EUROPEAN REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01184R000200660001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: October 5, 2010
• Sequence Number: 1
• Publication Date: March 13, 1985
• Content Type: REPORT

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Directorate of Wts Secret
Intelligence I MASTER FILE COFY I ~
00 NOT GIVE OUT
MARK IN
European Review
Secret
EUR ER 85-007
13 March 1985
451
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European Review
Malta: Nationalists Challenge Government
Hungary-USSR: Moscow Weighs In Against Nationalism
Articles United Kingdom: Dealing With the Miners' Strike
Prime Minister Thatcher won her battle with the striking coal
miners and their Marxist leader Arthur Scargill when on 3 March
the union voted to end the nearly yearlong strike. Although the
miners failed to disrupt the economy significantly, the cost was
substantial in terms of lost foreign exchange earnings and a higher
budget deficit. The end of the strike is not the end of Thatcher's
problems, either with the miners or with the coal industry. She is
also likely to encounter renewed pressure to improve Britain's
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Western Europe: Attitudes Toward the Olympics
The Moscow and Los Angeles Olympic boycotts have revived public
speculation concerning a permanent site in Greece for the Olympic
Games. Given the prestige attached to hosting the Games, however,
government and national Olympic committee support is
questionable. The International Olympic Committee, which has
considered this question often, seems no more favorably disposed
toward a permanent site than in the past.
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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. F- 7
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Malta's opposition Nationalist Party, pursuing its strategy of attacking
government policy through the courts, has finally succeeded in initiating a court
case that will test the constitutionality of the controversial Foreign Interference
Act (FIA).' The Nationalists persuaded Italian Christian Democratic Youth leader
Massimo Gorla to speak at a political rally on 23 February. Gorla was arrested,
but permitted to leave Malta after agreeing to return to face a charge of
addressing a public meeting without permission.
The Nationalists hope to gain power of attorney for Gorla and show that the FIA
violates the constitutional right to freedom of expression. Their timing is good
because a delegation from the Council of Europe (COE) plans to visit Malta this
month to investigate the human rights situation and the FIA in particular. If the
government drops the case or loses it, the FIA's effectiveness will be undermined.
Should the courts find Gorla guilty, the Nationalists could compound the
embarrassment by accusing the government of interfering in the judicial process.
Prime Minister Bonnici has predictably charged the Nationalists with provocation
and with exploiting Gorla for political purposes; he has also implied that the COE
should not interfere now since the case is presently "sub judice."
Budapest has been publicly warned by Moscow-albeit indirectly-to stop
quarreling with Romania and Czechoslovakia over the treatment of their sizable
Hungarian minorities. The January issue of a leading Soviet journal Modern and
Contemporary History inveighed against "bourgeois nationalism" and "remnants
of chauvinism" in Hungary but softpedaled the criticism by saying that the party
is trying to solve the problem. In fact, Budapest has traded polemics with
Bucharest over the minority issue since last fall. Hungarian-Czechoslovak
relations also have been troubled for months by Prague's imprisonment of a
Hungarian minority activist, whose release Budapest has reportedly sought.
The Hungarians are likely to tone down their media rhetoric temporarily in order
to avoid further Soviet displeasure. The problem probably will continue to fester,
however, because the Hungarian minorities are likely to continue to face prejudice
and hardline official policies. Moreover, the Hungarian regime has been courting
national feeling as a source of popular approval and is likely to remain sensitive to
public opinion on this emotional issue.
' The 1982 bill prohibits any "foreign activity" in Malta without permission of the Foreign Affairs
Ministry; it is intended to keep out of Malta any journalists or politicians who disagree with
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United Kingdom: Dealing With
the Miners' Strike
Prime Minister Thatcher won her battle with the
striking coal miners and their Marxist leader Arthur
Scargill when on 3 March the union voted to end the
nearly yearlong strike. Although the miners failed to
disrupt the economy significantly, the cost was
substantial in terms of lost foreign exchange earnings
and a higher budget deficit. The end of the strike is
not the end of Thatcher's problems, either with the
miners or with the, coal industry. She is also likely to
encounter renewed pressure to make Britain more
competitive.
Origins of the Miners' Strike
Elected on a pledge to boost industrial efficiency and
end Britain's long economic slide, the Thatcher
government tried to restructure the inefficient coal
industry as early as 1981 but abandoned the
attempt-apparently believing that it lacked enough
public support to tackle strenuous opposition by the
National Union of Mineworkers (NUM). The coal
industry's increasing financial deficits and production
surpluses have made the need for restructuring even
more clear. Over the past five years, losses by the
National Coal Board (NCB) have totaled $3.5 billion,
of which $3.3 billion was made up by grants from the
government.
In 1982 Thatcher chose as Chairman of the NCB Ian
MacGregor, who had implemented a sweeping
rationalization of British Steel Corporation (BSC)
during 1979-82. MacGregor immediately laid out a
plan to close 20 of the most unproductive coal pits and
eliminate 20,000 jobs over 12 months. Some of
MacGregor's critics, however, questioned his decision
to announce all the pit closures at once.
Arthur Scargill, the leader of the NUM, took the
position that no mine should be closed until exhausted
hydroelectricity
of coal. In response to MacGregor's plan, he first
orchestrated an overtime ban in November 1983 and
then called a nationwide strike on 12 March 1984.
Scargill refused to hold a strike vote, however,
probably because the miners had twice before voted
against a walkout. Partly for this reason, about 25
percent of the miners ignored his call, saying the
strike was illegal.
Secret
EUR ER 85-007
13 March 1985
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The National Union of Mineworkers
and Arthur Scargill
Although its membership has declined
dramatically-there are now fewer than 190,000 coal
miners, as compared with more than 1 million in the
1920s and 1930s-the NUM retains its reputation as
one of the most militant unions in a country noted for
the militancy of its labor movement. The NUM's
reputation was earned by its aggressive participation
in several major British strikes over more than half a
century. It sparked the general strike of 1926 and
continued to hold out for nine months after the other
unions had settled. In 1973-74 the coal miners staged
a strike that brought the entire economy to a
standstill and precipitated the defeat of the
Conservative government of Prime Minister Heath.
The NUM's aggressive stance has frequently won
wage increases far exceeding those of other unions.
In Arthur Scargill, the miners' union has found a
leader more than worthy of its militant tradition.
Scargill ascended through the ranks and became
NUM president in 1982. A charismatic leader, he is
perhaps best known for his radical political and
economic views. Scargill is viscerally opposed to
virtually every facet of Prime Minister Thatcher's
free market economic policies.
Whatever his motives in calling the strike, Scargill
demonstrated leadership by keeping it going for
nearly a year. Although there was a significant drift
back to work, almost 50 percent of the workers-
about 93,000-stuck with him for almost a year with
no strike pay and little hope of an early settlement.
Moreover, the NUM received only lukewarm support
from other unions.
The Government's Response
The government moved quickly to reduce the impact
of the strike by greatly increasing the use of oil-fired
power stations and by boosting coal imports.
Meanwhile, Thatcher took a backseat in MacGregor's
negotiations with Scargill, probably in hopes of
keeping the issue out of the political arena. The Coal
Board, in turn, refrained from using the powerful new
United Kingdom: Energy Status Million tons of coal
or coal equivalent
Mar-Nov
1983
Mar-Nov
1984
Percent
Change
Coal balance
Production
90.2
35.7
-60
Consumption
82.3
51.2
-38
5.1
0.9
-82
1983
1984
Total
59.8
37.8
-37
At power stations
33.3
15.3
-54
Other
26.5
22.5,
-15
Mar-Nov
1983
Mar-Nov
1984
Percent
Change
Fuel used to
generate electricity
Coal
- 43
Oil
460
Other
9
labor laws for fear of solidifying the miners' cause.
The court-ordered freeze of the union's funds came
about after its own members brought suit under the
new laws against an illegal nationwide strike.
The government made several efforts throughout the
strike to lure miners back to work. For example,
several thousand strikers went back to their jobs
before Christmas to receive special bonuses. The Coal
Board offered strikers only token cash bonuses of up
to $106 if they returned to work by 11 March after
evidently concluding that little more was needed to
maintain the back-to-work momentum.
The Immediate Impact of the Strike
The strike has hurt the economy. We estimate that
the foreign exchange cost-mostly in the form of
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forgone oil exports-was running at about a $5 billion
annual rate this winter. This, in turn, contributed to
the fall of the pound over the past year. Lost tax
revenue, police overtime, and the higher cost of
burning oil in power stations added an estimated $2.8
billion to the budget deficit. We believe the strike
shaved about 1 percentage point off GNP growth.
Aside from lower steel production and railway
shipments, the strike had very little effect on other
industries or on consumers. They did not lack energy
supplies, and taxes were not raised to offset the
increase in the budget deficit. Even electricity users
were not asked to pay for the higher cost of using
oil-estimated at $1.9 billion-although Cabinet
ministers are considering a one-time 20-percent
surcharge on electricity bills early this spring.
Despite the strike, London succeeded in bringing coal
supply and demand back into balance:
? The power industry had slashed its use of coal by
more than half by the end of last summer. Although
it probably did not match this figure during the
winter, when electricity demand is highest, an
average reduction of close to 50 percent seems
possible over the full year.
? Other industrial users reduced their coal
consumption by about 30 percent.
? London also cut coal exports by 82 percent and
boosted imports by 94 percent, bringing net imports
up to almost 1 million tons a month by last fall.
After a rapid drawdown earlier in the year, coal
stocks have stabilized at a comfortable level.
The economic impact of this strike is dramatically less
than in 1973-74 when the miners' walkout put British
industry on a three-day workweek:
? Nonstriking miners maintained a substantial level
of output-about 40 percent of normal at the end of
the strike, according to the Coal Board.
? As a result of the shift to coal-burning power
stations over the last decade, the country had a large
amount of idle oil-fired electricity-generating
capacity.
? Because of the surplus production of the previous
four years, coal stocks at the beginning of the strike
were exceptionally high.
Outlook
Now that the strike is over, Thatcher will no longer be
able to blame the strike or the unions for the country's
political and economic woes. There will still be some
residual problems with the miners in the next few
months. The government has refused amnesty to
miners fired during the strike for acts of violence, and
the national union has vowed to continue its overtime
ban until amnesty is secured. According to the US
Embassy in London, however, such confrontation
plays into the hands of those in the government who
want major cuts in the coal industry.
In addition, the end of the strike, so close to the
presentation of the budget on 19 March, may have
placed Thatcher in a difficult position by restoring
hopes of promised tax cuts and increased government
spending for social services. The Treasury no longer
faces the uncertainty surrounding the strike's costs in
its budget calculations, but, nonetheless, it has little
room to maneuver in meeting ambitious targets for
reducing the deficit. Higher welfare payments to
miners' families, strike-related losses of state-owned
British Steel and British Rail, in addition to
continuing expenses for police presence at the mines,
probably will continue to strain the government's
coffers for some time.
Thatcher undoubtedly views the end of the yearlong
miners' strike not only as a victory over that militant
union, but also as a step toward reducing the power of
all labor unions in Britain-which she sees as an
essential ingredient to long-term growth. The
successful outcome of the strike will be a spur to
Thatcher to continue with industrial restructuring-
perhaps in a more careful fashion than attempted in
the coal industry-to make the British economy more
competitive in world markets. It will also ease some
political pressure on her as a result of the decline of
the pound. The public undoubtedly views the Tories
as having won a decisive victory over the miners,
which, in the short term, is likely to boost Thatcher's
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United Kingdom: Dealing With the Coal Strike, 1980-84
Million metric tons at
an annual rate-
Faced with a sharp drop in coal
production ...
The United Kingdom has
reduced consumption ...
Power station
consumption
Other consumption
160 160
140 -A--7T -4j4
140
-i2O 1.20-
100-
40 ..... 40
__ _llmtuutluuiumilmutuflhlWI l,>limuu
0 1980 81 82 83 84
Feb
20 I__~m11111uumullmuuultlllnnulullum7l
1980 81 82 83 84
Feb
popularity. According to the latest polls, the Tories
are slightly behind the Labor Party, but this is
unlikely to last.
Over the longer term, the government is likely to use
its antiunion legislation to weaken the unions even
further. Thatcher did not invoke the law against the
miners to avoid making martyrs of them and thus
gain the sympathy of other unions and the majority of
the public that refused to support the strike. But,
given the public's antiunion mood, we expect the
government to resort to the law with more frequency
in the future. According to recent polls, the public is
in no mood for further confrontation, and Thatcher
probably will take this message seriously-for a while.
As for Scargill, he is likely to be challenged as leader
of the NUM since many miners are disillusioned after
striking for 'a year without victory. He probably will
survive the challenge; the miners still see Thatcher
and the Tories as the main enemy and most believe
that Scargill and their cause was right. More
important, the hardliners control the union, and they
While boosting coal imports and Bringing supply and demand
cutting exports ... back into balance.
Imports
IUII ~ itdmumu&i=uIbnUIi _._ Imwvi~uuuuuimmni>luumuu uuu
0 1980 81 82 83 84 -45 1980 81 82 83 84
Feb Feb
are unlikely to oust Scargill. Scargill currently is
looking for a scapegoat for his disastrous defeat and
has attacked the other trade unions, accusing them of
standing on the sidelines while the government
battered the union.
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Western Europe: Attitudes Toward
the Olympics
The Moscow and Los Angeles Olympic boycotts have
revived public speculation concerning a permanent
site in Greece for the Olympic Games. Given the
prestige attached to hosting the Games, however,
government and national Olympic committee support
is questionable. The International Olympic
Committee (IOC), which has considered this question
often, seems no more favorably disposed toward a
permanent site than in the past.
A Permanent Olympic Site?
US and Soviet boycotts, respectively, of the 1980 and
1984 Games-and Soviet Bloc threats against the
1988 Olympics in Seoul-have led some sportswriters
and politicians to propose that the IOC establish a
permanent site near ancient Olympia. Proponents
criticize the disputes surrounding current site
selection procedures and argue that a permanent site
would help remove politics from the Olympics. They
often claim that widespread public support exists for
permanent facilities in Greece.
A June 1984 Gallup Poll of public attitudes in 19
countries demonstrated that, except for Greece, the
United Kingdom, and the Netherlands, this may not
be the case. The Greek and Turkish positions on the
opposite end of this spectrum suggest that a
permanent Greek Olympic site would present political
problems relating to longstanding bilateral disputes.
The Turks probably believe that Athens, as the
permanent Olympic site, would permit the Greek
Government to repeat previous efforts to contrast
"Greek civilization" with alleged Turkish atrocities.
The Greeks used the 1896 Athens Olympics (the first
modern Olympic Games) to rally national feeling
against Turkish control over Crete. Nationalism also
was a major theme at the interim Games held in
Athens in 1906. Since then the Greeks have
periodically lobbied the IOC for a permanent award.
Greek Government manipulation of other sporting
events suggests that Athens would exploit the
Olympics in other ways. For example, in October
Question: Which would you prefer for future Olympic
Games-a permanent site in Greece or that the
Olympic Games continue to move from country to
country?
Continue To
Move
Permanent
Site
No Opinion
Canada
65
26
9
Italy
62
27
11
Austria
61
25
14
West Germany
61
37
2
Argentina
55
26
19
United States
54
37
9
Australia
53
41
6
Norway
52
34
14
Switzerland
50
33
17
Netherlands
45
45
10
Belgium
42
37
21
United Kingdom
41
52
7
91
1
1984 the Papandreou government renamed the annual
Athens marathon race in honor of Gregory
Lambrakis, described by the US Embassy in Athens
as a "far-left, anti-US peace leader" who was
assassinated by rightwing thugs in 1964.
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EUR ER 85-007
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Strong French and Italian public opposition to a
permanent site may reflect those governments' stated
interest in hosting the Olympics in the near future.
Paris is a main rival to Athens in the campaign for the
1996 Olympics. If this bid fails, the French are likely
to press to host the games scheduled for the 100th
anniversary of the first time Paris served as host to the
Olympics. Rome held the Games in 1960, and the
Italian Government periodically stresses its virtue as a
second "classical" site for international sport. Spanish
public opinion, not surveyed in the Gallup Poll, may
also be negatively disposed toward a permanent Greek
Olympic site, since Spain hopes to bring the 1992
Olympics to Barcelona.
Strong British public support for a permanent site
probably reflects the traditional claim that the United
Kingdom is the birthplace of pristine, apolitical
amateur sport. Other polls have demonstrated a
widespread British feeling that the politics of selecting
an Olympic site undermines the purity of the Olympic
Movement. Relatively strong support by the Dutch
public for a permanent site contrasts sharply with the
interest expressed by government and national
Olympic officials to bring the Games back to the
Netherlands (Amsterdam hosted the Olympics in
1928).
The Olympic View
The IOC, a polyglot organization of princes, bankers,
and Communist bureaucrats, has rejected many
earlier proposals for a permanent site in Greece.
Members have always been repelled by the ways
governments exploit the political content of
international sport. Nevertheless, they have also
recognized that choosing among competing Olympic
claimants is now the primary reason for the IOC's
existence' because national Olympic committees and
the international federations that control individual
sports long ago appropriated powers over team
selection, rulemaking, and even over the definition of
"amateur."
' Sites are chosen six years in advance of an Olympiad in order to
give the host time to prepare for what has become a complex
political and athletic festival. The winter Olympics has been
awarded se arately from the summer Games since World War II.
The committee has thus far shown no inclination to
accept the latest Greek appeal. Indeed, Juan Antonio
Samaranch, its current president, has followed the
example set by his predecessor, Lord Killanin, and
publicly admitted that politics has a permanent place
in Olympic sport. Monique Berlioux --the
committee's executive director and widely expected to
become its first female member has indicated that
members have put consideration of a permanent site
on the back burner until they award the 1992 winter
and summer Games next year. For now it seems
doubtful that members would be satisfied to sacrifice
the attention and favors derived from their current
role in site selection for the sake of permanent
Olympic facilities.
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Spain: Falling domestic demand prompted a 3.3-
percentage-point increase in the unemployment rate
last year to 21.7 percent ... a 5.5-percent decrease in
real unit labor costs in 1984, increasing profits in the
export sector, slower inflation, and the Socialist trade
union's agreement to reduce wage demands should
help stimulate investment and job creation this year
... not much improvement in the jobless rate likely,
however, because of demographic trends.
Bulgaria: Severe winter weather led to numerous
school and factory closings, cutbacks in rail service,
and blackouts ... Sofia has responded by re-creating
the Ministry of Power Supply and stressing
conservation.... The regime probably will place a
higher priority on completing new power plants,
developing domestic energy sources, and encouraging
energy efficiency.
Hungary: Budapest is considering loan swaps to earn
hard currency ... would buy Polish debt obligations
at hefty discount in return for new Western bank
loans to Hungary ... believes political ties give it an
edge collecting interest from Poland.
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March
Spain
April
Portugal
Looking Ahead
movement similar to those in West Germany and England.
Annual anti-NATO demonstration at Torrejon Air Base near Madrid on 24
March may be biggest turnout to date ... no indication of specific activities
directed against US/NATO facilities ... peace groups hope to establish strong
occasion to take swipes at Prime Minister Soares.
Eleventh anniversary of revolution of 25 April 1974 is likely to pass with little
fanfare ... Communists may organize marches or rallies to criticize government's
austerity program and pro-US foreign policy ... President Eanes may also use
government crisis.
Campaign for local elections on 12 May is in full swing ... Communists are
within striking distance of becoming plurality party ... outcome could trigger a
beneficiaries.
Most Belgian political parties will attempt to use the visit by Pope John Paul II on
18 May to boost their electoral chances ... religion, like language, is an important
factor in Belgian politics ... ruling Social Christians likely to be main
Secret
EUR ER 85-007
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