STATUS OF DRAFT NIE 12.5-86: HUNGARY: THE WANING OF THE KADAR ERA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87R00529R000100050032-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: May 13, 2011
• Sequence Number: 32
• Publication Date: March 5, 1986
• Content Type: MEMO

Sanitized Copy Approved for Release 2011/05/18: CIA-RDP87R00529R000100050032-4
The Director of Central Intelligence
Washington, D.C. 20505
NIC No. 00832-86/4
National Intelligence Council 5 March 1986
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
FROM: George Kolt
National Intelligence Officer for Europe
SUBJECT: Status of Draft NIE 12.5-86: Hungary: The Waning of the
Kadar Era
1. The attached draft NIE on Hungary is the result of a
collaborative effort. The initial draft was produced by Frank Foldvary,
State/INR, who did a very good job in comin u with little known
information and putting it together. of the NIC/AG then did
her usual masterful job of boiling down a data to its essentials,
sharpening the judgments, and producing the current draft.
2. We are glad that the SRP found the draft an excellent paper. In
the attached draft, we have taken the SRP's suggestions into account as
follows:
On military considerations, we make clear that Hungary is a
cooperative member of the Warsaw Pact in all ways but
defense spending and have expanded somewhat our treatment
of the spending issue (Para 31, last tic).
On the Hun arian-USSR economic relationship, we agree this
is a very important issue. As an initial step, we have
added Paras 29 and 30 to deal with it. But since this
issue affects the whole of Eastern Europe, we are also
working with the NIO/Economics to start an NIE that will
treat the problem in its broader dimensions.
On overoptimism, we agree that the Key Judgments as
originally written created that appearance. But we believe
that this was due mainly to an overly abbreviated
presentation. We have therefore revised the last two
paragraph of the Key Judgments to bring them into line with
the text, as suggested by the SRP.
CL BY SIGNER
DECL OADR
DERV MULTIPLE
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On debt, we are trying to get the information suggested.
On terrorism, I certainly agree with the SRP's implicit
suggestion that the Hungarians should be taken to task for
whatever support they provide to terrorists or insurgents.
But we do not want to go into greater detail on these
activities in the NIE because the information is highly
compartmented and its use would greatly restrict the
dissemination of the NIE. In any event, we believe the
essential points are really made in the first two tics of
Para. 31.
3. We have scheduled the coordination meeting for 14 March. If you
have any guidance to give us, we will advise the agency representatives
of its substance at that meeting and incorporate it into the text of the
estimate.
George Kolt
Attachment
Draft NIE 12.5-86
SECRET/NOFORN
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NIC No. 00832/4
5 March 1986
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
FROM: George Kolt
National Intelligence Officer for Europe
SUBJECT: Status of Draft NIE 12.5-86: Hungary: The Waning of the
Kadar Era
Distribution:
1 - DC I
1 - DDCI
1 - EX.Dir.
1 - ER
1 - C/NIC
1 - VC/NIC/Ford
1 - VC/NIC/Fuller
1 - ADDI
1 - SRP
1 - EURA/E
1 - NIC/AG
1 - NIO/EUR chrono
1 - NIO/EUR development
NIO/EUR/GKOLT/sbl 5MAR86
SECRET/NOFORN
STAT
STAT
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The Director of Central Intelligence
Washington, D.C. 20505
NIC-0929-86
25 February 1986
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
Chairman, National Intelligence Council
NIO for Europe
SUBJECT: Senior Review Panel Comments on Draft
NIE 12.5-86: Hungary: The Waning of
the Kadar Era, dated 19 February 1986
1. The Panel considers the Hungarian draft--by our
reckoning the first in 31 years--an excellent paper. It is
well-organized, clearly presented, informative about the past and
present, estimative about the future. Given the absence of
pressing policy questions, a shorter form would no doubt have
been possible. We raise three reasonably major points and two
specifics:
2. Military Considerations. In a draft which necessarily
has the nature of a general overview, we think many policymakers
will expect some consideration of Hungary's military policies and
Pact relationships. For instance, what have been Budapest's
recent attitudes toward participation in Pact maneuvers and
exercises on Hungarian territory; toward Soviet moves for greater
Pact integration and unity of command; toward Moscow's requests
for increased defense expenditures? Will its traditional trade-
off of submissiveness in such matters in return for greater
internal economic and social latitude likely continue?
Additionally, some appraisal of Hungarian military expenditures
as an element of its budgetary problems, diminished growth, and
indebtedness to the USSR would be useful. What is the probable
domestic economic impact of Hungarian military expenditures over
the next five years?
3. Hungarian-USSR Economic Relationships. The draft gives
generally satisfactory treatment to bilateral trade and payments
questions. It is less adequate on Hungarian responsiveness to a
number of other matters the Soviets have been pushing in Eastern
Europe: increased integration and specialization inside CEMA, a
greater centralization of economic planning, larger shares of
Si ners
OADR
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scientific and technical output for Soviet needs, overt and
clandestine cooperation in technological transfers from the West,
closer industrial coordination across the board. A discussion of
this range of subject matter would we think add to the paper.
4. Key Judgments and the Further Reaches of Optimism. The
final two Key Judgments (pages 4 and may seem to a number of
readers--as they do to us--a bit roseate in their post-1990
outlook. For the most part they make for a cheery coda, but do
not reflect the text (pages 27-28), and are at variance with the
"most likely scenario" (pages 30-31). We think they should be
dropped or balanced and heavily qualified along the lines of
"Implications - for the USSR" (pages 32-34).
5. Finally, two matters on which we suspect additional
specifics would interest policymakers:
a. Debt. Is information available on Hungarian debt to
the USSR to compare with the figure used in the text at page
10 of $9.1 billion in 1980 in hard-currency indebtedness?
(Is no more recent estimate of the latter possible?) What do
we know or conjecture about debt service competition and
priorities between East and West?
b. Insurgency-Terrorist Support. The text notes at
page 21 Hungarian training and weaponry support for Third
World insurgencies, together with the provision of terrorist
transit, "cooperative services" to the KGB, and assistance in
embargoed technology acquisition. Is any evaluation of the
significance of these exertions possible? Are these
activities totally immune to Hungarian cultivation of Western
support relationships?
cc: VC/NIC (Mr. Ford)
VC/NIC (Mr. Fuller)
ODCI/SRP:thelma
Distribution:
1 - Ea Addressee
1 - VC/NIC (Mr. Ford)
1 - VC/NIC (Mr. Fuller)
1 - PO/NIC
1 - ER
1 - SRP File
1 - SRP Chrnnn
1 - SRP
1 - SRP
1 - SR?
2
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