79
DITiaLIuTJCE lETOI&XM
Satellite Relatione with tho USSR andoi
?7io BGperation of any CorYjiforinm tho SovietrblA Is unljicdly undrrr curront conditions,, a-qiUAtjilfl to thoao ubicl; onoblod Tito aracecsfully to chclloniT. Soviet ooarlrntion lndo notin She other Satelllton. By tho 'Irflatic renndlnj. ncnauren to uhloh It Hon resorted, tho Ki-etalln hai Indicated Ite nuaro-norn ofeve danccra to ita control of Eantern Europe inherent in catnllite not io ml ion.
The Coninfoin Satellites can be expected toaaieallynl3tlc po?ley toward tho OS reflcctlnc that of the Soviet Union. Any relaxation of satellite antnconlsa touord the OS wouldenqwrery tac'ilc rxitivntcd by opportuniotlo connidoretlonfl0
hift in tiio Xofpulav a'.vltndi tofjavd the DScrod n TOtivcc of eolf-rTCPorvation boforv- the iwunSinf" prarxiirci ficon tha Sov'rii bloc Ikmovov, irhc contlnnaOofn US Gupr-eirt.
ttrtoi Thish not boon ccordlnatel volth the JjiteJlirjericci organization" cf tinof State, Ai-iv,na Bio All* Fci'cci,
APPROVin FOR IDittl UIEIBHllll
aroiustSoviot Union will probably resultnidueljor Innrovnd Yugoslav attitude toward the
Appro:tlBfttelyeroeiit of tho populations within tho Satellites ore hoBtllo to the Conauniot regimes lapoaoi on then. Although opposition elements in the various Satellitesajority of tho population,asurcfl einec; at flepnrotine thost and destroying Lhcdr organi-zfttlon and lesdfrrohipv render such elements ineffective as opponent': to Ceesooniot ilcainotion of San tore Europe.
Local Cosmauilnt control over tho satellite peoples lo exoroijod through tho traditional Coaouidst inctrumnto which Includo tho Portys security organs, aiid tho nnwd forces. In addition, euipBidiary political, cultural, and economic organisations are used to disconlnate Cowcnint
The preoonoo or cva liability of Soviet rrU-ltery riight in the Satellites ccnotitutos the mat potent factor in MaintainingCocnuniot regimes in power, Tho various Coomoist portion under tho ImsJiate direction &rd control at reliable Soviet agents, forn the chief vehicles by which the coviotlzritlon of Eastern Europe in bolng stalled out. Tho entire political, nil it cry, cconoalo Ufa of the Sntelllttia is boing geared to tho lrv-plotventation of Soviot ciusight Kremlin control. In none Instances, tho Soviet BttaMB* Itself servos as tho rutin cocccanrl clioiinol botiaion tho Krenlln ami tlte satellitein others,trustod local Corsaaiists havo direct access to Masoov.
BElIASt DATE:1
Tho iisr.it has alreadya hlfih da/-rea of ccoivinic control over tho Sato31itoa, One of tho najor pointa of Soviet vulnerability, hoimvar, ici ihe subordination of satellite eoonoiaio uelfare to Soviet interest* oioerablo popular reaontrwnt, even in Ooiitunint. cirolfeo, has rpculted fromorceful trnnsforoation of tho economic structure of I'asfcem Europe, the iowerefi standard of living, ond tlio failure of the CSSR to nook the inii'ntrial rcqulretRooto of the Satellites. Thus for, however, Soviot political ond cconorvic control baa been sufficient to prevent effoctivo notionalist dcvlatiou froia Kremlin authority, Ifeanvliile, the K> export control progran imo* contributed substantially to olouinc the rate of eoonoiTio dovelopment in tho Satellites and has added to the strain in present Soviet-Satellite relations o
APPROVED FOR RELEASE DATE:1
1. scope'MN of-
The Soviot Union hna attained ita domination of Fostern Europe through the nethodlenl uoe of multiple instruments of control ond intimidation. Tho preeonco or availability of Soviet Military mlpht ln thoassive but potent factor in imlntnininc the satellite rsgunas in power. The various eotolllbH Conmuniflt pcrtlcs, thessolves directed and controlled by reliahlonts, fore tho ohiei vehicle by which oovietl zot.ion is beinp Imposed on tho Eaoteru European Ty>pulntlonfln Ah in tho Soviot union, each doo Conauniot party hasand not/ wholly dominates thoand oocurlty forceso In rjoae casec, tho Soviet aabasay servesonmond dhnnnel betveen IV>3cov and tho satelllto cnpltrls; in others, trusted local Communists appear to liave direct access to Mjccou, In addition, Butem Europe has been thoroughly penetrated by Soviet sooret police who operate Independently but exercise control over the satellite polioe, IJuraorouo Soviet "technicalopoolally for the satellite ami en end oconorde enterprises, are permanently otationed In the Satellites> while nany inspootors from the 9SSR cireuiato throughout Eastern Europe to control end report on looal conditions. With the erovina uationalization ofd cennordlal onterprlsos throu^iout the Satellites, the econonlo life of Eentorn Europe has been Incr-anincly subjected to'Soviot direction and control3. tn. tho Council ofunl Kconosdc Assistance was created vith thc purpose of ultinately intecrotinc the satellite economy vith thst of tho
fttthooghwthaflj of Soviet control ToUoure pr.ttcrn In oil*:v.aricia fi-cr. country toiicii Swiufc ccatrol la nore tlxwoush in thouia,cu2arly Rii-itinlnlc.-nrlh, than In tticrocltionn peater. atopri am aw hoinnochoalo'Jiucift to "nrinj;ountry mov slntZsrly siciot Scvlot vi'ti-mtion of, ui-Joh 'nil traditionally evidenced its Btronrgtoward tho UEU3-Ulll protalily confront the freriLin villi Its cove-vest
hocul Con^inJnt control over the tintcllito neopleiacr-rclfedfrradl'.'onsliMtnevmts .Mch include th? Forty, theiuvI tbe Amy- olitienl, onflas -jell cc allla of men cccrsinlcation, areSir IfrjUMtJiilu to ertrnd their InflvencQ over tho poople. To entin- ontiro population of Eaotortl rurope lo being inpreoaed Intoor the "eonstr-JcMcn of socialisTi." averouf-ht under thethe CoirruJiista to servo asevtrr of control. Thear-v. hoe tec^ne. therefore,e naively isolated fronand conulotaly oubJoot-Nl to bncuiilatd In view of this Corcurdptn over all aspects ofthcro lo little cp-Tortunlty for anynlr.od reoJatnnco totjie feethe popuJ--tionn inrc opoenexl toCornunist
3 - PttieftUll gf CaWilYrifTf' RPgeflfgi
The attitude of tlie Ccctfrunlst reeinea in tho antollitsa ia eacpectod to mmin tnatoally oiitaeonistle tounrdhus reflestlDg the attitude of the Soviet Onion, uhich nowhe. OS ca the leoiline obetaele to its eoqxuisionist nino. Any relaxation of thlij policycraporary una purely for' opportunistic reasons. Tirus tin- nore industoieliaed Satellites, sueh as Poland and Csaehonlovajcia, nay continue their ottanpta to tMfnm oconccrdo relations uith the US ino acquire vital industrial cpolp--teat unobtainable in tlie Soviet orbit.
Jugoslavia* on the other bandp lias olroacfyortnin extent tenporoc' its past hootility toward the US. This nodification of Yugoslavia's attitude stons fron the realisation that Tugoolaviii Is isolated from the Soviot bloe and IncreojLngly depnoucnt upon OS econoniolltary aid. The -change In tactics toward the US, therefore, io 'mead or rotives o" self-prcoor*ation before nountlnj;fron tho Soviot Tho Titoll probably graduallyoro friendly attitude toward the US as It contiimoc to roly on US support to no into in its Irrici
4. Thg VTUner^VUJtT gj tho SfttfUJ-fre. StateaMtJgn.froaett&iiV
The extent of direct Soviot control over tho Satellites and the in-otruoonts of bout in ths honda of tha iiatelllte Cormur&nt parties ellnlnato the poGslLUity that oLy Satellite ln Uh noar future een separated tkxm the Soviet Union byhort of war.et of oonditiono conparahlo to thoso which brcruf-ht about Tucoolavio's suocesFful revolt fron rrenlln
1 relusf1
domination does not exist In any other Satellite, 'tone- of the Conlnfora aatolllte partieselatively popular leadersuch aaevoted party and aUitary folloying. Kith the .reception of Albania, the Setcllitea lack thc exposedposition of Yugoslivia vhich has afforded Tito access to the Iteat,
rojdmtflyerosni of .hethin the various. Satellites are hostilo to tho Coanundstosed or then* the olaua.t; neJclnc up this anti-Comunist aajority have actively opposed thoonly when directly attached. Thus, tiisirst turned their efforts to the successful ellrinstloG of organized underground groups end antl-Cominist political pnrtlas. Jbre recently, the Conomiste have dirooted their attacks against the'various religious organizationsthe nuclous for regaining enti-^onnunist opposition. Tho Orthodox Church, mainly represented in the Balkans, succumbod and isubservient Cocpunlst instranent. ThereglTCs in the HOT them Satellites are now carryingelentless ctrp&ign to neutralize the powerfulof the Catholic Church* Ilert on the Cocnunict timetable will
e the peasants, uhose ontl-Coraiaiiiet stand has thus farwidespread colleativication of agriculture. Conraaiist efforts,te- the opposition elcconts and destroy^their organization andoneine jhace-aAuaJnade it possible for the Corcuniste toa population nredoninartlv ant
Ifcnrerthelena, certain ueaknecsea do exist in varying decrees through-out tho Satellites, which If proporly exploited, night, ln tho long ran, enable at leant ooro of tho Soec to throw off tho KronlinChief aoong these la the oti-ong uiiJorcur-c'it of nationalicQ, extending even to ncny CkvruniBt party nenbors, which bsa boon caused hy roeenb-aent against tha enforcedIflili of tttlonol to Soviet int-roota-Mith the Tito lesoon in rdnd, they its tridewpveed purges ofiriies, fctt indicated tact it fully appreciates the eVngcrs inherent in natlotwJlsn., nbuever, tho bunlc pro hi on rerninond ruthless Soviot exploitation of its Satellites, which resulted In Tito's defection, will continue to augment nationalist dlsoontont throiigh-out tbe area.
Of the Satellites, Albania, by virtue of its isolated geographical position end the relative instability of tho present regine. Is roost susooptlble to defootlon. Poland, withercent of its population, devoutly Catholic, and with thenatlonollan of the Polish people evident oven In the highest councils of the Cocsr^st Party's leadership, Bipht well prove the hnrdmttfor ttosoci* to digest. On the other side of the scale, Rirairtn,Soviot control la virtually conplete, la considered loaot able under pre*jont conditions to break svoj from Its Kremlin maters,.
tPPROVtl flMELUSI WTfclHItll
Albania-
Tha USSR appesre capable of maintaining effective control over Albania
in the course of the next several months. Because of the impoverished economic circumtancee of the Albanian people and the hostility of the freedom-loving Albanian mountaineerarsh Connunlat regime,ereent of tha population is disaffected and ripe for collaboration with any atti-Hoxha moveiaent. However, ln the. absence of unity among the anti-Itoxha elezionts, real stance aoounts to no wore than sporadic sabotage and subversion and overthrow of theregime is considered unlikely. Meanwhile the USSR hue extended Its oontrol over all phases or Albanian lifereater degree than in the othernd the formation of an anti-Soviet element within the Albanian Coanunifit Party is jnprobablo. Refugee ant1-Hoxha elenento concentrated in Yugoslavia, Italy, Egypt, and Greece, coeipriao both pro-Tito Coesninlste andhese groupsoerhined aenbershlp ofnd naintain llalaon with cells ln various parts of the country- However, the extent or their influenceAlbania is probably emll under present conditions. Bulgaria -
The USSR can probably loalntaln and even extend Its control over Bulgaria despite the powerful force of Bulgarian nationalisa,. The snail inner circle of Bulgarian tkwreunlets dominating the nation ia absolutely rasponoive to
APPROViD FDR RELEASE
Kremlin directives. Below thiolJ-ruo tho Coiaxunlst Party ie
on the question of subservience to Moooow, and constant Soviet vigilance will
T
bo roquired to prevent the growth of effective resistance to the Soviet
Onion from within the party. The Kremlin's success thus far in liquidating
potential opponents suggoots, hoaavor, that it will continue to be
successful in dominating the Bulgarian Communist Party, and through it the
Bulgarian nation. No organized political opposition to the Communists is
political
known ln Bulgaria. The Agrarian Union Is the only non-Conmunlst/party still in existence and is retained merelyymbol of peasant participation in tho government in order to facilitate the eventual collectivization of agriculture. Approximatelyercent of the total populationillion opposes tho reglsa, but this opposition lacks effective organization. Such active resistance as there is manifests itoolf In sporadic subversive and sabotage efforts. The only Church which does not actively espouse the-governmenVs program is the Horaan Catholic, but its influence lo .insignificant. Czachoslova'-u1
Czechoslovakia is not believed tc be vulnerable to detachment from Soviet domination- On the other hand, Soviet control tends to be undermined by the basic conflict between Czechoslovak national interests and the alms of Sovftt imperialism in Czechoslovakia, as"well aa by the widespread oppositionistorically pro-Wostern damocratic peopleoviet-Imposed police state* In this content, actual and potential opposition elementshe Soman Catholichemiddlearge
APPROVED FOR RELEASE
portion of the Czechoslovak Communist Party composed of idealisWE:flB*MMie
SECTE
prooar period und opportunists who have joined the party since the8) numerous non-Communist government officials still retained by the Communists for their technical knowledge;he underground. Ihe peasants are now on the whole apathetic but will join the activewhen collectivization is begun in earnest.. Labor is becoming increasingly restive as its standard of living declines and it finds itself controlled by the Communists Both the Catholic Church and the middle class are at present under concentrated Communist attack with the object oftheir influence and capabilities^ The underground has little Influence, having been disorganized by increasingly stringent security measures, Nationalism within the Communist Party, however,erious problem for the regime*
This opposition poses continuing but not crucial problems for Soviet control of the country The Soviet Union, through the Czechoslovak Communist Party, gives every indication of its determination and ability to maintain
its power position ln the country- Meanwhile, actual and potential elements opposing the Kremlin's tightening grip on Czechoslovakia are being relentlessly sought out and destroyed. Hungary,
Tho USSR can retain its hold on Hungary under current conditions, despite the faot that Hungarians are non-Slav, non-Orthodox, strongly nationalistic.
individualistic, and intensely rollgious. Since world ^ar II, WBdUH?0OI antagonism haa beon aggravatedhe excesses of the Sed Army military
uperImposition of the Communistoviet economic) anti-Catholic parneoution;solation from the West One of the greatest liabilities from the Sovietis the strong feeling of nationalism, even among Communist Party members, urther Soviet weakness in Hungary la the very rigidity with which thety exercises its control. Dm party, and consequently its control over the notion, is weakened by the constant conflicts among the mamberu of the party hierarchy which are provoked by desire for power or by differences over sovietizatlon methods and tempos In addition, theof the party rank-and-file, which includes opportuni&ts and former Nazis,ajor threat to the Soviet masters
Nevertheless, there Is little ilkolihood that Hungary, exceptesult of war, will break away from the OSSB. The Hungarians with traditional passivity are currently awaiting liberation by the OS,. This submlsslvenesb is heightened by the knowledge that Hungary borders on the USSR and that Soviet troops are still present In tho country. Furthermore, them is no major organized roslstance movement in Hungary Many of the real democrata, who had engaged In entl-Hasi activities, were killed. Imprisoned or forced to flee the country during the Kail occupation This left few people of courag8 and democratic convictions to organise an anti-Communist underground Although scattered resistance groups may existoomr. operating independently and others connected with emigre organizations or HffttrW'WOttllASf
DBI! juh ?ddi
Mb <te>sosq- ^
groups ln Polond and Czechoslovakiait is Impossible to estimate the extent and cohesion of the Hungarian underground movement.
Ninety percent of Hungary's population is estimated to be non-Communist, but It Is Incapable of exercising Independent political action. The major non-Communlat factionsopposition political parties, the Church, and the capitalist and land-owning elementsare all being gradually eliminated, and the non-Coimnunist political parties have loot all semblance of The effectiveness of the Catholic Church as an opposition force has been sharply reduced and ln order to survive even temporarily the Church sill be forced to relinquish all but the most basic religious functions However,piritual anti-CommvuilBt force tho Roman Catholic Chnreh will probablyallying point for anti-Communist HungariansPoland.
The USSR la believed to he capable of retaining its control over Poland, although itontinuing problem in the unquenchable nationalism of tho Polish people which is evident even in the highest councils of tho Communiat Party's leadership, andontinuing threat to this control. Polish nationalism weakens the USSR'e hold on Polandessening the absolute reliability of native Polish Communist leaders in following Soviet dictates;ntensifying Poland's traditional nationalistic antagonism toward Czechoslovakia and Germany, thus hindering Soviet efforts to integrate the Polish economy with those of Czechoslovakia and %tfriWQ
MTE:JUM10DI
Ji
mam
The uncoordinated anti-Communist groups scattered throughout Poland boar little resemblance to the once-flourishing underground The underground movement in Polandembership nunbersd in the thousands, is largely pass Wo and maintains United connections mlth the other Satellites and the (Test, The Ukrainian Partisan Arm; is engaged in limited terroristic acts in aoutheaetorn Poland near the Polish-Soviet frontier The oize of its membership is unknown. The Roman Catholic Church In Polandtrong Ideological rallying point for anti-Communist resistance aith aboutercent of the Polish population members of the Catholic Church Out of an estimated total population ofillion, the Polish Communist Partyembership> million.. Tho remainder of the population is non-Communist, comprised primarily.of peasantsoonetitute two-thirds of tha total population and are by nature extremsly Individualistic and Independent. Rumania.
The present trend toward complete Soviet domination of Rumania is expected to continue, Tho Rumanian Cocmunlat regime will continue to tighten its control over the people, bringing the country over closer toward Incorporation ln the USSR. Defection of the Tito type is unlikely, primarily because of ample Soviet military strength In the eountry. Although individual officials and Communist Party meafcoro may have to be replaced occasionally, such nationalistic deviationism as exists cannot
a threat to the stability of tha pro-Soviet regime
> 1
The historic political adaptability of the Rumanians probably explains their reaction to current Soviet domination, ifogt fiuoanlanj live for the
day when tho Soviet domination no longer oxists and present Rumanian loadera are liquidated. Tho Rumanian people, hoaever, are incapable of taking action to subvert tho regime, their attitude being one of hostile inertia. The National Liberal and tho Independent Social Democratlo parties are aubveraiva to Goaniniat demands and other opposition parties have been
destroyed. The churches do notajor deterrent to Communist control, the Roman Catholic, folates, and anti-Coammlst Orthodox clergymen having bean subjugated.
There are no indications tnat nn effective illegal reslstanoe exists or is being developed. Small-scale and apparently spontaneous outbreaks do occur, however, presumably prompted by dissatisfaction aith working conditions. The impending collectivisation of agricultureide scale may also provoke peasant resistance. Under present conditions, however, coordination of the various email opposition groups and their development Into an organized resistance cannot be affected.
FOHAEliAS!
RFPHOVtBIORI UTE IIH2MI
BKH
t
Present "ceramic Relations hetwpnn Satellites and USSR.
Tbe Irnediate objective of the Soviet Union ln Its economic relations
with the Satellites lo to enlarge Its war potential by directly utilising and expanding the Industrial capacity of its eastern bloc. Tbe first stop la tho coordination of the satellite ooonomiey with tiiat of tho US3R> and accordingly the Council for Economic MftOBl Assistance (cea) vac founded In Moscow in This Soviot-dc*ilnnl.od organisation includes Albania, Bulgaria,ungary, Czocboslc-'ckla, and Poland. Officially CEItt is to begin operation inowever,It bfui already begun to ooordinato the econonic plans of tho satellite area by controlling production in certain areas, directing foreign trudo end finDcco, and allocating materials and technical knowledge. The blcofs foreign trade network has boon closely kniteries of bilateral trade agreements. Similarly, tha Satellites ere pooling tholr dwindling foreign exchange resources, thus poralttlng their more effective utilization.
olume of trade among the six Fins torn "nropoon states has inoroafiedercent Thn present volume Gceornts for ono-holf of tho total foreign trade of Pasterns coGipnrbd'withercent before the var. Exports from those countries Le tho BSSP, however, hnvo Increased tenfold and Imports huve ricestlmto over8 levels. Because prewnr Soviet trods with these countries was Insignificant, those striking percentage rises do not represent comparative increases ln volume, tfore revealing is tho nature of the corrx>dltles now being exchanged
| exchanged APPROVEOfORIItllASt DATE:1
between tho ontnlltto orwi and tho USSR- Soviot shipments comprise capital goods and raw uatarialo, some of which are need for proceasing into finlnhod mnufacturoo for re-export to the Soviot Union. The Sntollitea chiefly Ihiogary, CseeitoslovafcLs, and Pol? id, ship tho IBSR other induotrial pror'iwto, as volllcvltitrnl itema,. Vims, the Oovlet-^utollite trade pattern in radically different froa -irewnr years uhon agricultural products und induatrinl raw natoxiol- uarfl tbe chief co^iaoditioBDespito increased exchange in induotrirj. jro-lucta, lioucvcr, tho orbitill largely dependent for these Items on imports frco the EEA coimtrles and the US,
Soviet controT over carrainijwd Eastern Furopeeatod alnoot every oogaient of the economy. It is most mnifest In tho joint companies eatohyolxd ln Hungary, Rumania, and Bdgaria. Supervision of the aatellite tmnsportation system, standardization of Industrial oquipnont, the pooling of production nothods and scientific skills, and tho closely airporviaod allocation of scarceerieln are ell executed either by CKJ3i,ominforn, or liiroctly by the Kremlin. Its reparations dorands on aovorel of the Satellites provides the USSR with another opportunity forhe Industrial output of Eastern toirope.
Tlic strongtli ofeconorde ties istent to which tha industrial capacity of Pastern Europe isSoviot interost. At present thc USSR accountsajor pert offoreign trade. Soviet approval lo often required before the.
Satellites nay conclude trade paots with iion-Corrnmlet nations* Credit and connodity loans have been nade by the USSR without which tho output of nony satellite Industries would be curtailed. The satellite eoonoaio organizations have now boon oodolled after that of the USSR, thus facilitating the exercise of Soviet diecipliwry controls over sotolllto produotlon plans and foraihg the Sctollltos to depond upon Soviet tuehnloal, administrative, and scientific tliUflfnlfjii
Soviet influonoo lo also evident in the field of finance. redit policy aro coordLrted among the satellite states on the one hand and with the USSR on tho other. Preliminary steps are probably underway toucrd tho creationhlch would facilitate tho balance of payments among tho Satellites and tho USSR.
Despite the rapid growth of Sovlct-Sntelllte trade and the strength of Soviet eontrol over tho satellite economies, there arc several polnto of vulnerability in Sovlot-Setelllte economic relations, nationalist re-aentacnt in tho Satellites over Soviet dictation in econonlo natters lo perhaps the greatest potential obstacle to conploto Integration of tbe Sovlot-flotelllte economies. Other difficulties have arisenesult oft (l) the strain caused by forceful transformation of the economic structure of the Eastern Europeanho excessive demands on labor productivity coupledowered stendord of living cjvI burdensomehe follure of theto fulfill promptly and in sufficient quantities and types tho essential Industrial requirements of tho) Soviot
R KELEASE UTLIIHIMI
sost-jt^:
attenpte to inpoce ngrleidturel eolloctivlyc.tiontubborn peasantry;he subordination of satellite economic uelfhre to Soviet interest. Although these weaknesses oxlst at prosont,they do noterious threat to Soviet domination In view of the strong political and eoonocdo controls exoroiood by the Kremlin- These points ofhowever, are susceptible to exploitation by the Meat andontinuing source of strain in Soviet-Satellite eaonomlo
DATE IIH rill
6. Present Economic Relations between tha Satellites and Western Europe, and Other Mcaj CoffnV'1 'I 'l1
Economically, the satellite area and Western Europe are fiomplamontary. Eastern Europe supplies foodstuffs, fuel, and some primary producto in return
for Western European finished industrial products, items of light and heavy
industry* and particularly precision instruments and replacement parts.
Sinoe World War II,R has replaced Gorman? an Eastern Europe's chief trade partner, and Eastern Germany is producing for the Soviet orbit-Western Germany will undoubtedly play an increasingly Important role in trade with Eaotorn Europe, but cannot regain ita prewar position.
Trade betasen Eastern and Western Europe is now only approximately half
the prewar level. In addition to being the result of the onforcod orientation
of satellite trade toward the USSR, the low level of haat-Wsst trade has atemsedho incomplete recovery of agriculture production In
Easterneavy demands for recovery in Astern Europe and the lack
of exportableestern export, controls on certain comr-odities;
i
he absence of credit or other means of finanolng Imports to Eastern
Europe;he widespread adoption or bilateral agreements.
Despite these barriers to an improvement Lit East-West economic relations,
the volume of East-West trade may gradually increase. Eastern Europe's
agricultural production will probably reach prewar levela by
he watellitoo all desire an incrcoso in trador*or to obtain industrial goods presently in short supply or unobtainable in the
/
Soviet orbit, moreover. Increased production in *ftstern Europe will atlnulate the search for additional markets. ecisive factor affecting future East-West trade will be whether the KCA nations) (l) -ill: toko
effective parallel aotlon with the DS in Implementing export controls;n visa of mounting competition in world narketa will ivtteiipt to find outlets ln Eastern Europe for their industrial output, itcnirdlnss or Western Europe's attitude, however, the Satellites will still face nvmerous difficulties in their effort to expand East-fleet trade. Tie shortage of foreign exchange and lack of credit facilities willontinuing woblen and the satellites will havs increasing difficulty in finding markets fer their raw BBtorlals (for oxast'le, Polish coal) in the faceowing world availability of tl.esend the decline In world prices. bstacles can only partially be overcome through state control over foreign trado, financial manipulation and t'.io adoption of such unfair ti-adeumping and clandestine operations.
7. Present Kconoiflc Relations between the Satellitess.
Trado betueen the satellite states and the US has declined tonew 1cm, despite pressing satellite needs for industrial equipment, replacement partst precision instruments, industrial raw materials, and technical knowledge, US export controls and denial of financial assistance are largely responsible for this lack of trade, which has also been caused by such factors as the satellite dollar ev-hangc shortage, lack of exportable items desired by the US, unsettled questions of nationalization of US property, and thenTutWllV^ conducting trade 'through State monopoly channels. The denial of strategic items
has contributed to the reduction of production goals throughout the satellite ares, and has tended to intensify the strained relations within tho Scviet orbit.
Even if export controls were eliminated, however. Eastern Europe nould not have sufficient exportable surpluses to balance tho cost of imports from the US. Thus, these countries would require considerable US financialtanco in the form of long-term credits, similar to those now boing granted to Yugoslavia* Such aid would result ln inoreaaod trade and wouldharp upswing in satellite production, and, finally, on improvement in tho relatively low standard of living.in Eastern Europe. However, as long ac the
USSR continuos to exercise its economic control ever the Satellites, any OS aid would accrue primarily to Soviet rather than satellite advantage. Tlais, onlyatellite can successfully defect from Soviet domination will
there ba any prospectarked improvement in economic relations with tho
05,
tfprmlfiriuuse date:un fill
Original document.
Comment about this article, ask questions, or add new information about this topic: