SOVIET UNION EASTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002300120002-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 12, 2016
• Document Release Date: November 27, 2001
• Sequence Number: 2
• Publication Date: December 4, 1975
• Content Type: NOTES

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Secret
NOFORN
iL\E!iF ]ED1flE
Soviet Union
Eastern Europe
Top Secret
13
December 4, 1975
SC No. 00550/75
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Warning Notice
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(WNINTEL)
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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Controlled by Originator
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Classified by 010725
Exempt from General Declassification Schedule
of E 0. 11652, exemption category:
?5B(1), (2), and (3)
Automatically declassified on:
date impossible to determine
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SOVIET UNION - EASTERN EUROPE
This publication is prepared for regional specialists in the Washington com-
munity by the USSR - Eastern Europe Division, Office of Current Intel-
ligence, 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.
December 4, 1975
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Bulgaria - West Germany: "Hearts and Flowers"
Diplomacy . . . . . . . . . . . . . . . . . . . 3
Polish Zloty Declines in Value on Black
Market . . . . . . . . . . . . . . . . . . . 5
No Surprises at Polish Party Congress. . . . . . 6
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Bulgaria - West Germany: "Hearts and
Flowers" Diplomacy
Schmidt, Social Democratic Party leader Brandt,
Christian Democratic Union chief Kohl, and Communist
Party head Mies. In Zhivkov's conversations with
I President Scheel, the "spirit of Helsinki" reigned
T
h
Bulgarian party/state leader Todor Zhivkov's
visit.to Bonn last week (November 24-28) went even
better than planned, according to the West German
ambassador in Sofia. An unexpectedly "cordial"
atmosphere provided a backdrop for the visit. The
talks themselves were, predictably, economic-orien-
-ted, with little noteworthy political content.
The Bulgarian leader met with a host of political
personalities, including President Scheel, Chancellor
supreme.
e two men covered a wide range or inter-
national topics--Cyprus, the Middle East, and post-
CSCE Europe--and declared they share "identical in-
terests" on many issues. They also signed a bland
"joint declaration" of principles and a statement of
"perspectives" for economic cooperation. The foreign
ministers signed a framework cultural accord
The main theme of the visit was trade. Bonn
is by far Sofia's largest Western trade partner--cap-
turing some 22 percent of Bulgarian trade with the
non-communist world in 1974. Sofia is burdened
y with a sizable deficit--somewhat less than $400
million in 1974--and Zhivkov reportedly raised the
sensitive issue of redressing this imbalance. He
also twice asked for German credits on concessionary
terms. Bonn turned down a similar request before
the trip began. Taking time out from his official
talks, Zhivkov visited the factories of Daimler-Benz,
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Krupp, and Hoechst, where he signed various contracts.
He treated all his audiences to the same pep talk,
proclaiming that Bulgaria is an "equal and sought-
after partner" with an important role to play in bi-
lateral trade.
The Bulgarian leader seemed particularly pleased
with the special attention his German hosts lavished
upon him. Zhivkov undoubtedly felt all the hoopla
helped boost his much-sought-after image of an in-
ternational statesman.
with his hosts, and reportedly "charmed the German
leadership" with his peasant humor.
e u garian, moreover, struck up a lively repartee
It is curious that Zhivkov was treated to such
a warm reception, especially since Bonn had expected
few concrete results from the visit. The West Ger-
man ambassador, when asked about the unusual display,
recalled German "sentimentality" and the traditional
ties of friendship between the two peoples. The
diplomat also conjectured that Bonn may be trying
to p:Lay "catch-up" diplomacy with those East European
states that were among the last to establish diplomatic
relations with it. (CONFIDENTIAL)
December 4, 1975
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Polish Zloty Declines in
Value on Black Market
Polish citizens are apparently becoming in-
creasingly concerned that the regime will soon de-
value the zloty. As a result, black market rates
for foreign currency have skyrocketed. A dollar,
for example, is now worth from 120 to 150 zloty com-
pared to its previous value of 85-95.
Rumors of devaluation circulated so widely this
fall that Prime Minister. Jaroszewicz was forced to
deny them publicly. The skeptical public, however,
is obviously hedging its bets. (CONFIDENTIAL)
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December 4, 1975
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No Surprises at Polish Party Congress
The seventh congress of the Polish Communist
Party that opens on Monday will enthusiastically
endorse party leader Edward Gierek's economic poli-
cies and approve his programs for the next five
years. Just below the surface, however, there is
considerable concern within the leadership that the
volatile and demanding population is still not satis-
fied and is prepared to express its unhappiness in
word and deed.
Since 1971 party chief Gierek has moved the
Polish economy into high gear. The goals of the
current five year plan--already raised twice--will
for the most part be significantly exceeded. Much
of this advance is due to Gierek's successful cam-
paign to use Western credits and technology to
modernize the economy.
The Polish consumer has fared well. Average
real wages have increased 40 percent since 1971,
and both the quantity and quality of consumer goods
have improved dramatically. The average citizen,
however, has tasted the good life and is prone to
forget how much has changed since 1971. He has
become increasingly concerned about inflation and
the failure of supply to meet the rising demand for
many consumer items, particularly meat. Consequently,
the regime this year has had to contend with mounting
public tension. The party has made special efforts
to see that stores are well stocked in the pre-
Congress and Christmas season, and the US embassy
reports that tensions have decreased since their
mid-October high.
The Polish people believe, and with good reason,
that the rapid progress they have experienced will
be slowed down by various austerity measures, in-
cluding widespread price increases. Gierek's chief
domestic policy aide, however, recently told a US
embassy officer that early next year Warsaw would
decide "at leisure" when and on what items prices
would be increased.
December 4, 1975
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For the longer term, the Gierek regime will
find it increasingly difficult to continue the re-
cent pace of economic growth. Warsaw will have to
search harder and pay more for essential Western
credits and technology. Soviet raw material de-
liveries will fall further behind in meeting Polish
needs and will be more costly. Wage increases will
have to be more closely tied to increases in produc-
tivity, and consumer prices are sure to go up.
Gierek's political tenure may well depend on how he
manages the difficult problems without alienating
the Polish population.
No wholesale changes within the leadership or
in its policies will be made at the congress. In-
deed, Gierek's aide told a US embassy official there
would be "no surprises." Despite the numerous
rumors of policy disputes within the leadership,
there is no serious challenger to Gierek. He still
probably has considerable popular support and appears
to have the party bureaucracy firmly in hand as a
result of his reorganization of the administrative
bureaucracy earlier this year.
Some personnel changes are expected, at the
congress. The former number-two man in the party,
Franciszek Szlachcic, who was demoted last year
for excessive nationalism and personal ambition,
will leave the Politburo. The ailing Mieczyslaw
Jagielski has partially recovered from a. heart
attack and will reportedly remain. The new planning
commission head and Gierek associate, Tadeusz
Wrzaszczyk, is a likely candidate to move onto the
Politburo.
The congress itself will last five days. Gierek
will kick it off with a nationally televised speech
that will highlight past accomplishments while
f making clear that there are limits to what can be
done. On foreign policy he will recite Poland's
full allegiance to the Soviet Union. Prime Minister
Jaroszewicz will outline the 1976-80 five year
plan.
December 4, 1975
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Soviet party first secretary Brezhnev will
witness the Polish pep rally. The leaders of Po-
land's East European allies--with the exception of
Romania's Ceausescu--will also be on hand.
doubtedly try to allay Moscow's concerns about the
westward drift of the Polish economy. (CONFIDENTIAL
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In private discussions, the Polish leadership
will undoubtedly try to sound out their Soviet guests
on any impending personnel changes in Moscow. The
Poles are reportedly concerned that changes at the
Soviet party congress in February could involve
Brezhnev, whom they consider to be sympathetic to
their problems. Gierek, for his part, will un-
December 4, 1975
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