WESTERN EUROPE IN 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87R00529R000200100036-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: September 27, 2010
• Sequence Number: 36
• Publication Date: January 17, 1983
• Content Type: MEMO

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THE DIRECTOR OF CENTRAL INTELLIGENCE
NIC 10418-83
National Intelligence Council 17 January 1983
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
THROUGH : Chairman, National Intelligence Council
FROM : Milton Kovner National Intelligence Officer for Western Europe
SUBJECT : Western Europe in 1983
Western Europe in 1983 will be subjected to discordant impulses and
pressures that will test the resiliency of national governments as well
as intra-European cohesion and trans-Atlantic ties. Agreement within the
Alliance on the need to counter the Soviet military buildup will mask
considerable divergence about the nature of the Soviet threat and the
strategies to deal with it. Europe's progress toward economic and
political unity will be stalled'by the imperatives of economic self-
interest and. complications posed by Portuguese and Spanish requests for
accession to the Community. Allied cohesion will be strained by
membership in the Alliance of governments, such as Greece and Spain,
uncertain in their commitment to collective security. And internal
consensus, on both domestic and international issues, will be tested by
elections in the FRG, and probably in the UK and elsewhere. Hence, .
securing common objectives, both'in the European theater and beyond it,
will pose an increasing challenge to us; and the Soviet Union will be
quick to exploit and exacerbate differences in approach to detente and
East-West relations.
INF and European Security
Although many Western European governments harbor hopes that tangible
progress in negotiations will make INF deployment unnecessary, and some
will seek to postpone final decisions in anticipation of achieving it,
absent agreement in Geneva we believe basing countries will remain firm
in their commitment to NATO's dual decision, and even those currently
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most equivocal about actual deployment - Belgium and the Netherlands -
will ultimately agree to installation if the FRG, as seems likely under a
Rohl government, adheres to deployment schedules. Certainly prior to the
German elections, and probably well beyond it, the issue will remain
fluid, with many of our allies hedging or shifting their positions in
response to public pressures. While most Western governments prefer the
zero option and will continue to hold it out as the ideal solution, many
increasingly will argue that at least the appearance of US flexibility in
Geneva will be tactically necessary to mitigate the political costs of
deployment; and the US will be under growing pressure to consider
"interim" solutions while preserving the zero option as a longer term
objective. Should the Soviet Union add convincing substance to their INF
proposals, pressures'could increase in some quarters for delay in
deployment lest installation of the missiles preclude chances of ultimate
accommodation in Geneva.
Nevertheless, we believe the odds favor installation of the missiles
and maintenance of a visible "coupling" between US and European defense
absent agreement in Geneva and barring political shifts in the FRG or
Italy, for example, not to deploy. However, the issue of assuring
Europe's defense will be the subject of intensive debate well beyond the
"Year of the Missile," fueled by such questions as the proper mix of
conventional vs. nuclear forces, the capacity and roles of the French and
British deterrents, growing French-German defense cooperation, and
.Europe's willingness to make up for US forces targetted for out-of-area
contingencies.
European Community
Forecasts are pessimistic about West Europe's economic prospects in
1983, with predictions of continued low growth and high unemployment
feeding an already evident loss of confidence in Europe's ability quickly
to reverse the trend. Pressures will increase within Europe for
protectionist measures, and although a counter-move to eliminate internal
trade barriers may take hold within the European Community, this may come
at the expense of greater "vigilance" - promoted notably by France -- at
the Community's external borders.
The EC's major challenges -- advancing beyond the customs union and a
common agricultural policy, finding formulas for more equitable burden
sharing, preparing for another enlargement, and preventing mutually
damaging trade conflicts with its international partners -- will not be
new, but will be even more difficult to meet in the anticipated climate
of low economic growth. The possibility of elections during the year in
Britain will put both London and its EC partners under the additional
strain of weighing EC budget reform and each new proposal against the
resurgent debate in the UK over Community membership'and the possibility
of boosting the prospects of the anti-EC Labor Party. France, meanwhile,
R ET
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will threaten national protectionism in the hope of selling more of it. to
the Community as a whole - and it is less than certain that either
Germany or Britain, themselves under similar pressures, will resist very
strongly or take the initiative to push instead for EC-wide structural
adjustment. Despite pressures from Portugal and Spain to complete
negotiations for their membership in the community, early progress is
unlikely, hung up as it is over the fears of France, Italy, and others
that they would largely be the ones to pay for the EC absorbing the'
output of the new members' heavily agricultural economies.
France
Elections this spring in France will also mark a watershed, even
though the results of the local contests will not change party
representation in the Socialist-dominated parliament. Some falling-off
of support for the Socialist-Communist coalition will be evident, and ,a
large deterioration in the left's vote will encourage calls for a return
to Socialist fundamentalism. We doubt, however, that Mitterrand will be
deterred from pursuing relatively austere economic policies. While
Mitterrand will prefer the Communists to remain in the government, we
think there are limits to what he. will be willing to pay to prevent them
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from leaving. Should they leave, we would expect government
encouragement of a return to proportional representation -- which would
eventually permit the development of a center-left coalition. We expect
.little change in French foreign policies, which will continue to
emphasize national freedom of action to protect France's interests and
magnify its leverage within the European Community and the Alliance.
Despite initial misgivings with respect to both the substance and
direction of the effort, France will cooperate in the series of studies
designed to examine the links between East-West trade and Alliance
security. The exercise will represent a delicate problem in Alliance
management, however, since the need for coordination will have to be
balanced against the demands of France and others to minimize the
appearance of "direction" from NATO or other fora on East-West economic
policies.
Italy
None of the three governments formed from the parliament elected in
1979 has been able to make much progress towards alleviating Italy's most
pressing problems -- bringing prices and costs under control, reducing
the very large budget deficit, or significantly improving Italy's fragile
external payments position. Expectations of a government "crisis" that
would force early elections -- the parliament would normally run until
1984 -- has made unpopular economic decisions even less likely; yet the
edginess of politicians about facing new elections may in fact prolong
the stalemate. It is impossible to forecast with any confidence that
this situation will produce a definitive break with the practice of
center or center-left governments in Italy and movement toward either the
"left alternative" of collaboration between the Socialists and Communists
or an arrangement beween the Christian Democrats and the Communists. But
an increasingly critical political atmosphere is likely in 1983, in which
the PCI may more and more be seen as the key to effective
decision-making. This will be especially true if elections do occur this
year and fail to produce a significant increase in the 9.8% share the
Socialists won in 1979. In the meantime, the PCI will eschew extreme
positions either on foreign affairs; for example, the Communists will not
take the lead in mounting all-out opposition to INF.
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Southern Europe
EC membership is the most important item on the foreign policy agenda
of Spain's new Socialist government, which gives higher priority to
gaining "European" credentials than to moving towards early military
integration with NATO. While we think it unlikely, it cannot be excluded
that Madrid may ultimately seek a French-style membership in.the
Alliance. Prime Minister Gonzalez' domestic power base is relatively
secure for the moment, but he will need evidence of progress towards the
popular goal of Community membership to offset divisiveness that could
emerge at home as the government begins to deal with the difficult issues
of a stagnant economy, persistent terrorism, the demands of Basque and
Catalan nationalism, and educational reform. The desire to avoid
domestic polarization will probably continue to incline the government
away from any early redemption of the Socialists' campaign pledge to call
a referendum on NATO membership.
While Madrid will try to keep separate the questions of Spanish
relations to NATO and ratification of the US-Spanish bases agreement in
order to get the latter approved in parliament, a new US agreement with
Portugal extending and expanding our facilities there will be difficult
-- but attainable -- because of political turbulence within the ruling
center-right coalition that could lead to early elections. Portugal's
Socialist Party led by Mario Soares is well positioned to return to
government in a new election. The principal immediate effect of the
political crisis will be to leave Portugual's mounting economic problems
unresolved.
The Aegean will almost certainly remain an area of political
confrontration between.Greece and Turkey with the complex of unresolved
issues and resultant tensions intermittently threatening overt
hositilities. While each side will shrink from precipitating a crisis,
domestic instabilities, more so in Athens than in Ankara, risk making
each less flexible and less inclined to compromise. Public confidence in
the Papandreou government will almost certainly wane as it fails to stem,
let alone reverse, Greece's economic slide, and the government may seek
new elections -- or foreign adventures -- to strengthen its mandate.
Turkey's scheduled return to civilian rule toward year's end could make
the military regime more rigorous in defending the country's perceived
equities in the Aegean. Greek-Turkish frictions, however, will make
Athens reluctant to sever its NATO or US connection. Greece will remain
in the Alliance, although unresolved command and control arrangements in
the Aegean will inhibit closer cooperation within the integrated command,
and it will distance itself from Allied consensus on many issues of
concern to us in its pursuit of a more independent foreign policy.,
US-Greek relations will become increasingly tense articul rl v he
,base e otiations
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