STAFF NOTES: SOVIET UNION EASTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000400080002-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 16, 2016
• Document Release Date: March 24, 2005
• Sequence Number: 2
• Publication Date: March 14, 1975
• Content Type: REPORT

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Top Secret
,~;-T,T& ~ ~ M
Soviet Union
Eastern Europe
State Department review completed
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Top Secret
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SOVIET UNION ? EASTERN EUROPE
CONTENTS
March 14, 1975
Moscow Pleased With Portuguese
Developments. . . . . . . . . . .
Czechoslovakia: Economic Problems
in Slovakia . . . . . . . . . . . . . . .
. .
. 3
Demichev and Soviet Culture: Marking Time? . .
. 5
Romania Willi
ng To Help Settle
Cyprus Problem . . . . . . . . . . . . .
. .
. 8
Yugoslavs Push Meeting Between European
Socialist and Communist Parties . . . . .
. .
. 9
Soviet Uranium Enrichment Sales . . . . . .
. .
.11
Soviet F
oreign Trade Ministry Reorganizes .
. .
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Moscow Pleased With ?c::t uoso Developments
Heavy Soviet press coverage of recent events in
Portugal, reflects Moscow' a complete satisfaction with
developments. Pravda has :`epeatod the Portuguese
Communist Party's call far quick punishment of the
perpetrators of the coup .ittempt. The Soviet press
has so far refrained fro.w blaming the coup on inter-
ference by outside force., but judging from past So-
viet performance, this m iy not last long.
The turn of events in Portugal is an almost unal-
loyed blessing for Moscovi. The coup attempt lend:,
credibility to repeated Soviet warnings about the
danger of counter-revs ution and, Moscow hopes, opens
the way for the fundamv;.,:ztal social and economic trans-
formations that Moscow has cited as unfinished busi-
ness of the Portuguese revolution. As preliminary
Soviet commentary notes, the unsuccessful coup has
brought the Portuguese Communist Party and the Armed
Forces Movement still closer. Moscow has also noted
with approval the Movement's efforts to institution-
alize itself, which, given its present good relation-
ship with the Port ,geese Communist Party, should as-
sure the Portuguese communists of a continued vital
role in the country.. Implicit in this commentary is
the view that the Portuguese party is piyinc; its
cards correctly, aci should continue to forgo any
:;nab for power on :i.+r:s own in favor of working with
the government as ':he principal locus of power in
Portugal.
As a result of the latest turn of events, the
Soviets may be encouraged to become more active in
support of the Portuguese government, although their
continuing concern to avoid provoking foreign re-
action and giving the appearance of violating detente
will probably lead the Soviets to keep their ac-
tivities inconspicuous.
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Czechoslovakia: Economic
Problems in Sl va is
Newly acquired information sheds some light
on the continuing debate over economic issues
within Czechoslovak party councils.
An article in the party gaily Rude Pravo
discussed regional failures in last year's plan,
but conspicuously omitted any mention of the
West Slovak region the Slovak capital, Brati-
slava. These two regions--Slovakia's most im-
portant industrial areas--apparently contain 31
of thou 81 enterprises that did not meet their eco-
nomic goals. Furthermore, the East Slovak region,
which had only five plan failures, was chided be-
cause 13 enterprises were allowed to engineer a
reduction in their plan goals. About 17 percent
of the enterprises in Slovakia failed to meet the
plan, as opposed to only 7 percent in the Czech
lands.
Slovakia's economic problems have clear po-
litical implications. The condition of the econ-
omy was apparently discussed in frank terms during
the party Central Committee plenum in November,
but "failures in implementing the plenum's reso-
lution" required an extraordinary meeting of the
Slovak party Central Committee in January. In the
interim, some Slovak leaders, including Deputy
Premier Durkovic, suggested that structural re-
forms--not mere exhortation--were needed to solve
economic problems, but their views apparently failed
to convince the top leadership.
The dichotomy in the performance of the Czech
lands and Slovakia has heightened the politically
explosive rivalry between the nationalities. As
a result of Slovak charges of discrimination, in-
vestment in Slovakia has rapidly risen since the
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late 1960s; this has led to Czech grumbling. Slo-
valcia accounts for only one quarter of the country's
industrial production, but receives one third of
the industrial investment and has been awarded the
more recent highly visible industrial projects.
Warnings about the dangers of nationalism are
on the increase. Alois Indra, a notorious hard liner
and the top Czech in the leadership, has reportedly
sought to capitalize on the Czech/Slovak rivalry to
strengthen his position in intra-party maneuverings.
Party chief Husak, as a Slovak, has to consider the
reactions of both a regional and national constit-
uency as he seeks a solution to the economic debate.
Husak's lightning visit on March 3 to Moscow may
have been made to gain Brezhnev's personal support.
A subsequent meeting of the top party leader-
ship with all the regional leaders on March 12
discussed "implementing the requirements of the
November plenums," demonstrating that the economic
problems persist and the debate coiitinues_
Marcl, 1.4, 1975
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Demichev and Soviet Culture: Marking Time?
ime?
Since about the turn of the year, Soviet in-
tellectuals reportedly have sensed an air of flux
and possible signs of a reappraisal of cultural
policy by the regime. The reported appearance in
Moscow this week of a new underground journal--20th
Century--may well be a probe by its chief editor,
Roy Me!1vedev, to test these currents. The unsettled
atmosphere in part results from the appointment last
November of candidate Politburo member Petr Demichev
as minister of culture and the leadership's failure
at the bacember Central Committee plenum to fill the
vacancy
retariat
created by his rem
.
ovz7.
from the party Sec-
A n
in the c
umber of contradic
ultural area. In
tory
the
phenomena have appeared
sectors that are under
the clos
arts, pa
has take
matic, s
tablishme
from the
e purview of the c
inting, music, and
n, since Demichev'
ophisticated, and
nt and dissident
apparently wider
ultu
the
s ap
open
arti
limi
re ministry--graphic
ater--official policy
pointment, a more prag-
approach. Both es-
sts have, benefited
ts on what is permis-
sible ar
tistic activity
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Othe
establish
under dir
reportedl
r important cultu
ment literature,
ect control of th
y nearly immobili
ral
whic
e pa
zed
sectors, especially
h is traditionally
rty Secretariat, are
for lack of a firm
hand. In
mid-February,
a ser
ious
backlog exists in most
publishin
g houses because
the
regime's censors are 25X1
receiving
no party guidanc
e:
emic ev had
lon
g been responsible
tor cultu
re, propaganda, a
nd p
arty indoctrination. 25X1
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Ile was generally considered a moderating influence,
despite his orthodox public statements and strong
devotion to doctrine.
The purview of senior party secretary for idr
ology Suslov extends broadly over the cultural and
propaganda areas, but the pattern of public appear-
ances by other Soviet leader;.- suggests that, for
the time being, several incumbent secretaries are
taking up some of the slack. Demichev's shift to
the culture ministry, a post subordinate to the one
he helc' on the Secretariat, was clearly a demotion.
Some observers have ascribed the shift to the
leadership's dissatisfaction with his performance
in overseeing propaganda and party indoctrination--
areas that have come in for critical attention and
are central to the ideological reinvigoration drive
under way since last summer. Otheir reports specu-
latively linked the shift to a conservative backlash
against Demichev's probable intervention last Sep-
tember to permit dissident Moscow artists to hold
an open air exhibit after the suppression b,? local.
authorities of the artists' earlier attempt at a
show.
Whatever Demichev's possible shortcomings may
have been in supervising propaganda, as minister of
culture he has appeared neither contrite nor as an
administrator under the thumb of party conservatives.
Demichev's relatively self-assured behavior, both in
terms of his more open style of policy implementation
and of his reported determination to clean up cor-
ruption and streamline the ministry's bureaucracy,
suggests that at least for now he exercises consid-
erably more authority than is customary for a minis-
ter.
In this, he may be taking advantage of the par-
tial vacuum in cultural affairs that exists on the
Secretariat, as well as of his status as candidate
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Politburo member. Sergey M;khaikov, the chairman
of the RSFSR Writers Union currently visiting the
US, has privately confirmed that ao replacement
has been named to Domichev's fo)rsor slot on the
Secretariat, and that as a result the authority
of the vulture ministry has increased.
There is general, if speculative, agreement
among most sources and observers that the leader-
ship's failure to fill Demichev's Secretariat post
reflects indecision or even deadlock on whom to
choose. The choice may be particularly difficult
since the job's control over implementation of
cultural policy has a direct bearing on the USSR's
image abroad during a time of detente. The same
indecision or even deadlock has left the CPSU Cen-
tral. Committee's Propaganda Department without a
chief since 1970. Indeed, it took well rr-er a year
to get a first deputy chief replaced. The naming
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and the setting of a clear line on culture may have
to await the resolution of wider political and
possibly Policy issues.
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Romania Willing To Het
79-e e Cyprus Pro em
In a recent conversation with the US ambas-
sador in Bucharest, Foreign Minister MacoveLcu re-
iterated his country's concern over the situation
in Cyprus and again expressed Bucharest's inter-
est in playing an active role in settling the
conflict.
Macivescu's remarks echoed those of President
Ceausescu, who on March 6 pledged that Romania
would work to bring Greece and Turkey together.
"When there is a fire in the neighborhood, no one
can stand unmindful and wait for the fire to en-
gulf others." For this reason Romania suggested
that a Balkan conference be held to discuss the
problem.
During Macovescu's trips to Athens from Feb-
ruary 27 to March 3 and to Ankara on March 7 and 8
he, too, proposed a Balkan conference. Such a
conference, he explained, could facilitate the
exchange of ideas that might help get things back
on track, or at least result in a less strained
atmosphere. It was not, he insisted, an effort to
replace any other forum for finding a peace settle-
ment. Whatever Romania's motivation, Turkey turned
thumbs down on the proposal.
Romania, according to Macovescu, has no pre-
tensions that it could solve or even play a central
role in solution of the Cyprus problem. What Maco-
vescu did not say is that Bucharest fears a renewal
of hostilities would increase Romania's (and the
Balkans') strategic importance to the Kremlin, which
in turn might apply greater pressure for conformity
on maverick Romania.
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Yugoslavs Push Meeting Between European
Socialist and Communist Parties
Belgrade is trying to organize an experimental
meeting of socialists and communists from Europe
and the Third World.
The project is an outgrowth of Belgrade's
participation in preparations for a European com-
munist conference. Tito's party, like other com-
munist mavericks, has long been in the vanguard of
those wanting to establish multilateral contacts
between communists and other leftists. Belgrade
hopes that the blending of different viewpoints
would help to dilute Moscow's grip on the commu-
nist movement. Such gatherings have been regu-
larly proposed by the independent parties at the
preparatory sessions for the European Communist
gathering.
Moscow apparently had given its blessing to
the experiment in order to explore possibilities
for increasing its influence in Western Europe.
The Soviets and their loyal East European allies,
however, are primarily concerned about insulating
their regimes against Western "bourgeois" ideologies.
This, plus a strong sense of caution among West
European socialists, has worked against any signif-
icant progress in establishing international con-
tacts between socialists and communists. In ad-
dition, a session in Belgrade could degenerate
into a forum for controversial positions of indi-
vidual parties.
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The theme of the 3ociala.st-communist got-
together is to be a discussion of ways to improve
European contacts with the Third World. Tha'.~ Third
World angle is a superficial evasion, of the meet-
ing's real purpose--establishing now contacts be-
tween European socialists and communists--that
was introduced to lure reticent socialists. In
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fact, Third World participation appears to be
minimal; Belgrade has so far invited only the
Algerians.
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Soviet Uranium Enrichment Sales
Moscow has concluded at least 17 individual
contracts with nine West European countries to
supply uranium enrichment services. The contracts
total almost 27 million separative work units,
sufficient for ten years' operation of approximately
25 1,000-megawatt nuclear power reactors. Under
the contracts the customer supplies natura] uranium
which is enriched in the USSR and then returned to
the customer for use as nuclear fuel. The most
recent-,contract was concluded early this year with
Britain's Central Electricity Generating Board.
Based on n sliding scale of discounts keyed
to the UL) price of enrichment services, the value
of Soviet sales so far is estimated at almost $1.5
billion. Now that US enrichment capacity is fully
committed, however, and production from new facili-
ties is exp. acted to be more expensive, the Soviet
contracts may be worth substantially more. Under
normal trading practice, the enrichment customer
pays the going price at the time of delivery.
Although the current economic situation. has
put a sgLeeze on nuclear rower development programs
in many nations, existing and currently planned en-
richment capacity in the West probably will be in-
sufficient to meet world demand by the mid- to late-
1980s. The Soviet Union stands ready to fill the
gap, at least temporarily. In addition to contracts
already signed, Moscow has given options or made
offers to supply enrichment services that would in-
crease its business more than two and a half times,
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Soviet Foreign Trade Minis try Reorganizes
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of machinery and equipment.
Cherskov, and Tsukanov served as his deputies, and
Ponomarev was in charge of a department for import
The USSR Ministry of Foreign Trade is under
fire from officials of the State Committee for
Science and Technology for its alleged incompetence
in handling so-called "compensation" deals with
Western companies. As a result, it is r,oorganiz-
ing its Plain Administration for the Import of Ma-
chinery and Equipment from Capitalist Countries
Soviet officials
are hopeful that ? e restructuring will reduce the
amount of negotiating time required before con-
tracts are signed.
Recent reporting from the US embassy in Moscow
reveals that the administration was subdivided after
its chief, V. N. Sushkov, was promoted to the post
of deputy foreign trade minister in February. As
a deputy minister, Sushkov presumably has overall
responsibility for compensation agreements. Under
his jurisdiction there apparently are now two main
administrations: the Main Administration for Com-
pensation Projects and Importation of Machinery
and Equipment from Capitalist Countries, headed by
A. L. Stesnov, and a secor.d administration (exact
title unknown) that will handle other imports and
non-copn',sation agreements. The acting chief of
the lat;.er is T. Ya. Cherskov. Stesnov's adminis-
tration is to handle all large deals which may de-
velop into compensation projects. He has two dep-
uties; S. V. Tsukanov, who specializes in heavy
industry and ferrous and non-ferrous metallurgy,
and A. S. Ponomarev, who deals primarily with
chemicals and light industry.
All the principals in the reorganization worked
for Sushkov in the old main administration. Stesnov,
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