POSSIBLE DEVELOPMENTS IN SOVIET POLICY TOWARD AUSTRIA (ORE 28-49)

Created: 2/10/1949

OCR scan of the original document, errors are possible

POSSIBLE DEVELOPMENTS IN SOVIET POLICY TOWARD AUSTRIA

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POSSinLE DEVT^PMENTS IN SOVIET POLICY TOWARD AUSTRIA

SUMMARY

The major points of Soviet-Western disagreement concerning an Austrian treaty include: (a) Yugoslav territorial and reparation claims, (b) the lump sum to be paid by the Austrian Government to the USSR for German external assets returned to Austria, and (c) the amount and type of properties to be transferred to the USSR as German external assets.

While no speelAc supporting evidence is available, it is believedoreSoviet attitude might develop when Austrian treaty discussions are renewed in February. The following factors may prompt the Kremlin to adopt such an approach:

In view of Marshal Tito's break with the Cominform. the USSR may, in effect, withdraw Soviet support of the Yugoslav claims at the Big Four level, possibly bythat this problem be left to bilateral settlement between Austria and Yugoslavia.

In view of past Soviet exploitation of eastern Austria and the fact that further gains under present conditions are unlikely, the USSR may now be willingmaller lump sum for German assets than was originally demanded.

In spite of the grave risk Involved, the Kremlin may consider thatwithdrawal might improve chances of Communist infiltration Into Austria, leading to the establishmentew regime with greater Communist representation and power.

Achievement of an Austrian treaty could be used us thc basisenewed "peace campaign" by Soviet propagandists.

Even If the forthcoming discussions fail to produce an Austrian treaty. It is doubtful that thc USSR will resortlockade of Vienna similar to that of Berlin. Such action, while it would probably succeed in forcing the Western Powers and the Austrian Government from Vienna, wouldisk of war which the Kremlin Is not believed willing to assume at the present time. Furthermore, the resulting partition of Austria would be disadvantageous lo Soviet economic Interests.

Regardless of any tactical moves the Soviets may make with orreaty, their ultimate objective will continue to be the establishmentoviet-dominated government in Austria, and the integration of that country into the satellite political and economic bloc.

rioter The mtellietnee organlxaUoru of the Departments or State. Army. Mavy, and Uie Air Force hate concurred Ineport. The Information Rereir. is at ofanuary IHf

POSSIBLE DEVELOPMENTS DM SOVIET POLICY TOWARD AUSTRIA

It is believed that since the suspension of negotiations on the Austrian treaty In8 conditions have changed sufficiently toonciliatory attitude on the part of the Sovietistinct likelihood.oviet view it may now appear that advantages to be gained from continued occupation are outweighed by those that would accrue from the conclusionreaty.

When thc discussions on the Austrian treaty were last suspended, the delegates of the Four Powers had reached tentative agreementumber of articles of the draft treaty. The major points of disagreement were: (a) Yugoslav territorial and reparation claims, (b) the lump sum to be paid by the Austrian Government to the USSR for German external assets restored to Austria, and (c) the amount and type of properties to be turned over to the USSR as German external assets and theunder which they will be exploited. It Is believedore conciliatory attitude by the Kremlin may now develop, chiefly for the following reasons:

In view of the Tito-Comlnform rift, tbe USSR may now be willing to drop support of the Yugoslav claims. In order to strengthen its bargaining andposition, thc Soviet Union will probably support the Yugoslav claims Initially, but it may be expected to modify its position as negotiations progress, possibly by proposing that this problem be left to bilateral settlement between Austria and Yugoslavia. (The situation may, of course, be complicated by Soviet suspicionsS-Yugoslavnvolving economic concessions to Yugoslavia, and Sovietto give added impetus to Tito's pro-Western trend.)

With regard to the problem of German assets, inasmuch as the Soviethas already intensively exploited eastern Austrian economy and can expect little further gain under present conditions, it now may be willing to compromisemaller lump sum for German assets than that originally demanded. It mayfurlhermnre, that the economic rehabilitation of an Independent Austria could serveridge over which Western trade would pass to the East, therebythe potential of Soviet economy.

In spite of the grave risk involved of losing Austria completely, thc Kremlin may consideruadripartite withdrawal might improve chances of Communist infiltration into Austria and eventually lead to the establishmentew regime in which the Communists would have greater representation and power.

The achievementompromise on Austria would enable the Kremlin toew propaganda campaign in which it would try to prove its "peacegain emphasizing responsibility of the Western Air.es for the German impasse.

The USSR, however, will continue to press for restrictions on Austrian armament and limitations on the Austrian economy. It will also attempt to prevent theof an independent Austrian Government capable of dealing effectively with

Internal disorder and to press for extraterritorial status for those Soviet corporations which would accrue to the USSR in the treaty terras.

Regardless of any tactical moves the Soviets may make with orreaty, their ultimate objective will continue to be the establishmentoviet-dominated government in Austria, and thc Integration of that country into the satellite political and economic bloc. The real problem is the means of achieving this end, preferably, in this case, without resort to force.

Thus, as long as the possibility ofettlement on the Austrian treaty exists, the Kremlin will probably avoid any strong action which would disrupt the present quadripartite administration or the basic authority of the AustrianEven though no agreement were reached, however, lt is doubtful that thc USSR would decide upon partition of Austria, but would rather confine its activities toof Its hold on eastern Austria, increasing interference in internal affairs preferential to Soviet interests, delaying Austrian economic recovery, and more actively supporting the Austrian Communists.

A blockade of Vienna, similar to that ol Berlin,oviet capability and may not be entirely discounted. It is, however, considered unlikely.lockade would mean partition of Austria, withdrawal of the Austrian Government to the western zones, and probable withdrawal of the US, UK, and France from Vienna; It would imply denunciation of the Moscow Declaration oft would split Austria economically, probably to the benefit of the West, and would open the USSR to more severe UN censure than did the Berlin blockade. To offset such disadvantages, the USSR could hope for little more than somewhat diminished confidence among Western European nations in US protection with the possible consequent growth ofrather than cooperation in US defense plans; and slightly enhanced Soviet prestige among the Satellites. Finally, the Kremlin would be reluctant at this time to take the risk of war entailedlockade of Vienna.

SKGrTET

Original document.

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