Created: 4/7/1981

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POLAND: Martial Law Under Consideration

The Polish Goixlmoit ic attempting toeetiosupport for the poseihlc imyoeitior. of martial lav and wonts parliament to make the decision--probably at ite scheduled seeeion onhaa encountered opposition to the plan. Prime Minister Jaruselski hae pledged to drop the idea if it faili to get sufficient backing but may feel compelled to take someto blunt Soviet pressures. Uareav Pact military activity in and around Poland, meanwhile, remaineigh level, but we have detected no new movement of Soviet units into the country.

Jaruzelski reportedly is seeking support from the Church and parliamentlan, approved by party leader Kania, that would grant hie special powers.m

the planllow the Prime Minister to replace all civilian governors with militaryurge the party leadership, and take action against dissidents and extremists in |flBBBBBBB| ^Hfe

We find it plausible that Jaruzelski would try to get broad political support for martial law, especially from the Church, but find it less credible that he would be allowed to meddle in party affairs. The Soviets would not endorse what would amount to military control over the party. We also doubt that he would take precipitous action against Solidarity that would provoke the kind of confrontation he has been trying to avoid.

The postponement of thesession until this Friday suggestsaruselski may have run into difficultiea jetting support for his plan. Son* In the Polish party leadership have warned him that this plan would only leadonfrontation that the Polish aaourity services could not handle end provide the pro-toxt for possible Soviet Intervention.

We cannot exclude the possibility that, because of in ten so Soviet pressure, Jaruzelski and Kania will go ahead with some kind of martial law plan without gaining th* full domestic politioal backing they are seeking. They couldorm of martial law in which the

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government does not initiate sny arrests, but makes them only in response to strike action by dissidents and Solidarity activists. Evenraaure would stillubstantial ilsk ot provoking awith Solidarity which could leadoviet.

Husak's Hard Line

Czechoslovak party leader Husak's opening speoch to the party congress yesterday included his toughestyet of th* Polish situation. For th* first time, Husak compared the situation to other periods of crisis in Eastern Europe, invoked the Brezhnev doctrine, and failed to express any confidence ln the ability of the Polish party to handle tho situation. Husak hadleft these themes to hardliners and thepress. We expect Soviet Prosldent Brezhnev to address tho congress today. flJHJ

Military Situation

Warsaw Pact military activity in and around Poland


Bank Meeting in London

Polish officials asked Western bankers meeting in London last week to overlook missed payments until acan be worked out. The Poles requested that principal payments falling due betweenarch andune be deferred for six months. These payments would then be consolidated in the amounts to be The Poles agreed to meet their interest payments and to pay interest monthly on the rolled-over maturities. Although the banks made no commitments, they agreed to recommend that other banks in their respective countries go along. I

Despite the somewhat optimistic reports from the meeting, the bankers and Polish officials still fearank may take legal action andormal default. The widespread expectation that the USSR would come to Poland's financial rescue, moreover, was dousedolish statement that no more Soviet funds would be available until at least late this year.

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