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National Intelligence Bulletin
PORTUGAL
The Indecisive results of Portugal's legislative election on Sunday heve left open many option, for the formation of the next government. Political leaders are already maneuveringolt.
The imaileY-than<*pected swing to therobably traceable to reduced voter turnout and the Communist Party's success In holding on to most of5 percent of the vote received In the constituent assembly election last year hy the Portuguese Democraticommunist front that wet not on the ballot
this time.
Socialistslurallty-they receivedercent of the vote, es compared toercent for their nearest rival, the Popularoalition excluding them would not be feasible. The Socialists, thus, will come under heavy pressure from all sides In the two months before the presidential election and the installationew government.
Popular Democratic Party Secretary General Sa Carneiro and Social Democratic Center leader Freitasave already called on Socialist letter Mario Soares to Join themovernment coalition. Soares rejected their appeals, but press reports say other Influential Socialist leadersoalition Is inevitable.
Soares' stated objectionased upon his belief that the time for coalition governments in Portugal has passed and that the country's burdensome economic problems can only be solvedovernment which is not divided over domestic policy.
Although Soares has doggedly held his ground on thiseliable source has reported that Soares would view an alliance with the Popular Democrats much more favorably if Sa Carneiro were replaced as party chief by Minister of Internal Commerce Megalhses Mota. Soares, whose parsons! conflict with Sa Carneiro was intensified by the abrasive election campaign, confirmed this viewecent conversation with US Ambassador Cerlucci.
The Popular Democrats' election performancelow to SaiDtYtf aMiists impressed hli own imeqe on the party so successfully,ajor undertaking.
A Socialist accommodation with the conservative Social Democratic Center, which finished third8 percent of the vote, would raise serious policy end ideological differences, but would have the advantage of harmonious personal relations between party loaders. Inclusion of the Social Democratic Center in the government, however, would give rise to demands for similar representation from the Communists, who finished close7 percent.
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A Socialist attempt lo form in alliance with the Communists cannot be ruled out, but Soares' heated denial of such intentions during the cempeign, coupled with strong opposition from both then the Portuguese military and Portugal'! NATO allies, would seem to diminish considerably the chances ofombination.
The Communists' best hope of participation would begovernment of national salvation" formed toerious politicalpossibility Soares alluded to in an interview on Sunday.
,CIA
The present stalemate could conceivably continue until the presidentialossibility that is likely to put growing pressure on party and military leaders to agreeoint candidate toivisive campaign and minimize political instability during the next two months. (CONFIDENTIAL)
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