STAFF NOTES: WESTERN EUROPE CANADA INTERNATIONAL ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000400130038-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 21, 2016
• Document Release Date: February 7, 2008
• Sequence Number: 38
• Publication Date: May 16, 1975
• Content Type: REPORT

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Secret
9UIFF ROUEN
Western Europe
Canada
International Organizations
State Dept. review
completed
Secret
No. 0192-75
May 16, 1975
122
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WESTERN EUROPE -- CANADA - INTERNATIONAL ORGANIZATIONS
This publication Is prepared for regional spocialists in the Washington com-
munity by the Western Europe Division, Office of Current Intelligence, with
occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
CONTENTS
Portuguese Moderates Dealt Setback . . . . . . 1
British Union Leaders Not in Favor of
Tightening Wage Guidelines . . . . . . . . . 9
West Berlin Morale Shakon . . . . . . . . . 5
Quebec Labor Unrest Threatens 1976
Olympics . . . . . . . . . . . . . . . . . . 7
Soviets Weigh In on Finnish Political
Situation . . . . . . . . . . . . . . . . . 8
Spain Acts To Ease Labor Unrest . . . . . . . 9
"Leap Forward" for EC Commercial Policy? . . . 11
Turkish Coalition Government Off to
Good Start . . . . . . . . . . . . . . . . . 13
ANNEX
Jockeying for Position Over the Spanish
Sahara . . . .. . . . . . . . n . . . . . . 16
May 16, 1975
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Portuguese Moderates Dealt Setback
Moderates in the Armed Forces Movement
have' suffered a setback with the forced resig-
nation yesterday of General Mendel Dias, the
air force chief of staff and member of the
Revolutionary Council.
Mendes Dias' resignation comes as no sit:-
prise since his moderate views made him suspect,
especially after the abortive March 11 coup,
Moderate officers in the Mov.jment had hoped
that the popular strength demonstrated by
Socialists and the Popular Democrats in thfa?
constituent assembly election would give them
increased leverage in the Council. So far,
however, they have had little succe = in making
their influence felt.
in a communique released by the Revolution-
ary Council, Mendes-Dias was criticized for "de-
ficiencies" in command during the coup attempt,
but he was not accused of complicity in the
plot. The Council st. ted that his loyalty to
the Movement is not in question.
According to Captain Vasco Louren(o, a
member of the Revolutionary Council a Mi,i,ndes
Dias will leave the chief of staff p?,6,,; 0tion,
but will retain other functions "also?;P1,ated
with the revolutionary proi.ess. " Pra :,uu reports
speculate that the Council's rebuke w,:is inten-
tionally mild to avoid antagonizing to air
force, which id inclined to support the moder-
ates.
The Portuguoroo media indicate that the
commander of the Lisbon air region, General
May 16, 1975
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Pinho Freire, also submitted his resignation
out of loyalty, but the Council's decision on
this matter has not been announced.
The now chief of staff is Colonel Morais
da Silva, until recently a major who assumed
command of an air base in the aftosinath of the
abortive coup. As chief of staff, he is pro-
moted to the rank of general.
Morais da Silva is reported to be the
choice of a loss moderate faction in the air
force which is displeased with Mondos Dias'
professional atti tud .
Minister of Industry Cravinho reportedly
has warned that the account of the March 11
coup, publish-wd shortly before the April 25
election, represented a hidden threat and that
accusations of misconduct on March 11 would
probably be used again. The resignation of the
top air force staff will food continuing rumors
that further changes may be made to purge the
Revolutionary Council of officers suspected to
hold moderate views,
Cravinho maintains that it is impossible
to determine which indiv:.dualn or faction,,
actually wield power in the Council. According
to Cravinho, votes in the Council are frequently
21 to 3, with the 3 characterized an "committed
Conimunints." The 21, however, cannot be charac-
terized an comprising a faction since it includes
ir.dividu,~la who are not committed to a particular
policy option or alliance. Cravinho believes
that the battler for power will continua
several more months, F
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May 16, 1975
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OLVttir J.
British Union Loaders Not in Favor of
Tom. tan ng, Wage Guidelines
The economic committee of the Trades Union
Congress this week decided simply to encourage
unions to adhere more firmly to the rduide'.inac
of the social contract, rejecting proposals to
strengthen the arrangement with the government.
TUC leaders, however, will continue to remind
unions of tneir contract obligations anJ their
pledge not to sc.k more than one pay raise per
yeLir.
The committee is concerned that all union
negotiators may presu for wage rises of 30 per-
cent b?cause of such pay p&ckages already re-
ceived by the miners, civil servants, London
dockers, and power workers. The minors began
the current spate of excessive wage demands last
February when they werr. granted an increase of
up to 35 percent. Now the miners have announced
they intend to go back to the Coal Board to ask
for a threshold arrangement to compensate for
cost-of-living rises since February. The minors
had pressed for such a clause during their nego-
tiations, but were turned down on the grounds
that the social contract prohibits pay deals
that look forward as well as back at price move-
mente.
TUC leaders are planning to meet Chancellor
of the Exchequer Healey to complain that recent
gcvornmont measures, particularly the budget,
show that the government in not fulfilling its
side of the social contract. The unions are
perturbed that Healey continues to warn the
unions about their excessive wage demands and
that his recent budget proposes income tax in-
creases of six percent.
May 16, 1975
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Throughout the summer, the TUC will review
the wage guidelines and consider possible options
for developing the social contract. Despite
these good intentions, TUC leader Murray commented
that he did not believe that the annual meeting
in September would change the guidelines in any
major way. This attitude may give the government
little choice but to propose statutory wage con-
trols, a measure certain to lead to confrontation
between the unions and the government.
May 16, 1975
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West Berlin Morale'Shaken
Decisions announced this week by two large
US firms to cut their operations in West Berlin
have caused concern there that US commercial
interests may be losing faith in the future
of West Berlin.
The basis for the current concern were reports
appearing in West Berlin newspapers on May 13 and
May 15 that National Cash Register (NCR) and
Pitney Bowes--both hard hit by the recent business
downturn--planned to cut Berlin operations in favor
of centralized operations from their plants in West
Germany. The moves will idle nearly 1,000 workers
in West Berlin.
Officials of both firms have denied that political
factors motivated their decisions, but early reactions
in West Berlin indicate that neither political nor trace
union leaders are convinced. While West Berlin polit-
ical leaders have'taken a public position"that the
decisions reflect a decline of the US commitment to
Berlin, some h-:ve told US Mission officials privately
that they doubt the decisions were based wholly on
economic grounds. Trade union leaders have been even
more outspoken. A spokesman for the large Metal
Workers' Union (IG Metall) claimed earlier this week
that the real reason for the NCR move to its Augsburg,
West Germany, plant was the firm's lack of faith in
the US commitment to Berlin based on recent US per-
formance in SE Asia.
Although fears of diminishing US involvement
abroad may not gain general acceptance, the close
timing of the two announcements has encouraged a
political interpretation in West Berlin, where
May 16, 1975
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basic insecurity is always a major factor. The
US Mission will urge US businessmen in West
Berlin to coordinate their plans closely with
Berlin authorities to help forestall misinterpre-
tations'Othis kind in the future. Some 100 other
US firms are still operating in West Berlin, though
few are as important in'`terms of em ent as NCR
and Pitney Bowes. F 7
May 16, 1975
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Quebec Labor Unrest Threatens 1976 Olympics
Quebec's mounting labor unrest has resulted
in severe rioting, a walkout of Montreal con-
struction workers, and a threat of a one-day
general strike next week. Thc, unions are count-
ing on the Quebec government's desire to complete
the facilities for the Olympic games by the sum-
mer of 1976 to force it to modify proposed re-
strictive labor legislation.
Revelations by a special provincial commis-
sion studying corruption and racketeering in the
Quebec labor movement led to the introduction
of two corrective bills in the Quebec National
Assembly. One would impose government trustee-
ship over the allegedly corrupt construction
unions affiliated with the Quebec Federation of
Labor and the other would bar persons with
serious criminal records from holding senior
union positions.
The union leadership requested a 90-day
moratorium on the legislation to allow time to
deal with the corruption problem itself. Pre-
mier Bourassa's government has thus far refused
to budge on the issue. The Premier said in a
recent radio interview that he is ready to
sacrifice the Olympics if necessary to preserve
social order.
Wildcat strikes by the construction workers
have stopped all work at the Olympic site, where
work already was far behind schedule. The se-
vere rioting on may 12 at the long strike-bound
American owned Pratt-Whitney aircraft engine
plant in suburban Montreal has added more fuel
to the fire and taken on anti-American overtones.
May 16, 1975
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oi,L.t? .r
Soviets Weigh In on Finnish Political Situation
Finnish President Kekkonen will announce
next Monday his plans for resolving the current
domestic political impasse. In a statement
on May 15, he assured foreign governments
that domestic political uncertainties would
not impede Finland's hosting the third stage
of the Conference on European Security.
The break up of the present coalition,
deeply divided over a host of issues, has
appeared imminent in recent weeks. During
his visit to the USSR last week, however,
Foreign Minister Karjalainen was warned by
President Podgorny that Finnish political
instability could give opponents of European
security an excuse to postpone the third con-
ference stage planned for this summer.
Prior to the Soviet warning, Finnish
leaders assumed that once the coalition resigned
an interim non-political government would
preside until elections in late summer or
early fall. Now, however, some Finns are
talking of retaining the coalition on a care-
taker basis and putting off an election until
next spring.
May 16, 1975
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the word strike in the decree--a word Franco has
not previously permitted--the new decree is unlikely
to satisfy critics of the Spanish system at home
Spain Acts To Ease Labor Unrest
The Spanish government has made two moves
to ease labor tension, but,its actions may be
a case of too little too late.
The labor minister announced last week
that the cabinet had approved a long-awaited
decree that makes strikes legal for the first
time under the Franco regime. The new law
provides for'.legal strikes only as a last re-
sort after various prescribed mediation and con-
ciliation steps have been taken. A strike will
be considered legal if it deals with a dispute not
covered in government-approved labor management
contracts and follows a secret ballot in which a
minimum of 60 percent of the workers affected
have voted to strike. Written advance notice
of five working days following a favorable vote
must be given to the government. During that
time, the government will try to settle the dispute.
The following strikes would not be permitted:
all nolitically motivated strikes, all solidarity
strikes by workers or, others not involved in the
specific labor disputes, all. strikes involving
worker sit-ins, strikes at any public services
or installations related to national defense, and
any wildcat strikes not following prescribed pro-
cedures.
Given these restrictions, there may be few
legal strikes in Spain. The new law is thus only
a small victory for those wanting to liberalize
the government-controlled labor system. Although
it was a concession for the government even to use'
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In an additional cX-iort to ease tensions,
the govern-m? nt-cont,ailed Syndical Organization
finally announce:.: i:z' t elections for shop stewards
will be held in Junc. Most clandestine labor
organizationZ, from the Communist-dominated Workers'
Commissions to the moderate Crtholic-oriented
Spanish Workers Union=-but not the Socialist General
Workers Union which refuses to participate--plan
to run candidate in a move to penetrate the offidial
labor organization at the plant level. This activity
.may substanti&ly diminish the recent strike activity
as workers concentrate their attention on the
May 16, 1975
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"Leap Foiward" for EC Commercial Policy?
Immediately upon his return to Brussels
after a one week trip to Peking and Tehran,
Sir Christopher Soames, EC Commissioner for
foreign relations, announced his intention
to seek "economic cooperation agreements"
with China, Iran, and, eventually, with the
Eastern European states.
The economic cooperation agreement the
EC is now negotiating with Canada would
serve as a model for these agreements. The
non-preferential agreement will include
provisions for cooperation in the industrial
and environmental areas and set up formal
consultation procedures. The EC views the
Canadian agreement primarily as a means of
guaranteeing European access to raw materials
in exchange for EC technology.
Soames hopes that once the Canadian
arrangement is concluded, the competency of
the commission to negotiate such broad agree-
ments will be established. The commission
will then seek authority to negotiate similar
arrangements between the EC and state-trading
countries. How much success Soames will have
is uncertain. 'The EC members have up till
now refused to enlarge the jurisdicion of
the community's common commercial policy to
include cooperation agreements.
During his stopover in Tehran, Soames
pressed the Iranians to accept a non-prefer-
ential cooperation agreement similar to that
being negotiated with the Canadians. Tehran,
however, prefers special trade preferences
May 16, 1975
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along the linen of the tC-Mediterranean
aczordn. Agreement wan, nevertheless, reached
to begin exploratory talks in Juno on a now
agreement which will include provinionn for
oil and refined products.
At a Brussels nows conference, 1onmes ox-
pronned the hope that his China visit would
not retard pro roan toward improved relations
with the Council for Economic Mutual Assint-
ance and individual Eastern European countrien.
The Commission surely figures, in fact, that
the talks with China will spur Eastern Ruro-
pean interest in their own arrangements with
the EC.
The initial Romanian reaction appears to
be favorable. Romanian officials want to
ontabli,* closer ties with the cotr nunity, but
do not -want to risk being the first com.unint
country (except for Yugoslavia) to enter into
a trade agreement with the EC or accord it
lull political recognition. The Chinese deci-
nion to blaze the trail may increase the ponal-
bility that Romania may follow suit. Bucharest,
however, would not want to follow Peking's lead
too closely because of Mon cow's negative re-
action.
Under the EC's ootm-,on cor. ercial policy,
state trading countries must recognize the
Commission's authority to negotiate trade
aareamenta. uomaian acn-non i o of f i_ia la m---
hope that by recognizing the CC they will gain,
among other things, more favorable treatment
in negotiations on an EC-poaanian textile
agreement and greater access to CC rarketn for
Romanian cotton goods.
May 16, 1975
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