EUROPEAN REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000200610001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 22, 2016
• Document Release Date: June 30, 2011
• Sequence Number: 1
• Publication Date: January 31, 1986
• Content Type: REPORT

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Intelligence
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European Review
Seer-et.
EUR ER 86-004
31 January 1986
Cony 4 5 0
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European Review
West Germany-Netherlands: Governments to Aid Semiconductor 2
ProjectF__1
Italy: Mafia "Maxi-Trial" To Begin
Hungary-Austria: Vienna to Finance Dam
Yugoslavia: Press Targets Corruption
Federal Budget Passes After Debate
Bulgaria: Census Figures ReportedF_~
France: Implications of the New Electoral Law
The return to proportional representation is creating uncertainty
about the aftermath of the French parliamentary election in March.
Commentators are unsure what the legislature's relationship will be
with the traditionally powerful presidency. Understanding the new
electoral law and some of its consequences provides insight on the
chances of instability or paralysis in the French Government after
the election.
Secret
EUR ER 86-004
3/ January 1986
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Switzerland: Next Fighter Procurement
The Swiss Government has initiated a multiyear effort to acquire a
new Air Force jet fighter. Costing about $5 billion, this procurement
will be the most expensive weapons acquisition in Swiss history.
With aircraft from at least three countries under consideration, the
selection process could provoke continuing controversy within the
Swiss Government into the 1990s.
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Some articles are preliminary views of a subject or speculative, but the contents
normally will be coordinated as appropriate with other offices within CIA.
Occasionally an article will represent the views of a single analyst; these items
will be designated as uncoordinated views.
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Bonn will spend $440 million to upgrade and extend the operating life of its aging
fleet of 165 Alpha jets between 1990 and 1995. Extensive improvements will
include advanced navigation systems to enhance night and poor weather flying,
electronic countermeasure equipment, and a redesigned engine. In addition, the
Alphas will have a new antitank munitions disperser and weapons control systems
to deliver the Maverick anti-armor missile, a high-speed antiradiation missile, and
the Sidewinder air-to-air missile
The Alpha jet, built jointly by West Germany and France, is used primarily for
ground attack and training missions and is largely restricted to daytime flying.
The improvements will allow the aircraft to conduct maritime operations,
interdiction, and antihelicopter and antitank warfare. The program also will
1 Secret
EUR ER 86-004
31 January 1986
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through greater redundancy and a larger weapons load
improve the aircraft's versatility by increasing the number of sorties it can fly,
extending its operating range, and enhancing its survivability and reliability
West Germany- Governments to Aid Semiconductor Project
Netherlands
generation of computer memory chips. Bonn's share will be $125 million.
The West German and Dutch Governments, which regard microelectronics as
central to their high-tech promotion efforts, have decided to provide $185 million
in subsidies to the joint Siemens/Philips project to develop by 1989 the next
The project's prospects were unclear last summer when Toshiba came out with
samples of a one-megabit chip and Siemens decided to purchase Toshiba's design.
Siemens is completely committed to drawing abreast of Japan in semiconductor
technology, however, and Siemens and Philips optimistically contend that they will
close the microelectronics gap between West Germany and Japan if they can meet
their target date. Siemens's interest in the project comes not only from a desire to
expand its share of the semiconductor market but also from the hope that the chips
can be used to improve the competitiveness of the company's telecommunications
and factory and office automation products. Siemens currently is the only
European producer of the 256K DRAM, the most advanced computer memory
chip in full commercial production, and Philips is Europe's largest semiconductor
producer.
Palermo Judge Giovanni Falcone, the trial will take at least a year.
The Italian Government on 10 February will begin its long-awaited prosecution of
more than 450 Mafia figures in one of the largest mass trials in the country's
history. The so-called "maxi-trial," which will be held in a fortified gymnasium
courtroom in Palermo, is the culmination of more than two years of painstaking
work by Palermo's small pool of anti-Mafia judges, magistrates, and law
enforcement officials. Many defendants were arrested in carefully orchestrated
mass roundups over the last two years and face charges ranging from Mafia
conspiracy and drug trafficking to responsibility for more than a hundred
homicides, including anti-Mafia chief Gen. Dalla Chiesa in 1982. According to
Foremost among the indicted Mafiosi are key members of the Salvo and Greco
families. Recent revelations about their wealth and influence as power brokers in
Sicily's Christian Democrat-dominated political system have affirmed the
existence on the island of a "government within the government." Indeed, the
prosecution's pretrial report documented several episodes of Mafia collusion
among Communist as well as Christian Democratic politicians. The trial comes
amid a growing belief among anti-Mafia prosecutors and investigators that Rome
is backing away from its promise to support regional efforts against Mafia
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influence. The murders of several police and government officials in Sicily last
summer, interpreted by authorities as pretrial intimidation, strained Palermo's
already tense relations with Rome over inadequate allocation of resources to
combat the Mafia. Several key officials have confided to the US Consul General in
Palermo that they foresee a posttrial "pax Mafiosi" that will mark the end of the
current anti-Mafia enforcement effort and a return to the status quo ante.
Hungary-Austria Vienna to Finance Dam
Austria has agreed to provide Hungary substantial financial and technological
support for the controversial Nagymaros Dam, part of a joint Czechoslovak-
Hungarian hydroelectric complex on the Danube. The Austrian Government will
guarantee bank loans covering nearly 90 percent of the estimated $440-million
cost of the dam, and Austrian companies will perform 70 percent of the
construction. To repay the loans, Hungary will deliver 1.2 billion kilowatt-hours of
electricity annually to Austria-two-thirds of its share of the complex's output-
over a 20-year period starting in 1996, when work is scheduled to be completed.
After dragging its feet since 1977, Budapest agreed to proceed last year in
response to pressure from Moscow and Prague. Austrian participation will
alleviate the concerns of some Hungarian officials about the project's cost and will
free Budapest to channel resources to energy investments it considers more
productive. But the meager return Hungary stands to derive from the project-less
than 2 percent of its current electricity requirements-could revive criticism from
domestic environmental groups, who have attempted to arouse public opposition
through petition drives, pamphleteering, and public meetings
For Vienna, the project will help compensate for the financial and job losses
resulting from environmentalist-inspired delays of the Hainburg hydroelectric
plant and other Austrian power projects. Also, the assured delivery of Hungarian
electricity will mitigate the impact of any future delays in Austrian power plant
construction. The agreement will increase Austria's electricity imports from the
East by about two-thirds, but imports should remain a small fraction of Austria's
total electricity generation.
Yugoslavia Press Targets Corruption
Yugoslavia's loosely controlled press is giving the regime new heartburn with
increasingly sharp and far-reaching attacks on official corruption and abuse of
privilege. In the latest instance, Borba, the normally staid and semiofficial
Belgrade daily, in December took to task a Cabinet minister for condoning and
covering up widespread improprieties. The Cabinet a week later rejected some of
the allegations as false and tendentious but said actions were being taken on other
charges. Last September Borba and other papers set off a row when they charged
that top officials from Vojvodina Province delayed an international train so that it
could be joined by a special lavish coach carrying them and their families home
from vacation.
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Yugoslav officials do business.
The press exposes reflect the growing openness of the country's media and cultural
life since Tito's death, a trend that seems likely to continue despite periodic regime
efforts at clampdowns. They also reflect growing public intolerance for high-level
abuses at a time when citizens are being forced by the government to tighten their
belts. The exposes so far have resulted in some disciplinary actions and calls for
tougher laws, but they are unlikely to change the time-honored way in which
Federal Budget Passes After Debate
the 1986 budget-up from 34 percent in the previous two years.
The contorted process through which Yugoslavia's federal budget was approved
recently illustrates the kind of infighting among special interest groups inherent in
the post-Tito system. Rising prices and a continuing decline in real incomes last
year depressed consumer demand and led to lower than planned federal tax
revenues. Belgrade initially tried to close the budgetary gap this year by increasing
contributions from the republics and provinces, first setting them at 47 percent of
regions, and to reduce republic contributions.
The republics reacted sharply to the proposal, charging that greater contributions
would sap regional development efforts. As a result, Belgrade cut back republic
contributions by a quarter and the draft budget by 9 percent. But the resulting
cuts in defense spending drew strong criticism from the military. The legislature
finally passed the budget with instructions to the government to increase revenue
in the coming year from existing federal sources, to increase subsidies to poorer
The Yugoslav federal budget is funded by a combination of direct federal taxes
(primarily customs duties and value-added taxes) and contributions from the
constituent republics and provinces. Federal expenditures, however, represent only
about 12 percent of total public spending, and about two-thirds of federal receipts
Census Figures Reported
any ethnic breakdown of the population.
Preliminary census results released in mid-January show a continued slowdown in
population growth despite regime efforts to encourage larger families. Bulgaria
reported a population of 8.94 million, an increase of only 215,000 since the 'last
census in 1975 and a step short of the coveted "nine millionth Bulgarian." The
census revealed a decline in working-age population, an increase in the number of
pensioners, and a dramatic growth in urban population. Sofia also reported an
increase in the number of people with secondary education. As expected, the
census did not acknowledge the country's large ethnic Turkish minority or provide
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Most disturbing for Sofia is the drop in working-age population. Despite
improvements in educational levels, Sofia will continue to face shortages of skilled
workers in industry and especially agriculture. The decline in the percentage of the
population below the working age suggests that problems with labor shortages and
conscription levels will persist. The increase in pensioners will be a burden for the
state budget, which must also cope with strains on urban infrastructure caused by
the migration of rural residents to the cities. The regime is now likely to introduce
new incentives to increase birth rates, but we doubt that these are likely to reverse
the trend toward slower population growth.
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France: Implications of
the New Electoral Law
The return to proportional representation in France is
causing a great deal of uncertainty about the
aftermath of the parliamentary election in March.
Although it seems fairly clear that the conservative
opposition will command a majority in the Chamber
of Deputies, commentators are unsure about what the
legislature's relationship will be with the traditionally
powerful presidency. Understanding the mechanics of
the new electoral law and some of its likely
consequences is the first step toward making an
assessment of the chances of instability or paralysis in
the French Government after the election.
Operation of the Old Electoral System
The winner-take-all system had been instituted at the
time of the founding of the Fifth Republic in 1958 in
order to reduce the proliferation of parties that had
incapacitated parliament under the Fourth Republic.
Under the old system France was divided into nearly
500 districts, each of which elected only one
representative. All parties were allowed to compete in
the first round of an election; if no candidate received
51 percent or more of the votes, a runoff election was
held. This system produced one clear winner for each
district, but small parties had little chance of getting
into parliament unless their voters were concentrated
into local strongholds.
The electoral procedures determined the way the
electorate looked at each of the two rounds and
molded politicians' strategies. An electoral maxim in
France was that on the first round people voted with
their hearts and on the second round with their
heads-and pocketbooks. Many people cast a protest
vote during the first round for fringe parties that had
no chance of winning and then shifted to a major
party for the final and decisive ballot. Coalitions were
made and deals struck between the rounds, and
eventually two great alliances-the Socialists and
Communists on the left and the Rally for the
Republic (RPR) and Union for French Democracy
(UDF) on the right-dominated the legislature. The
winner-take-all system was an essential component of
the Socialists' strategy for their victory in 1981
because it made it profitable for them to form an
electoral alliance with the Communists and gave the
Socialists 58 percent of the seats in the legislature
even though they received only 38 percent of the vote
on the first round.
The Proportional System
The new electoral law, passed last June, fulfilled a
longstanding Socialist commitment to make the
electoral system more representative, but it also
responded to pressing tactical needs. The popularity
of President Francois Mitterrand and the Socialists
had slipped considerably since the victory of 1981,
and in the spring of 1985 public opinion polls
indicated that only about a fifth of the electorate
planned to vote for the Socialists in the March 1986
election. Mitterrand's goal in proposing the
legislation, according to the US Embassy in Paris,
was to reduce the magnitude of the expected victory
by his rightist opponents. Mitterrand did not want to
offer his enemies the same opportunity-to capture
control of the legislature with less than 50 percent of
the vote-that the Socialists had in 1981. If the right
could be prevented from getting a majority, the
Socialists would still be a force to reckon with, and
Mitterrand would not have to face a hostile legislature
that might try to weaken his authority or even to drive
him from power.
The proportional representation system proposed by
Mitterrand makes changes in the electoral procedure
that seem like technicalities but in fact have a
considerable impact on how the political system
functions. Under the new law each of France's 96
departments will be an electoral district. Every
department will have at least two deputies, some of
the more populous departments-such as Paris-will
have 20 or more, and the average will be six. Parties
will offer a list of candidates for all of the seats to be
elected from the district. Voters will cast their ballots
for these party lists rather than individuals. There will
be only one round of voting, and the seats will be
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EUR ER 86-004
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distributed proportionally to all parties receiving more
than 5 percent of the vote. In an average district with
six seats, for example, a party getting 30 percent of
the vote would get seats for the top two men on its list
and a party getting 15 percent would send the first
man on its list to the Chamber.
The effect of these procedures will vary according to
the size of the party, but the overall result will be to
make it harder for a single party to obtain a majority
in the legislature.
? Larger parties, including the Socialists, the RPR,
and the UDF, will be favored in the distribution of
seats.
? Medium-sized parties, such as the Communists and
the National Front, will get a small number of seats.
? Small parties, such as the Ecologists and the Left
Radicals, will be eliminated or have only tiny
delegations
The other major result is that voting for lists instead
of individuals strengthens the power of the parties'
national headquarters. Candidates' individual merits
are not as important as their place on the list, and the
headquarters in Paris determine the order in which
candidates appear. This makes it more important for
candidates to cultivate the party leadership rather
than the electorate and reduces the public's ability to
determine its representation directly.
Reaction to the Law
During the parliamentary debate over the electoral
law, there was an outpouring of criticism on both the
left and right of the political spectrum. Many
attacked the bill as a crass and partisan manipulation,
according to Embassy and press reports. By making it
so difficult to get a majority, critics said, Mitterrand
was risking fragmentation and paralysis in the
legislature. Comments from members of the RPR-
the leading party in the polls-were particularly
vehement, because they saw themselves being cheated
of a victory. Others pointed out that the proportional
system would allow the extreme right National Front
into parliament for the first time. Michel Rocard, the
maverick Socialist moderate, resigned from the
cabinet in protest. In the end, however, Mitterrand
used his control of an absolute majority in parliament
to force the legislation through.
Once the law was passed, the major parties scrambled
to calculate the advantages and disadvantages for
them under the new system. Within a week the RPR
and UDF signed an electoral alliance, because the
only way they could hope to win a majority was by
cooperating. Nonetheless, the RPR agreed on joint
tickets in only about half the departments and
preferred to run alone in the most populous districts
where it could pick up the most seats. Both the
National Front and the Communists decided not to
protest against arrangements that would enable them
to have a toehold in parliament
During the autumn, bitter battles for favorable slots
on the electoral lists were waged in all of the parties,
and there were many casualties since party leadership
usually rewarded loyalty at the expense of seniority or
ability. Maurice Couve de Murville, a former foreign
minister but no friend of party leader Jacques Chirac,
was unceremoniously dropped from the RPR list.
There was even more turmoil in the National Front,
where an old associate of party leader Jean-Marie Le
Pen decided he did not like the way the party's lists
were shaping up and revealed sordid details about
how Le Pen had acquired the inheritance that was the
foundation of his personal and political fortunes.
Outlook and Implications
Polling data indicate that the RPR and UDF will
probably gain control of the legislature without
having to look for support from either the Socialists or
the National Front. Based on a recent survey, one of
the major French weekly newsmagazines is projecting
the following results for the March election (289 seats
will be necessary for a majority):
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If the actual results are in line with these projections,
the main impact of the new law for this election will
be the strengthening of party headquarters' control.
In future elections, where the vote is not so
concentrated in favor of one party or coalition, the
potential for fragmentation will remain, and, unless
the law is changed, it could prevent the construction
of a working majority in the legislature. The RPR is
already on record as favoring a return to the winner-
take-all system.
If, on the other hand, the RPR and UDF do not get a
working majority, the use of proportional
representation could be the beginning of a period of
instability and uncertainty in France. A fractious
parliament, combined with the unprecedented
situation of a president having to do business with a
parliament dominated by his political opponents, is
likely to mean that the French Government would be
inward looking and hesitant until some solution is
found.
If the new law does produce a political crisis, debate
over proportional representation could well be an
important issue in France for the next two years.
Concern about the situation will probably be
considerable if the French conclude that a
constitutional deadlock is not only delaying important
domestic business but also keeping them from playing
their traditionally active role in the world. Mitterrand
could hold a referendum on proportional
representation-or some other issue-to clarify the
situation, or he could call for a new parliamentary
election. Should a government crisis continue for
more than a year, proportional representation would
probably also become an issue in the presidential
campaign scheduled for 1988. 0
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Switzerland:
Next Fighter Procurement
The Swiss Government has begun the first phase of a
multiyear effort to acquire a new jet fighter for its Air
Force. At an estimated overall cost of about $5
billion, this procurement will be the most expensive
weapons acquisition in Swiss history. Because aircraft
from at least three countries are under consideration,
the decision process will be intensely political and
could be a source of continuing controversy within the
Swiss Government into the 1990s.
Need for a New Fighter
The Swiss Air Force (SAF) currently deploys
approximately 100 Northrop F-5Es and 30 French
Mirage Ills in a fighter/ interceptor role, another 18
Mirage III-R reconnaissance aircraft, and about 150
British Hawker-Hunter ground attack aircraft. All of
these aircraft are obsolescent for use in the European
theater, but budget constraints have made their
Leopard II now selected as the Swiss Army's next
main battle tank, the government is at last ready to
address the problem of a modern interceptor for the
this widely exported dual-role
fighter is the choice of the SAF and thus a strong
candidate. The F-16 is technologically mature, with
proven intercept and ground attack variants. Even
though the F-16 will be a relatively old-generation
aircraft in the 1990s, its previously wide acquisition
among US allies may enhance its chances for
selection by the Swiss. By the 1990s the Swiss
probably could buy older F-16s from countries such as
the Netherlands that might be replacing them with
newer aircraft.
SAF.
Specifications for the Next Fighter
The SAF has planned to convert its F-5Es to a ground
attack role as the acquisition of the new-generation
interceptor commenced, but this adaptation may not
prove cost effective. Northrop has assured the SAF
that by 1990 it will be able to strengthen the F-5
wings sufficiently to carry four 800-kilogram bombs
on a mission radius of 200 kilometers, but according
to the he SAF remains
skeptical. The SAF has therefore issued specifications
for an aircraft capable of performing both
intercept/air superiority and ground-attack missions.
As an interceptor, the new fighter must be configured
for day and night visual identification of unknown
aircraft. It also must possess shootup and shootdown
capabilities and be able to defeat hostile aircraft
Northrop F-20 Tigershark. Northrop has built strong
relations with the Swiss parliament and the Federal
Armament Technology and Procurement Group
(GRD) through its performance on the F-5 program:
its timely deliveries, 100-percent offset,' and contracts
to fabricate aircraft parts in Switzerland.
e ieve
the SAF's requirements have been overstated and that
a cheaper F-20 would be an affordable compromise.
I Offsets are agreements requiring a seller to purchase from a buyer
"offsetting" goods and/or services equivalent to a specific amount
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EUR ER 86-004
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The new Northrop fighter is only slightly larger than
the F-5
The F-20 aces major hurdles, however, since
the view of the US defense attache, it is regarded
within the GRD as expensive and-like the heavier
F-15-better suited for longer range offensive air
missions than for Swiss defensive-oriented
Northrop has yet to sell a single F-20 and the aircraft
does not meet the Swiss preference for a
technologically mature system.
McDonnell Douglas F/A-18 Hornet. Newer than the
F-16, the F/A-18 is already flying for Canada and
Australia as well as the US Navy. It might be seen as
a compromise between the proven but older F-16 and
the unproven technology of two of the non-US
candidates-the French Rafale and Swedish Gripen,
both of which are still in development.
the Swiss are
Recent price reductions for the F /A-18 will help to
counter Swiss perceptions that it is a too expensive,
top-of-the-line option.
Saab-Scania JAS-39 Gripen. This aircraft will be
Sweden's next-generation fighter and is being
developed as a multirole interceptor/attack/
reconnaissance system. Its consideration strengthens
Swiss ties to a fellow neutral country and may pacify
Switzerland's vocal socialists. The first Gripen
prototype is not scheduled to fly until 1987, and Saab
must overcome the SAF's concern about unproven
technology. If, however, the procurement timetable
slips from 1990 to 1992 (1991 is an election year not
favorable for large acquisition items in the budget),
the Gripen may represent a more viable advanced-
technology option with several years of operating
experience to its credit. One final disadvantage Saab
must address is the Gripen's projected high cost,
resulting in part from the expected short production
run for the Swedish Air Force.
Dassault Mirage 2000. Another modern multirole
fighter, the Mirage 2000 was developed as a long-
range interceptor/attack/reconnaissance aircraft. It
entered service with the French Air Force in 1982 and
has been sold to Egypt, India, Peru, and Greece. In
requirements.
slips to 1992.
Dassault-Breguet Rafale. This next-generation
fighter was France's candidate for the multinational
European Fighter Aircraft (EFA) project. When
Britain, West Germany, Italy, and Spain opted for a
larger, heavier aircraft optimized as an interceptor,
France chose to continue development of the Rafale
as a lighter, cheaper multirole fighter with a primary
ground attack mission. A demonstrator is scheduled
to begin flight-testing in June 1986 and production
aircraft could be available in the mid-1990s. Like the
Gripen, the Rafale represents untested technology
and may be competitive only if Swiss procurement
New Key Player in Swiss Acquisition Process
Dr. Felix Max Wittlin, who became chief of GRD in
July 1985, will exercise a major role in evaluating the
candidates for the SAF's next fighter. As head of
GRD he is a member of the Commission for National
Military Defense, chaired by the Minister of Defense
and including the Chief of General Staff, the Chief of
Training, and the five lieutenant generals who
command the Swiss Air Force and the four Army
corps. Since the military members of the commission
rotate relatively often, the civilian armament chief
tends to be the member most experienced in
procurement matters. Wittlin's background should
enable him to deal effectively with both the Swiss
military and the Swiss defense industrial sector.
Wittlin has served as an artillery officer, rising to the
rank of brigadier and forging close ties to the military
establishment. He also has sound credentials within
the Swiss industrial sector, having attained the post of
Deputy General Director in Brown, Boveri, and CIE
Switzerland Group. Wittlin speaks fluent English and
is well acquainted with the United States. He
attended the Advanced Artillery Course at Fort Sill in
1966-67 and the Executive Management Course at
Stanford in 1978. Wittlin's deputy at the GRD is
Rene Huber, who should be well acquainted with
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Picking a Winner
The Swiss intend to conduct their selection process in
three phases:
Definition Phase. This involves a general survey of
possible candidates through contractor presentations.
Presentation data will be used to generate a
questionnaire. Northrop began the definition phase
with a full presentation on 18 November. Dassault
and Saab are expected to make presentations in
January, and General Dynamics and McDonnell
Douglas in February.
Preevaluation Phase. In mid-1986 selected
contractors will receive a detailed questionnaire.
Swiss teams will then visit these companies and make
preliminary evaluation flights. At the end of this
phase, two finalists will be submitted to Swiss
authorities for approval.
Final Evaluation Phase. There will be further
evaluation flights of the finalists in Switzerland,
followed by negotiation of terms and preparation of a
procurement message to the Swiss parliament.
Regardless of which aircraft are the finalists, the
Swiss will demand either production within
Switzerland or a very large offset agreement.
American defense contractors through his service as
the GRD representative at the Swiss Embassy in
Washington.
Political Pressures
Major Swiss defense procurement decisions have
grown increasingly bitter and politicized. The first
Swiss arms chief resigned after French intervention in
1972 aborted a decision to acquire the LTV A-7
Corsair ground support aircraft, following five years
of evaluation (the older British Hawker-Hunter was
eventually selected). In 1983, both the GRD and the
Swiss military solidly favored Sikorsky's Blackhawk
helicopter over the French Super Puma, but again
French pressure forced a reversal. We expect similar
pressures as the Swiss fighter selection process
progresses. Indeed, comments by a senior GRD
official suggest that the GRD may hope the planned
purchase of French Super Puma helicopters and a
possible contract for French Alpha Jet trainers next
year will relieve some of the pressure to buy a French
interceptor. Remarks by the British and Israeli air
attaches in Bern, moreover, indicate that those
countries also will press to have the British Aerospace
Tornado and Israel's developmental Lavi included in
the competition. The Tornado's omission from the
original list of candidates may in part reflect Swiss
displeasure at British selection of the Brazilian
Tucano trainer in 1985 over the Swiss Pilatus.
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Economic News in Brief
Bonn extending maternity leave with guaranteed
reemployment to 10 months this year and to 12 months
in 1988... includes monthly payments of up to $240
and paid health, unemployment, pension contributions
... prompted by concern over declining population.
Some West German firms closing production facilities
in Asia ... resuming domestic production as Asian
low-wage advantage decreases ... West German
wage costs have increased less, and labor share of
product cost declining in consumer electronics, some
textiles ... LDC debt crisis also seen increasing risks
of production abroad
Several Belgian firms hope to send officials to US for
SDI discussions, probably in April ... interested in
joint research with US firms ... Brussels not
participating officially in SDI projects but facilitating
private involvement.
UK's Westland helicopter stockholders have blocked
Sikorsky bailout ... plan needed 75-percent approval,
but got only 65 percent ... company directors still
favor US option ... drawn out struggle has
embarrassed Prime Minister Thatcher.F__1
Poland met with bank creditors on 28 January,
probably seeking relief from rescheduled debt
payments for 1986, 1987 ... bankers may be willing
to amend accords ... Warsaw already has asked
government creditors to defer debts.
25 Secret
EUR ER 86-004
31 January 1986
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