racts for purchase of crude--guaranteeing their long-term continuity, within the
lim its of ourpayment possib ilities--rather than tending toward haphazard importation
of p etroleum products. If, indeed, the international situation should, unluckily,
turn critical again, refined-product imports would reach very high levels, and it
would at that time be very difficult to switch over to purchases of crude oil.
In any case, in order to exFress a complete and well-founded judgment in tnis re-
gard, it would be necessary to have all the elements of information about the modal-
iti es for purchase of such products, so as to ascertain what types of crude-oil con-
tract they may have taken the place of.
The impossibility of having such data available prevents us from doing anything more ,
than underlining the risk to which we could incautiously be exposin~ ourselves. In
any case, the observa tion that importation of finished products--notwithstanding the
pri ce advantages they offered--has increased only in Italy, while all other coun-
tr i es have registered reductions, even some sizable ones, confirms our preoccupa-
tions.
Imp ort-Export of Petroleum Products in Several European Countries (1,000's of tons)*
Imports Exports
lst half -1979 lst half-1980 Diff. lst half-1979 lst half-1980 Aiff.
Ita ly 3.9 8.2 +4.3 14.3 6.5 - 7.8
France 5.9 6.2 +0.3 7.7 7.6 - 0.1
FRG 19.4 19.2 ,-0.2 3.6 3.3 - 0.3
The Netherlands 13.7 9.8 -3.9 24.8 18.2 - 6.6
Gr e at Britain 6.7 5.6 -1.1 6.4 7.7 + 1.3
EEC 9 62.4 60.0 -2.4 64.8 51.6 -13.2
* Bunkering is included in exports .
13
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
Exportation of Petroleum Products
1,000's of tons
;o
c~+~.
(1)
io
l
~ :a,,~, (2)
`
i~ ~ � ~
~ ~
~ `
~ , f.., ~
~ f ~'ti
r' ~ F.,~~~ ( 3 )
ao
0
?0 r F1 iJ l0 7e ~c a1 fe ~f p
Key: 1. The Netherlands 2. Italy 3. France
7. An Opportunity Missed
Although the strengthening of the contractual position of purchasers of crude in the
international markets does not betoken an overturning of the previous positions
vis-a-vis the exporting countries, it has nonetheless offered the large consumer
countries the opportunity to adopt measures to consolidate the national security of
their oil and energy supplies. The lines which most countries have taken to pursue
this objective have been essentially two:
(a) making long term crude-oil purchase contracts directly with the governments of
the exporting countries;
(b) increasing the size of the "obligatory" energy reserves held by the enterprises
or managed directly by governmental organiems.
With regard with the di.rect state-to-state agreements, which are fully discussed in
another part of this review, their total magnitude should reach about 8.0 million
abrrels of crude this year as aginst about 6.0 million last year and barely 1 mil-
lion barrels in 1973.
It is interesting to note that this strategy has recen~ly been adopted not only by
countries traditionally committed in th's direction (sUch as France, Spain, Brazil,
1~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
i
FOR OFFICIAL USE ONLY
-
etc) but also, and even with particular intensity, by countries that have heretofore
shunned this type of "interference" in the oil market. Among these, it ia worthwile
to cite the case of Japan in particular, which in a ahort space of time has raised
the proportion of its total crude-oil imports (which exceed 200 million tons per
year) covered by direct state-to-state agreements to 45 percent.l4
Looking at our country, we can see that no results of any importance have been
= achieved as regards either supplies or reserves, and that on the other hand, there
- are no signs of action of any other nature to be perceived either.
The sole positive resu~t obtained in 1980, though quantitatively modest, seems to be
the increase in supplies of oil from Venezuela (up from 3.5 million to 5.0 million
- tons per year)15, within the framework of the only "development agreement" that our
country has so far been capable of concluding with an oil-exporting country.
The satisfaction on account of the firming-up of this agreement is countered, how-
ever, b~~ the concern over the failure to reactivate the supplying of oil by Saudi
Arabia to the ENI--interrupted, as is known, since last December--in the amount of
5.0 million tons per year.l6
The total for the oil-supply agreements in Italy in which there has been state in- -
- tervention, directly or indirectly, can be estimated at around '25 million tons,
equal to about 25 percent of our total net imports of oil and petroleum products. -
Zn France, this proportion still amounted to 40 percent last year, to 55 percent in
Spain, and about 50 percent in Greece.
As regards reserves policy, it has already been seen above that in Italy their size,
instead of increasing, as in most other major consumer countries, has instead exper-
ienced substantial stability at the beginning-of-the-year levels and a reduction
from the beginning of 1979.
In order to evaluate the full import of the ~reater vulnerability in which our coun- -
try finds itself as compared with the rest of Europe, we must also take account, in
the first place, of the fact that the proportion of oil in national energy consump-
tion is about 68 percent in Italy as against the 50 percent of the other European
countries; and in the second place, of the fact that domestic production of energy
sources in Italy does not amount to even 17 percent of consumption, as against 49
percent in the rest of the European countries; and finally, of the fact that in
other countries, the greater relative size of oil reserves is accompanied by re-
serves of other energy sources (among which coal is of special importance) that are
practically nonexistent in Italy.
The problem of the absolute insufficiency of energy reserves in Italy appeared to be
among the Italian government's concerns when, at the end of last year, it proposed
draft bill No 655, which provided for an increase of the level of petroleum reserves
to 25 days' consumption of crude and 90 days' consumption of petroleum products
(calc:ulated, in both cases, on the basis of the preceding year); the setting-up,
with the ENI, of a"strategic oil res~rve" for coping with particular emergency sit-
uations; and finally, ;qn initial financial appropriation of 300 billion lire for
achieving these objectives. Our Parliament's troublous vicissitudes have not yet
permitted any significant advance in the legislative pFOCedural journey of this
draft bill, which contained useful innovations in the matter of reserves, even if
15
FOR OFFICIAL USE ONLy
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
1
the passage of time has by now made the financial appropriations earmarked for that
purpose entirely insufficient.
8~ What Price Policy?
While little or nothing new has been done in the matter of oil supplies and re-
serves, the uncertainty remains regarding the other element that more directly con-
ditions the security of oil availability in the long term--that is, price policy.
Even though the scope of operational discretion permitted to the enterprises in the
matter of prices has been considerably broadened with the introduction of the "new
_ criteria for determination of the maximum prices of petroleum prices,"17 the contra-
diction that permeates all national oil policy remains unresolved: the contradiction
between "price control and freedom of quantity."
The absence of any restriction regarding tne corn,mitments, now only theoretically
made by the petroleum enterprises,a[ the time of the preparation for the Annual Sup- _
ply Plan, has had the result of "unloading" onto price policy alone the responsibil-
ity for ensuring continuity of supplies.
The restrictions set on the average level of the industrial prices (which could not,
on the basis of the preceding method, exceed the full costs of importation and pro-
_ cessing, and, on the basis of the new method, could not exceed the average ex-refin-
ery proceeds of the other European countries) can only cause--even if to an extent
certainly lower than in the past--diversions of domestic supply abroad if the inter-
national prices should start rising again.
In itself, then, the most realistic price policy initiated in Italy cannot be con-
sidered capable of solving the problems of supply if it is not paralleled by an ef-
fective policy on the quantity side.
For the purpos~es of the enterprises' deciaion to allocate available stocks to a spe- -
cific market or not, even more than for the purpoaes of the price-setting criteria �
applied to them, the factor of certainty about their modalities and continuity of
application, once they have been adopted in one direction or another, appears to
have priority of importance.
Nothing, that is to say, can cause the enterprises more trouble, in the matter of
prices, than the uncertainty and the wide scope of policy discretion heretofore ex-
perimented with in the Italian petroleum sector. The step forward taken with the
new CIP Method--the CIP having introduced a serious of sutomatic mechaniams for var-
iation of prices in function of the shifts taken by the reference variables--has not
seemed entirely satisfactory in the first months of its application.
Sometimes, indeed, the old tradition of preferring a discretionary "contraction" be-
tween the parties as regards modes and times of price variation to adherence to the
"objective" criteria adopted in the method has seemed to prevail still, even if the
phase of experimentation in which the Method presently finds itself could in theory
justify a viscous quality in ita mod$lities of application. -
Equal uncertainties also remain regarding the price-se~ting system considered most _
functional for our oil market, in view of the fact tha~ the system preaently in
16
FOR OFFICIAL USE ONLX
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
- force, in the opinion of a large aegment of the governmet~~al autllorities and in the
hope of the enterprises, should be understood as an intermediate phase of a process
--already started--of gradual liberalization of prices, while on the contrary, in
the Resolution of the 12th Industry Committee of the Chambe: of Deputies (of
12 rtarch 1980), "the government commits itself to not taking up the problem (of sur-
veillance--Editor's Note) before an organic reform of the CIP and implementation of
the instruments necessary for full control of the oil market."
Even at the beginning of July, in the Parliamentary debate held on energy policy,
the Industry department official manifested his own open preference for a solution
of this type, with the full support of the private entrepreneurs in the sector, and
to a certainly excessive extent, with the support of the state agency.
The confimied intention to "proceed to transferring gas-~il from an administered
price to a monitored price" implies, in fact, the intention--voluntary or not--to
simply eliminate aIl control over petr~leum prices.
This is for two substantial reasons:
(a) the first lies in the impossibility of actually carrying out the monitoring of a
product such as gas-oil that is distributed by thousands of operators, in view of
the disintegrating situation of the peripheral atate administrative structures who
would have to be asked to conduct the monitoring;
(b) the second reason lies in the impoasibility--even in the hypothetical case of
gas-oil monitoring being successful--of "compensating" by means of gasoline alone
(12 percent of consumption)--the only product up to that point subject to an admin-
istered-price regime--for the upward or downward shifts of the variables to which
the average gross receipts of the operators would also have to be tied.
The proposal to extend the monitoring system, as it is usually presented, to gas-oil
presents such contradictions--between the objectives postulated and the means by
which it would be desired to achieve them--as to signi�y in fact, in our judgment, a
"surreptitious liberalization" of prices, and without any beneficial result for the
size and regularity of oil supplies necessarily following from such a decision. ,
An incautious startup of monitoring of gas-oil prices would therefore present the
risk of the same unhappy experimental period recently experienced with two other
basic products, bread and meat, recently returned to an administered-price regime
after a 1-year experiment with a monitoring system.
The system was not really put into practice, ana it meant such an increase in the
- consumer prices of both bread and meat that just in the first half of the current
year it produced a jump of a good 7-8 points in the cost-of-living index--these two
products, like gas-oil, being in c luded in the basket of goods on which the cost-of-
living index is calculated.
July 19$0
FOOTNOTES
1. The General Directorate of Energy Sources o� the I~inistry of Industry prepares
~ monthly, on the basis of the analytical data furnished by the entPrprises, a
crude-oil and re�ined-products balance sheet for a 5-month peziod, running �rom
17
TOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPR~VED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE OIJLY
the "definitive consumption" of the last month available to ~the "provisional
forecast" of the 5th month to come. Theae data, in any case, are "solely for
internal use within the Administration."
2. EEC regulations 3254/74 and 388/75, relative to the collection of data on impor-
tation and exportation of petroleum products, apply, for example, solely to
those companies that move at least 100,000 tons of product per year.
3. EEC, NOTE on suspension of certain information to the Commission, 6 June 1980. -
4. The data available group the residential-consumption data with the commercial-
conaumption data, but this does not alter the result obtained for the former.
5. Data as of 20 March 1980 (the time when the winter season normally ends) as com- -
pared with 1 January 1979.
6. We went from figures higher than 13,000 km per year in 1973 to a little more _
than 9,600 km per year in 1979 (-28 percent).
7. The incidence of the cost of fuel--calculated on the basis of a FIAT 128~with
mileage of 20,000 km per year--on total operating cost came to 36 percent in
1979 as against 44 percent in 1975. Data taken from "Esso Data 1979."
EEC, "Recent Information on Oil Supply" (provisional), 15 July 1980.
9. Because of the delays in ISTAT publication of data, we have had to make use of
the data released by the EEC, which, however, do not always coincide with the
ISTAT rlata because of differences both in the collection criteria (the ISTAT
data also include bunkering, which is not considered by the EEC) an.d in collec-
tion times (which are perhaps closer to reality in the case of the EEC).
10. The structure of supplies is given by the sum total of domestic productian of
crude, plus net imports of crude after deducting reexport of petroleum pro-
ducts, plus imports of petroleum products. The variations in primary reserves
are not considered for each y~ar.
11. It should perhaps be recalled that the increases decided on by the Council of
Ministers on 29 December 1979 were granted in. an atmosphere that it would not be
exaggerating to describe as one of panic about the co~intry's imminent oil-supply
"shortfall," estimated by some ministries at 20 million tons for all of 1980 and
by others at 3~-35 million tons. To cover this "shortfall," it was planned to
make massive use of the more e.xpenaive spot market, thus transferring to the
domestic prices raw-material costs far higher than those normally paid. There
was agreement on this position even between the industrial associations and the
trade-union associations, which, in the face of the feared risk of a sizable re--
duction in the number of jobs and production from the beginning of the year be-
cause of a 25-percent shortage of oil supplies, signed a aoint energy-policy
document sent to the government on 28 December 1979. For the reporting of those
days, see: IL SOLE-24 ORE of 15 November 1979, "Better Expensive Than Nothing" -
and "Threat of a Shortfall in the Petroleum Balance-Sheet"; IL CORRIERE DELLA
SERA of 17 November 1979, "The Oil Shortfall Could Cost 2 Trillion Lire"; and
the year-end issue of IL SOLE-24 ORE.
18
FOR OFFICIAL USE ONL~!
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY -
12. Improperly because the fob-Rotterdam and fob-Genoa prices are indicative or
trend prices and almost never reflect the real selling prices that transpire, as
is demonstrated by the importation prices of Aotterdam's biggest buyer--that is,
the FRG--which are considerably lower than the quotations reported by Platt's. _
- 13. This has to be done in any case by enterprises or big consumers that haQe suffi-
cient capacity for storage of imported stocks.
14. PETROLEUM INTELLIGENCE WEEKLY, 9 June 1980.
15. There are no official communications to which one can refer with regard to this
extension of the agreement with Veneauela; therefore we used the press reports. _
16. The suspension of supplies from Saudi Arabia, in view of their lower cost as
compared with the average for the crude imported into Italy, has so far cost at
least 50 billion lire, calculating this cost on the basis of the differential
between Saudi Arabian crude's CIF ~oet and the average of the CIF import costs
in the first half of the current year.
17. CIP Provision No 8/1980 - GAZZETTA UFFICIALE No 79 of 20 March 1980.
11267
- CSO: 3104
19
FOR OFFICIAL USE ONLy
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPR~VED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
~ FOR OFFICiAL USE ONLY
COUNTRY SECTION FRANCE ~
BRIEFS
PCF SPECIAL ASSESSMENT--The rich will pay. Based on that principle, [Georges]
Gosnat, PCF treasurer, has decided to asaess all the well-to-do members of the
PCF. This special tax will come to 1,000 francs. The number of "rich" msmbers _
is 20,000. The money collected will come to 20 million francs, and woe unto
those who are reluctant to pay up. [Text] [Paris LA LETTRE DE L'EXPANSION in
French 2 Feb 81 p 3]
QADFIDHAFI ON TV--[Libya'sJ Qadhdhafi is doing all he can to appear as a friend -
of France. His minister of information has been made responsible for seeing
Qadhdhafi is invited to appear on several big radio and TV broadcasts (Cartes
sur table [Cards on the Table], Face au public [Face the Public], Le Club de
la presse d'Europe 1[Europe 1 Preas Club] and so on). [Text] [Paris LA LETTEZE
DE L'EXPANSION in French 26 Jan 81 p 6]
CSO: 3100
20
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPR~VED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
FOR OFFICIAL USE ONLY
COUNTRY SECTION SPAIN
POLITICAL BIOGRAPHIC PROFILES OF HIGH-RANKING UCD LEADERS
Mad rid LA OTRA HISTORIA DE UCD in Spanish 1980 signed to press 2 Dec 80 pp 222, 223,
247 , 248, 270, 271
[Excerpts from chapter entitled "Quien Es Quien en el Congreso" of Part IV ("Rebelion
en las Camaras") from the book "ia Otra Historia de UCD"by Fernando Jauregui and
Manuel Soriano, Emiliano Escolar Editor, Juan de Mena, 19-21, Madrid-14, 308 pages]
[Excerpts] i,eopoldo CALVO-SOTELO Bustelo
Dep uty representing Madrid; entrepreneurial technocrat; second vice president of the
government for economic affairs; member of the UCD [Democratic Center Union] National
Executive Committee; promoter of the centrist party.
A native of Madrid, aged 54, he is married and has eight children. He is an engineer
specializing in roads, canals and ports, and has engaged in professional activity in
both public and private enterprise: r_hairman of the RENFE [Spanish National Railroads]
Council of Administration; general director of Perlofil, SA; executive adviser of
La Seda de Barcelona, SA; board member of SA Ferrovial; adviser to the Urquijo Bank;
and adviser to the Rio Tinto Explosives Union. He has assets amounting to nearly
38 million pesetas, and an annual income of over 5 million, according to his latest
f inancial statement.
During the dictatorship, he had technical responsibilities in the economic growth
period, participating for some time on the staffs of Federico Silva Munoz. He was
chairman of the Basic Chemical Industries Subcommittee of the Second Development
Plan; directed the task force on industrial location in the Third Development Plan;
and, in 1972, headed the Association for Industrial Development of Galicia (SODIGA).
In 1975, he was a vo~.ing member in the Plenum of the Higher Council of Chambers of
Commerce, Industry and Navigation.
His political concerns began in 1942, when he joined the Monarchist Youth organiza-
tion, headed by Joaquin Satrustegui. His Catholic background also prompted him to
~oin the youth group of the National Catholic Association of Propagandists (ACNP).
In 1957, he was a founder of the Spanish Union, which made an abortive attempt to
participate in politics as a group. From October 1971 until December 1975, he was _
a member of Parliament, representing owners of chemical industries.
In 1975, with the political personages favoring openness at the time (Fraga, Areilza,
Pio Cabanillas and Jose Luis Alvarez), he founded FEDISA [Federation of Independent
21
FOR OFFICIAL USE ONLk
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6
~ F'OR OFFICIAL USE ONLY
Studies, Inc.], for the purpose of setting up a conservative party which wou?d guide
the progress from the dictatorship to a democratic monarchy. A few days after
Franco's death, President Arias Navarro appointed him minister of co~erce. Suarez, -
Fraga and Areilza also joined this government, the latter two as genuine "protagon-
ists" of reformism.
Calvo-Sotelo is one of the reformist politicians who did not refuse to cooperate
- with Suarez when the latter was named president of the government by the king in
July 1976. He joined Suarez' first cabinet as public works minister. At the order
of Suarez, he left the ministry post to handle the formation of UCD, to assert the
president's interests in the coalition and to lead the centrist campaign during
the first democratic elections, which brought victory to Suarez. He was a deputy
representing Madrid in the constituent legislature, and spokesman-chairman of the
centrist parliamentary group in the Congress until February 1978, when he was
appointed minister for relations with the European Communities, a position that he
left in September 1980, to replace Fernando Abril Martorell as second vice president
for economic affairs.
Landelino LAVILLA Alsina -
Deputy representing Jaen; a Christian Democrat; member of the UCD Executive Committee
and of its Standing Commission; president of the Congress of Deputies.
A native of Lerida, aged 46, he is married and has four children. Holder of a law
degree and a certificate from the Leo XIII Social Institute, he served as a professor
of administrative law at the University of Alcala de Henares, and as a counselor for
the Council of State and counselor auditor for the Controller of Currency (number
J one of both oppositions).
During the Franco era, he monitored political events very closely from the important
positions that he held in public and private enterprise, as well as in circ:les with
Christian Democratic influence associated with the National Catholic Association of
Propagandists, the heir of the group formed around Cardinal Herrera Oria that gave
rise to the Catholic-national component of the dictatorship. The influence of
Vatican Council II and the perspective of the monarchy caused this major pressure _
group to move toward reformism.
From this new perspectives Lavilla was a leader of ACNP, president of the San Pablo-
~EU Major College and founder of the "Tacito" * group, whose doctrine was published
in the newspaper YA, and in four regional newspapers, and disseminated to the sub-
scribers of the "Logos" agency, all affiliates of Editorial Catolica, SA, in which
he served as chairman of the Council of Administration. His other economic sources
and privileged political monitoring posts were: CAMPSA [Leasing Company of the
Petroleum Monopoly], on the Council of Administration; UNINSA as
adviser; Acerinox, SA, as adviser; and the Spanish Bank of Credit, as assistant
general director.
*A group composed of lawyers and middle-class bureaucrats who occasionally voice
their opinions; there are Social Democrats, Christian pemocrats or liberals in
this group.
22
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-00850R000300084440-6
FOR OFFICIAL USE ONLY
After he had collaborated in the Technical General Secretariat of the Presidency of -
the Government, occupied by Carrero, he held his only political post during the
previous reg ime at its end: as undersecretary of industry, in the government of
Carlas Arias Navarro (1974). While serving as president of Editorial Catolica, in
1976 he was called upon by Suarez to take over the Ministry of Justice, and became
the juridic al alchemist of the president's political desires aimed at dismantling
Francoism and laying the foundations for demncracy. From the legalization of the
parties and trade unions, and including an attempt to guarantee liberties, to the
provisional "mini-Constitution" which was the Law for Political Reform, and the
electoral d ecree-law which opened the horizon for the new, de facto constituent
Cortes, Lavilla made complete laws.
Devoted to this immense task, he did not appear for the 1977 elections, but was a
senator at the king's appointment. He took over the leadership for preparing the
Constitution, defending the centrist positions so vigorously that the Socialist,
Peces-Barba, gave up the chairmanship and charged that the privileges of private
education were being constitutionalized. During the Commission phase, the draft
Constitution came out ahead only with the backing of UCD and Fraga's Popular Alliance,
because all the proposals from the left and from nationalists were rejected. The
educational issue, that of divorce and the regulations for representation in the
- Cortes, brou ght up very advantageously for UCD, stalled the debates again, and the
opposition threatened to leave. It was then that the political vice president, .
Abril rfarto rell, removed Lavilla from the leadership for preparing the Constitution,
and made an agreement on it with the opposition.
Learning from the experience of this skirmish, and not emerging as a man for "hand
to hand" po litical battle, after having been elected a deputy in 1979 he opted for
another priv ileged political monitoring post, the presidency of the Congress of
Deputies, a niche affording protection from the partisan blows, to which the govern-
ment and the opposition must have recourse to obtain its mediation. A.f.ter the bind
in which Sua rez had placed him, having to deny the opposition the prior debate that
it was reque sting in the investiture of the president, Lavilla soon gained the recog-
ni~ion of the entire Chamber as an unbiased, exacting president, orderly in the -
debates and unappealable in the fair interpretation of rules and regulations. During
recent months, the thorn of preparing the Constitution has been removed, freeing -
parliamentary issues, and allowing the opposition's proposals to be heeded.
Agustin RODRIGUEZ Sahagun
Deputy representing Vizcaya; a Suarez follower; a relative of the president by mar-
riage; memb ex of the UCD's National Executive Committee; minister of defense.
- He was born in Av ila, is 48 years of age, and is married with six children. A
brother of his is married to a sister of Aurelio Delgado, Suarez' brother-in-law
and private secretary. His main professional activity has been that of an entre-
preneur, or ganizing the Spanish employers association in the CEOE [Spanish Confede-
ration of Business Organizations] and the CEPYME [Spanish Conf ederation of Small
and Medium- Sized Businesses], in which he served as vice president and president,
respectively. He is one of the wealthiest men in UCD, according to the latest
financial s tatement, which recorded assets amounting to over 152 million, and an
annual income of 5 million pesetas.
23
- FpR OFFICT.AL USE ONLY =
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6

APPROVED FOR RELEASE: 2007102/48: CIA-RDP82-00850R000300084440-6
I
FOR OFFICIAL USE ONLY
He has an extensive academic record : a degree ln economic sciences from the Univer-
sity of Deusto, and in law from the University of Valladolid; a certificate in
politics and economics from the University of Caen (France); a certificate in
business management and organization from an institute in Milan; a fellowship from
- the Turin Institute of Economic Studies; and courses in computer science at the IBM
main office in Blaricum (the Netherlands) . He is a founder of, and has been an
instructor at the International Institute of Business Management (INSIDE).
His record as a businessman is even more extensive: founder and member of the Coun-
cil of Administration of Ediciones Deusto, SA; general secretary of promotion for
the Bank of Bilbao; board mem5er of Laurak, SA; of the Latin American Petroleum
Company, SA~ in Caracas, where~ he set up his own business; of Procex Internacional
(Luxembourg); of Lemon, SA; Of Iberfrio; of Ibero-Europea de Ediciones, SA, etc.
He has been a promoter of institutions for the protection of the interests of
business owners (who were. disorganized under the state's protection during the
dictatorship), for the purpose of opposing the trade unions in the new democratic
sysrem. He participated in the establishment of the Spanish Confederation of _
Business Organizations (CEOE) and the SFanish Confederation of Small and Medium-
- Sized Businesses (CEPYME) .
While serving in the presidency of the latter organization, he distinguished himself
by harshly criticizing the economic policy directed by Prof Fuentes Quintana, marked _
by a social tendency, in the government resulting from the 1977 elections. When
Fuentes resigned and Abril Martorell took over the economic vice presidency, Rodri-
guez Sahagun was named minister of industry and energy in 1978. He did not come
from any of the groups and parties which comrpised UCD, and had only maintained a
certain relationship with the Popular Party. He became affiliated with UCD shortly ~
af ter entering the government .
After the last general and municipal elections, in April 1979, Rodriguez Sahagun
' became the first civilian defense minister, after the government defense responsibi-
lities had been ir_ =he hands of the military for over 40 years. With great circum-
spection he undertook the restructuring of the Armed Forces, the combining of its
upper echelons and the reform of the military justice system. He has had to cope
with serious tension on the part of the generals, caused by the heavy terrorist
attacks, which also upset the Army's high-ranking authorities.
During the cabinet crisis of September 1980, he was willing to accept the vice-
, presidency for economic affa~rs, with a program for the reactivation of busines~, _
but Suarez chose Calvo-Sotelo and the Fuentes Quintana team, again in the shadows.
He is in the habit of remarking that, when the president does not need his services,
he will engage in establishing a great newspaper in Madrid, with the conviction that
the press is business.
_ COPYRIGHT : 1980, Emiliano Escolar Editor
2909
CSO: 3110 END
24
FpR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080040-6