SOVIET PREPARATIONS FOR THE CFM MEETING

Created: 5/20/1949

OCR scan of the original document, errors are possible

SOVIET PREPARATIONS FOR THE CFM MEETING

The Soviet decision to lift the Berlin blockade and ask for another meeting of the Council of Foreign Ministers was motivatedonsiderable degree by economicThis view has been further substantiated by the IS May offer of the USSR to resume reciprocal deliveries of wheat and timber from Soviet Zone Germany in return for reparations received from the western zones and by recent indications of increased Soviet Interest in expanding trade with the West It not only has become clear to the Kremlin that the economy of Soviet Zone Germany has sufferedonsequence of the western counter-blockade but, more important, that the economic development of the whole Soviet bloc has been hampered by the imposition of western export controls. It Is plain, for example, that those Soviet industries which are dependent upon western imports have made the poorest production records. Confronted with this situation, which stands in marked contrast to the growing economicand recovery of Western Europe, the USSR may try at the CFM meeting to get western concessions which will give economic relief beyond that offered by the lifting of the Berlin blockade.

Economic Aims Whether or not the USSR Is approaching the CFM sessions with the intention ofeneral accord wtth therimary Soviet aim will probably be to reduce existing East-West economic barriers. Apart from the adverse economic position of the Soviet blochole, the USSR needs western goods and credits to carry out its plans for domestic and Satellitedevelopment Although the USSR could not permit the Satellites to Join the European recovery program, the Kremlin

might seek financial aid for them through such agencies as the International Bank.

Weapon Against West urther aim of the USSR at the

CFM meeting may be to gain certain economic weapons which can be used against the West. The Kremlin may estimate that an economically revived Germany would inevitably gravitate eastward, particularly in view of the fear of western European countries concerning German competition and of tbe Insatiable demand of the Soviet bloc for capital goods. The USSR may also hope bytronger voice ln Gorman affairs to reduce Germany's key contribution to the European recovery program and tofull economic integration of Germany into the western economic bloc. Moreover, the Kremlin may try to prevent the application of western export controls to Germany, thereby makinghannel by which the Soviet bloc can obtain western goods now dented to It

Political Maneuvering ddition to the economicbefore the USSR In preparing for the CFM meeting, tho Kremlin Is concerned with political aspects and is intensifying Us propaganda efforts to lay the groundwork for political unification of Germany on Soviet terms. Soviet-Inspired pronouncements have stressed the need for cooperation and discussion between such German political organizations as the German Economic Commission (DWK) and the German People's Council in the Soviet zone and the Bonn Parliamentary Council and the Bizonal Economic Council tn the western zones. Soviet advocacy of such coopera -tion between German political leaders mayoviet proposal before the CFM for the formal fusion of theseaa the basisnified German government. The Kremlin is also using the recent German People'selections to advance the theme of German polilical

SEdRET

unity. Despite the adverse results of these elections from the Soviet view (official returns admittedf the vote was against the Communist -backed singleoviet-controlled propaganda will undoubtedly continue to ball the resultsmandate" to the occupying powers for peace, German unity, and troop withdrawal and to claim that the election results should beair cross-section of all German opinion. Meanwhile, the heavyvote will stimulate nationalist aspirations throughout Germany and raise the hope In the German people that unification can be achieved without Soviet domination. The USSR Is likely to encourage these hopes so long as it believes it can control east German representatives. In west Germany the rank and file in the non-Communist parties will be more Interested in the establishment of closer relations with the remnants of their corresponding east zone party branches. Western conservative leaders may become less cautious in their contacts wtth potentially Soviet -controlledfrom the eastern zone. German Socialist leaders, on the other hand, will remain skeptical of the opportunities for political unity.