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JPRS-WER- 85-053 17 June 1985 WEST EUROPE REPORT CONTENTS POLITICAL EUROPEAN AFFAIRS CYPRUS Time Seen Running Out for Franco-German Initiatives (Roger de Weck; DIE ZEIT, 17 May PPE e*eeee72se7nee@e#ee#ee#s#8e?#e Conflicting Views on Denktas' Referendum (0 AGON, 8 May 85; O FILELEVTHEROS, 9 May 85)....ceeeeees Negative Vote Not Advantageous ‘Loyalty’ Seen in Turkish Cypriots AKEL Statement on Anti-Kiprianou Rally (KHARAVYI, 12 May 85) eeeeee eeeeveeveereeeereeeeeeee ee ee eee eee Illegal Arms Allegedly From Lebanon (0 AGON TIS DEVTERAS > 13 May 85) eoeeeoeeene0n02e2ee @eeeeseeeoeee#eese2eee8e8 se Briefs UN Member's Arrival Settlers' Families DENMARK /GREENLAND Danes in Greenland Meeting Increasing Hostility (INFORMATION, 20-21 Apr 85; BERLINGSKE WEEKENDAVISEN, 12-18 Apr 85) eeeeeeee eeeveeeeveeeee eee eee eoceeescsecsesesecses Skilled Danes Still Needed, by Niels Westberg Faster Pace Toward Self-Reliance, by Victor Andersen > 10 10 11 11 14 DENMARK Poll Shows SDP, Socialist People's Party With Majority aes LEMUe De F PEN OS) 0056640 64600600600000008 19 Conservatives Would Lose Seats, by Svend Bie 19 "Protest' Against Strike Settlement, Editorial 21 Socialist People's Party Congress Delays Security Policy Stand (Thorkild Dahl, Marion Hannerup; BERLINGSKI TIDENDE, DU GOS 6666.00.06 6:0. 065-050006.0460000088 TUTTLE LTT TTT 22 FINLAND Ministry Official at Ottawa Rights Conference Defends Stand (HELSINGIN SANOMAT, 10, 11 May 85)....... eoeccesecs eoccee 24 Human Rights Require Peace, by Matti Verkkola 24 Newspaper Backs Envoy's Stand, Editorial 26 GREECE KKE's Reportedly Trapped by PASOK (Giannis Agorianitis; I KATHIMERINI, 1% May 85).......... 27 Comments on KYP Personnel Reassignments (PONDIKI, 19, 26 Apr 85)..... TUEWWETELIEELELELILELELeL 29 Positions Listed 29 More Changes ICELAND Foreign Minister Reports to Althing on Foreign Affairs (Geir Hallgrimsson; MORGUNBLADID, 3 May 85).....eeeeeeees 31 Surveys of Young Voters Indicate Move Toward Right (MORGUNBLADID, 25, 27 Apr 85).....e0e. wTeTCTTLE CELE TTT 34 New Voters Favor Independence Party 34 Student Poll Shows Similar Results 34 Paper Comments on Youth Polls, Editorial 35 Briefs Voters Prefer Hannibalsson in Poll 37 NORWAY Gro Harlem Brundtland on LO Ties, Campaign Strategy (Terje Svabo; AFTENPOSTEN, 11 May 85)...... pesebeuecoones P 38 Union Congress Reveals Questioning on Ties to Labor Party (Ragnhild Moy; AFTENPOSTEN, 11 May 85)...... Tre TT TT ioe 42 PORTUGAL Reagan Visit Succeeded by ‘Ignoring Issues' (Editorial; DIARIO DE NOTICIAS, 11 May 85)......cceceeees 45 Do Amaral Expounds Presidential Campaign Themes (DIARIO DE NOTICIAS, 27 Apr 85)......... econesccccccovese 47 SWEDEN Views, Influence of Christian Party Examined (Ake Ekdahl; DAGENS NYHETER, 12 May 85).......eeeseees nae 49 MILITARY DENMARK Government Wish To Buy Subs From Norway May Spark Debate (Solveig Rodsgaard; BERLINGSKE WEEKENDAVISEN, 2-9 May Bees bisen aes e*e0e9#2+e e*eeev#e#e#e? *eeeeeseeese_e7#*#een#ee#e”e738teee#eeeeee28eee 53 FEDERAL REPUBLIC OF GERMANY Defense Against Combat Helicopters Still Problematic (Wolfgang Flume; WEHRTECHNIX, Apr 85)......eseeeececees oo GREECE Government's NATO Policies Seen Dangerous (Evstathios Lagakos; I KATHIMERINI, 13 Apr 85)..... TTT T 63 Mirage Aircraft Repaired by EAV (L. Damenet TA WEA, FO ABE SS) cccccvcdscccccvesevees 006% 68 ICELAND Splits Within Progressive Party on Base Issue Revealed (Staksteinar; MORGUNBLADID, 25 Apr 85)....scccccccccceees 69 Details on Althing Radar Station Debate, Vote for Approval (MORGUNBLADID, a 4 May PD ub bb 6006666660406 65660660066-0% 71 Parties Divided by Vote 71 Paper Comments on Althing Action, Editorial 72 - C= SWEDEN GREECE ITALY NORWAY SDP, Conservative Panel MP's Urge Stronger War Organization (Roland Brannstrom, Per Petersson; SVENSKA DAGBLADET, 3 May ee eeeeee#ses. eeeeoeeeeeeenstseeneeenrteeeesepeeeeeeeeeeeee New Defense Research Agency Chief Gives Views on Projects (Eric Dyring; DAGENS NYHETER, 15 May 61866604968 600886 Paper Comments on Defense Committee Report on Threat Picture (Editorial; DAGENS NYHETER, 17 May ts teawkeeededes seen’ ECONOMIC Bank of Greece Reports Unfavorably on Economy (AKROPOLIS, 30 Apr 85)......-eee- WEEETUTTTTLITITL TTT TTT Briefs Farmers Constitute Majority Technological Cooperation With USSR Evils of Socialized Enterprises Labor Outlines Platform for ENEL Contract Negotiations (Alessandra Urbano; RASSEGNA SINDACALE, 8 Mar 85).....e.- Recovery Problems of Industrial Holding IRI (Giuseppe Turani; LA REPUBBLICA, 25-27 Apr 85)......eeee. Finance Minister Submits 1986 Budget Proposals (Einar Solvoll; AFTENPOSTEN, 11 May 85).....eeesececcoees PORTUGAL SWEDEN Inflation Shows Signs of Slowing Down (TEMPO, 18 Apr . eeeeve eeeeeveeveveeee eeeveveeeeeeee ee eee Significant Increase in Foreign Investment in 1984 (TEMPO, 3 May +} Pe ees eeeeeevese eeeveeveeveeeeeeree ee eeeee Austerity Measures Fail To Address Economy's Real Problems (EAitorial; DAGENS NYHETER, 14 May 85)... ccscececccvvcces — 7 74 77 79 104 108 110 111 ENERGY GREECE DEI Announces Pre-Electoral Energy Program (I KATHIMERINI, 4 May 85) eeee#ees eeerveeeweeeeoeeweeeeseeeeeeeeeee@ Briefs Energy Consumption Up ITALY Considerations for Renegotiating Algerian Gas Contract (RASSEGNA PETROLIFERA, 18 Feb 85)....cccccccscccccccccces PORTUGAL Nuclear Energy Seen as No Solution to Problems (DIARIO DE NOTICTAS, 25 Apr Po onew6ueeeeeebnbeeseneeee - e- 113 115 116 119 JPRS-WER-85-953 17 JUNE 1985 POLITICAI EUROPEAN AFFAIRS TIME SEEN RUNNING OUT FOR FRANCO-GERMAN INITIATIVES Hamburg DIE ZEIT in German 17 May 85 p 6 [Article by Roger de Weck: "Do the Germans Know What They Want? If Kohl and Mitterrand Want to Move Europe Forward They Had Better Hurry"] [Text] Paris, May--Moods change so quickly and so easily. At the conclusion of the international economic summit in Bonn Francois Mitterrand, delighting in his unique position, held a memorable press corference. Every sentence exuded pride in having steadfastly withstood American pressure and reaffirmed himself as a true European. Just five days after this appearance, however, the French president felt compelled to appear before the press once again. With no advance notice he invited the reporters who had accompanied him to Bonn, plus a few more, to an informal--downright unusual--question and answer session at the Elysee Palace. What news did he have for them? None. Mitterrand did not want to announce any decisions; he just wanted to create a new atmosphere. In Bonn an elated, self-important politician was basking in tne success of the moment. In Paris he was once more the prudent, cautious, forward-looking president. To him the disappointment of the French press over Helmut Kohl's vacillation and the criticism of the "windy" chan- cellor must have seemed exaggerated. Now Francois Mitterrand was trying to smooth the waves, justify his rather solitary opposition to "Star Wars" and upcoming negotiations on world trade, and above all alleviate concerns about Franco-German relations. The consérvative FIGARO wrote of a "serious setback," and the lead articles in all of the Paris papers followed a similar line. It was no coincidence that the very first question directed at Mitterrand dealt with this difficult give- and-take relationship between Bonn and Paris. In his reply the president very nearly sought sympathy for Kohl's dualistic attitude; later, in connection with another matter, he praised the willingness of the FRG to make sacrifices for European concerns. In short, he was as accommodating as could be. Obvi- ously from the very beginning President Mitterrand did not want to be accused of casting a pall over the special Franco-German relationship. Although Mitterrand does not accept the phrase "Franco-German axis," his Euro- pean policy is based on just such a concept now more than ever before. "I do not expect much of Great Britain anyway,'' he said seven weeks before the EC summit meeting in Milan at which the reform of the European Communities would be discussed. In his search for a European policy breakthrough he must turn to Helmut Kohl. Both men are still awaiting the big breakthrough such as the one accomplished by Valery Giscard d'Estaing and Helmut Schmidt with the de- velopment of the European Currency System. Mitterrand would like to be able to show a success before the French parliamentary elections in March 1986. Seldom have Franco-German relations therefore played such a direct role in France's internal politics. At the same time the pro European mood now prevailing in this country is impressive. It would be ill-advised for Chancellor Kohl not to take advantage of this opportunity. He has to deal with a French partner who has proved to be an ardent European, not least of all through his exemplary tenure as chairman of the EC Council during the first half of 1984. Even at the risk of losing a few percent of the vote in the south of France, Mitterrand voted for admitting Spain and Portugal to the EC, a step which could cost any French head of state greatly in terms of domestic political support. The basic principle of the unanimous vote in the decision-making process within the EC Council of Minis- ters, originally put through by General de Gaulle, has been called into ques- tion by Mitterrand. There is no doubt that he is a particularly "European" president. The time is favorable for moving forward with Franco-German agree- ments on European unity. Of course, the time is also growing short. Mitterrand will remain a partner with whom one can do business only until the end of this year. After that the election campaign will divert his attention first of all, and then, as of March 1986, he will have his hands full with the domestic political crisis for which France is headed. Who will be in charge in Paris following the elec- tions? Will Mitterrand make it? Will France enter a months-long or even years-long period of domestic and foreign policy paralysis? France's partners do not exactly look forward to having to work simultaneously with a conser- vative prime minister and a left-leaning president elected to serve until 1988. The opposition and the press are already trying to determine who will probably make up the French delegation to the international economic summit in Tokyo next year--and whether France will be able to take part in it at all ... Naturally the Franco-German partnership reflects the basic interests of both countries too well for a shift in the power structure or the government to do it any harm. But there will no doubt be time lost following the elections-- precious time. If this opportunity is not to be missed before the end of 1985, "Bonn''--and from the French point of view there has for some time been no unity within the Kohl-Genscher-Stoltenberg triumvirate--must be prepared to actively review the French initiatives and if necessary adapt them to their own purposes. Bonn must know what it warts. And Bonn must show its desire. Up to now European policy discussion has centered on three main points which all originated in Paris. No one can deny that more efficient EC institutions, a better coordinated European research effort (Eureca) and greater monetary cooperation extending even to the introduction of a currency valid for all of Europe (ECU) are valid and important objectives. When the French formulate these ideas they naturally inject their own interests and political concepts into their initiatives. For this reason many politicians in Bonn are sus- picious of them from the start. But instead of present counterproposals they present nothing. Bonn is seldom prepared to contribute its own concepts to the dialogue. One small example of this involves the plans proposed by France for a Franco- German or European Peace Corps, a joint group of people to provide development assistance. With this plan the French, otherwise unyielding when it involves this question, indicated a willingness to cooperate in Africa and appeared to be in agreement with a long-term German involvement. But instead of readily taking the ball into their own court and exploring all of the advantages and disadvantages of the plan, the German side immediately sensed great danger: Paris wants to provide development aid under the French flag with German money. Nothing more has been heard about a joint Peace Corps plan for months now. Both countries complement one another in many creas, and this fact could be used to the advantage of all Europe if the now and then somewhat diffuse French initiatives would be given concrete form by the German side. Regarding the currency question, Bonn could try to bargain for the removal of French controls on capital and the institution of a truly independent official cur- rency agency (patterned after the Bundesbank) in exchange for strengthening the ECU, particularly since there has never been a greater convergence of economy policies in the FRG and France than there is today. In the case of Eureca and the plan for a technological Europe, Paris is likewise more than willing to make concessions simply in order to move forward. At the first German objection, the French, who long ago vowed to give up believing in pat solutions, did not pursue their suggestion to found a European research agency. "When we propose concrete projects, the accusation is that they correspond too closely to our own ideological interpretations. And when we hold on to these initiatives the accusation is that they are too theoretical and vague. What should we do?'' These are the nearly despairing questions asked within the highest circles of the Paris government. Of course it would be one-sided to accuse only the Germans of "walking on water" in Europe. Too often equally significant British opposition to French initiatives is overlooked. Kohl and Mitterrand have simply celebrated this partnership long enough, spoken often enough "from the heart," continued to walk on hand in hand and raised expec- tations long enough that they can hardly continue in this vein after the interlude of the Bonn summit. A little less emotional warmth and a little more coolly thought-out politics are needed. "Cool temperatures encourage activity,'' said Wilhelm Busch long ago. 12552 CSO: 3620/358 JPRS-WER-85-053 17 JTTINF 1985 POLITICAL CYPRUS CONFLICTING VIEWS ON DENKTAS' REFERENDUM Negative Vote Not Advantageous Nicosia 0 AGON in Greek 8 May 85 p 1 /Excerpts/ We neither underestimate the percentage nor the significance of the negative votes of the Denktas plebiscite for the ''constitution'' of his pseudo-state. But also we shall not hasten to join the celebrations and triumphant boastings that the majority of the Turkish Cypriots disapprove of the Denktas separative actions. There is not a specific and solid element which could persuade and assure us that the percentage of the Turkish Cypriots which disapproves of the pseudo- constitution did so in order to express their opposition to the establishment and consolidation of a Turkish Cypriot ''state''. Nor do we have in mind the declaration of a Turkish Cypriot leader--among those who opposed the con- Stitution--that the negative vote meant to renounce the ''independence" of the Turkish Cypriots. On the contrary, it appears that the causes for the negative vote should be sought in internal reasons and they could perhaps have the disapproval of the constitution's servile provisions or even that of Denktas personally. Since the state was proclaimed with the unanimous consent of all Turkish Cypriot parties, we do not think there are any doubts as to the manner in which the Turkish Cypriots are coping with Denkias' separative actions. Therefore, we cannot say that the negative vote of any percentage of Turkish Cypriots means disapproval of the pseudo-state or opposition of the Turkish Cypriots to their independence and, especially, their positive response to the Greek Cypriot positions But even if we accept, for the sake of argument, that the percentage of Turkish Cypriots who voted against the pseudo-constitution disapproved of the division of the island and supported its renewal, even in such an improbable case one should not overestimate the role of the Turkish Cypriot masses in shaping the overall Turkish policy in Cyprus. Even if they want, the Turkish Cypriots cannot be a serious obstacle to Ankara's plans on Cyprus. They cannot, that is, be either a lever of pressure on Denktas' objectives or an impediment to Arkara's plans. Therefore, we should not close our eyes deliberate!y--we should not entertain any illusions and, above all, we should not be distracted from the substance and reality; a reality which is tragic: Dektash has taken one more step towards implementing his plans and the Turks have further promoted their objectives while we are tossing about in a sea of confusion about what we really want and we are trapped ina terrible internal crisis which we escalate mercilessly. 'Loyalty' Seen in Turkish Cypriots Nicosia 0 FILELEVTHEROS in Greek 9 May 85 p 3 /Excerpts/ The so-called plebiscite the chauvinistic Turkish Cypriot leader- ship organized has reaffirmed the truthfulness of the Greek saying: ''Nothing bad is devoid of good.'' All these unfavorable reactions by the Turkish Cypriot parties and leaders against the plebiscite and the analysis of the related elements show that if we follow the right policy, which should not arm and strengthen Turkish chauvinism and which should not push the Turkish Cypriot masses into the arms of Denktas, then we can hope for a just solution, a viable solution of the Cypriot problem. Since we do not exactly know what the population proportion in the northern section of Cyprus and, specifically, what the real number of those imported from Turkey is, we are not ina position to accept the view that the plebi- scite would have failed without the colonists. We can say, however, with certainty that regardless of their number, the colonists played a decisive role in favor of the plebiscite. Yet, the basic fact is that large masses of Turkish Cypriots which under certain conditions can be the overwhelming majority of the people do not accept the divisive policy of its chauvinist leadership; that they are ready for any honorable cooperation with the Greek Cypriots; that they rightly see the way for a solution of the Cyprus solution after which we can start working for our country's overall progress, for its economic progress, which will be a blessing for ail its citizens without any religious, race, or other discriminations. We must have the ability to properly handle our problems as well as the precious ability to foresee the future in either case. A proper policy on our part disarms the Turkish Cypriot chauvinism and strengthens all those healthy forces which desire the welfare of Cyprus and are working toward this end. The love for Cyprus, as a fatherland of all its Greek and Turkish inhabitants, was expressed by all those Turkish Cypriots who did not give a positive vote during the plebiscite. Justifiably our newspaper headlined the news of the Turkish Cypriot reaction on the plebiscite as a ''message of patriotism'' because such reactions against the Denktas policy are an expression of patriotism; they are an expression of love for Cyprus, our common fatherland; a love which is more- over expressed under conditions of a large and noticeable presence of Turkey. These reactions are burdening our leadership with serious duties which must occupy us daily. 7520 CSO: 3521/253 JPRS-WER-85-053 17 JUNE 1985 POLITICAL CYPRUS AKEL STATEMENT ON ANTI-KIPRIANOU RALLY NC120941 Nicosia KHARAVYI in Greek 12 May 85 p l [Statement issued by the AKEL Political Bureau and published on 11 May] [Text] People of Cyprus: The Cyprus issue is at an extremely delicate point. The failure of last January's summit created a dangerous deadlock which has been mercilessly exploited by the chauvinist Turkish Cypriot leaders. While the UN secretary general is undertaking tireless and insistent efforts for a new summit, the Turkish Cypriot leaders, with the support of the Ankara regime and the encouragement of U.S. imperialism, are creating new faits accomplis in an effort to bolster the illegal Turkish Cypriot state and the final partition of our island. President Spiros Kiprianou's responsibility becomes increasingly understandable in face of these negative developments, which further complicate the Cyprus issue and make its solution even more difficult, because it is he who con- tributed to the summit's failure through his mishandling of the situation. Meanwhile, with his current position, President Kiprianou has confirmed his obstinate refusal to accept the February 23 resolution and the March 29 decision of the House of Representatives. Despite the fact that Kiprianou has become a minority president, he insistently continues to refuse to accept the principle of collective decisionmaking in handling the Cyprus issue and the internationally accepted democratic principle of the implementation of majority decisions. Only by accepting and implementing this principle, will any meaning be given to the meetings of party leaders and representatives. Only in this way can there by any collective decisionmaking in the handling of the Cyprus issue. Patriotic people in Cyprus: In the midst of the exceptionally critical condi- tions through which the Cyprus issue is now passing after the failure of the summit, because of the disruption of democratic cooperation and the fragmenta- tion of the domestic front caused by Kiprianou's aimless actions and his insistence on making unilateral decisions regarding the Cyprus issue and the fate of the people, AKEL's Political Bureau has resolved to declare a pan- Cypriot mass meeting at 2030 on Friday, June 7, at Elevtheria Square in Nicosia with AKEL Secretary General Ezekias Papaioannou as the main speaker. Cypriot people: The primary duty today centers on the struggle to extricate the Cyprus issue from its current and dangerous deadlock, and the struggle for the justification and the salvation of Cyprus. Through your active presence at the mass meeting you must proclaim your determination for: -- Acceptance of the House of Representatives resolution; -- Collective handling of the Cyprus issue; -- Acceptance of the democratic principle of the implementation of majority decisions; -- Declaration of a presidential election; -- Formation of a government of National Unity; -- Unity on the basis of joint position and joint tactics; -- Support of the Perez de Cuellar initiative; -- Rejection of new faits accomplis; -- Rejection of occupation and partition; -- Withdrawal of Turkish and all foreign troops from Cyprus; -- Demilitarization of Cyprus; -- Rapprochement of Greek and Turkish Cypriots; -- Achievement of a peaceful, just, mutually acceptable, and viable solution of the Cyprus issue on the basis of the summit agreements and UN resolutions. Everyone must attend the 7 June mass meeting. [Signed] The AKEL Political Bureau. cso: 3521/250 JPRS-WER-85-053 17 JUNE 1985 POLITICAL CYPRUS ILLEGAL ARMS ALLEGEDLY FROM LEBANON NC130811 Nicosia O AGON TIS DEVTERAS in Greek 13 May 85 p l [Text] A senior AKEL official has revealed that according to information available to his party, the arms referred to in a report prepared by AKEL originated from Lebanon. This same official noted that all evidence acquired by AKEL in reference to its charges about the illegal importation and distribution of arms was personally given to President Spiros Kiprianou by AKEL Secre’ ary General Ezekias Papaioannou. These revelations had been disclose! hy the senior AKEL official during a recent meeting in Nicosia. Charges concerning the distribution of illegal arms were also made by DISI in an exclusive statement to this newspaper by Glavkos Kliridhis. In a second statement, the DISI chairman noted that a government official was among those involved in the distribution of arms. Replying to these charges, the government spokesman stated that there is no reason for concern. The government is prepared to strike at any form of illegality, no matter from where it originates. CSO: 3521/250 JPRS~WER-85-053 17 .TTINF 1985 POLITICAL CYPRUS BRIEFS UN MEMBER'S ARRIVAL--Paul Wurth, who was recently appointed the third member of the Missing Persons Committee to replace the late Claude Pilloux, has arrived in Cyprus. A UN statement issued in Cyprus notes that his trip is a familiarization tour that will last about a week. Mr Wurth will meet with the Greek and Turkish Cypriot members of the Missing Persons Committee. [Text] [Nicosia Domestic Service in Greek 0700 GMT 19 May 85] SETTLERS' FAMILIES--More families of settlers have arrived in the occupied areas and have settled in parts of the Karpas peninsula. According to our reports, 10 families have settled at Rizokarpasso. The settlers arrived recently, and prior to the “elections" in.the occupied areas. The view is that they have arrived in order to vote during the referendum. Of course, one should not rule out the arrival of more settlers recently and their settlement in areas other than where there are Greek Cypriots, who would notify the authorities of the republic. Three defectors recently arrived in the free areas; they were held for interrogation by the British bases authorities. [Text] [Nicosia 0 AGON TIS DHEVTERAS in Greek 20 May 85 p 1] CSO: 3521/250 10 JPRS-WER-85-053 17_.1INF 1985 POLITICAL DENMARK/ GREENLAND DANES IN GREENLAND MEETING INCREASING HOSTILITY Skilled Danes Still Needed Copenhagen INFORMATION in Danish 20-21 Apr 85 p 5 [Article by Niels Westberg: "Qallunaaq!"] [Excerpts] The old word for Dane--"Qallunaaq"--has a manifest undertone of abuse in Nuuk, the capital of the new Greenland. The increasing number of Danes who have been "called in" constitute a problem to the six-year-old home rule: the Danes are necessary--but obstruct the Greenlandization process. The hostility toward the Danes--"the boomerang of colonialism"-- is not least difficult to cope with for young Danes in Greenland. Some become racists from it. We are sitting in the kitchen of the flat of the Danish woman at the fiord of Nuussuaq, a modern satellite town of Nuuk, Godthab. The Danish woman, the young Greenland woman and myself. We are eating shrimp, and our conversation is factual, desultory, friendly. The Danish woman then asks: "What is it now that you call Danes, in Greenlandic?" The Greenland woman stops shelling-shrimps, her body becomes tense and her voice unexpectedly sharp: ' she says in a low but harsh voice. "It is none of your business,' There is complete silence in the kitchen for 20 seconds. Then everybody behaves as if the words had not been uttered, and the shelling of shrimps continues. The conversation is resumed. The word is "qallunaiq," which means "a white man from the south," thus a "Dane." A word which still today--after 6 years of the form of independence within the joint rule made possible by the home rule arrangement of May of 1979--has a manifest undertone of abuse. “11 And of stultification. The word has the connotation of “White man with a big tummy and an air of astonishment." And the sharp refusal of the Greenland woman to teach the Dane the word, in their atmosphere of cosiness and friendliness, is an indication of the line drawn: "We put up with the fact that you are still here as we are compelled to do so. But make yourselves as invisible as possible. And above all: Keep away from our national character and our sentiments." The subject--the hostility toward Danes--is altogether an extremely sensitive, almost explosive, issue in the current Nuuk, the largest urban society of Greenland with close to 11,000 of the island's tiny population of 50,000 inhabitants and the political and administrative center of the home rule government. Nearly half of the inhabitants of Nuuk are Danes, business people, skilled workers and civil servants of the home-rule government, and the very visible presence of the Danes everywhere in this untidy and neglected town, the popula- tion figure of which has increased eleven times since World War II, suggests the idea that Danes and Greenlanders in this very place are bound to have arrived at some form of modus vivendi, for which the scene was laid with the gradual transfer to the home-rule government of the political and administrative tasks. If asked, Danes who have been living in Greenland for many years, will, indeed, answer that the hostility toward Danes--"the boomerang of colonialism''--is appreciably more noticeable in other towns. In Nuuk, "they are less explicit about it," as stated by somebody else. However, all of the Danes in Nuuk with whom INFORMATION has discussed the prob- lem have one thing in common, viz. that they do not want to be quoted in the newspaper: the society of Nuuk is too small, they all know one another, and it is not good for oneself to be too outspoken on this issue, it may give rise to problems, etc. Racism "Actually, I have become a racist from living here," concedes a -‘oung Dane who after 4 years has resigned from his job onboard the Danish _.uspection vessels, the base of which is at Nuuk. We are talking with each other one night at the dance restaurant of Hotel Godthab, and he has allowed me to write what he says but without giving his name. "Greenlanders simply do not like you because you are Danish. They like for Danes to be here and to help them, but they accept their help as a matter of course, and it is quite clear from their behavior that they do not like you. I have no respect for that attitude--that is why I believe that I have become a racist. Nor do I like the Greenlanders. I came here with the best of inten- tions, but it is over." 12 " the young man said. "Let me give you an idea of what I mean, "When somebody has been shipwrecked at sea in his small boat, we go out to save him--in all kinds of weather and often risking our own lives. But do you think that he will at least thank you for it? No. No thanks. It is simply a matter of course, is it not?" The young man is bitter. If pressed, he will admit that it would be unheard-of for the colonialists to arrive and demand gratitude on the part of the Green- landers. However, he cannot reconcile himself with the idea that the hostili- ty toward the Danes in home-ruled Greenland today affects "somebody like him- self," as he puts it. What he is saying is that he as a young Dane in his mid-twenties does not want to take the blame for the sins of his forefathers as colonialists. He refuses to undertake the responsibility. "Caught" In the midst of this Greenland on its way ahead in several areas, the Danish dominance constitutes "a bottleneck in the Greenlandization process," says Vigdis Stordahl, a social scientist, who this very spring has completed a study on the Greenland home-rule arrangement. From the start of the home-rule arrangement in 1979 till 1982 the number of called-in Danes increased from 8,536 to 9,279, she states, adding that it is especially the expansion of the administrative and bureaucratic apparatus of the home-rule government which has created the need for highly qualified Danish manpower. "The bottleneck effect is that the gradual takeover by the home-rule govern- ment of one political and administrative area after the other apparently increases the need for called-in expertise--and thus hampers the intended Greenlandization of the key areas of the society. "I find that this need for highly qualified manpower and the political and moral statements to give priority to Greenland manpower illustrate in an excellent way what we call the built-in conflicts or tensions within the Greenland home-rule arrangement," Stordahl says. "The home-rule government is dependent upon, indeed, more or less caught in its overdeveloped administrative apparatus," the Norwegian scientist says, drawing attention to the fact that the public sector as a whole, i.e. the state, the municipalities and the home-rule government, today employs nearly two-thirds of all of the salary and wage earners in Greenland. Approximately 12,700 persons, i.e. one third of the entire Greenland population between the ages of 15 and 29 years, receive their incomes from employment within the public sector. 13 "Hangover" The Norwegian social scientist who herself is a Lapp and, to a large extent, has studied the Greenland home-rule arrangement in an attempt to compare the problems with those of the Norwegian Lapp policy says that she at Nuuk in the winter and spring of 1985 has experienced if not some kind of "hangover feeling," then at least "an insidious feeling of despair" among Greenland politicians and intellectuals. "Siumut ["Forward"] has put the home rule system on its feet and thus belied the claim on the part of Atassut ["Mutual Cooperation"] that it wes not feasible. The question, however, is whether it is necessary to continue working in the same old manner inasmuch as it has been necessary to appoint Danes to administer the political structure they got with the home-rule system because they did not themselves have the people or the economic or educational basis to fill the administrative apparatus they took over.” Vigdis Stordahl concludes: Called-in Danish expertise is necessary and will remain so as long as they choose to maintain the form of administrative apparatus that they have today. That also means that Danes will remain in key positions with the possibility of continued Danish dominance as a consequence. However, what people conceived as Green- landization was first and foremost that the Danish dominance would decrease by Greenlanders taking over the positions of the Danes. And then it helps but little for politicians to say today that they never meant that Greenland would be able to manage entirely without Danes or for them to refer to the fact that they, after all, live in a mixed society. The fact that people find that the Danish dominance remains too strong in the Greenland society should be taken more seriously than is the case today. Otherwise, I am afraid that the new home-rule administration will merely experience finding itself involved in a self-destructive discussion for or against the Danes-- instead of a discussion on the possibilities and limitations of the power apparatus they were given through the home-rule government." Faster Pace Toward Self-Reliance Copenhagen BERLINGSKE WEEKENDAVISEN in Danish 12-18 Apr 85 p 3 [Article by Victor Andersen: "Greenland Now Becoming Independent at Record Pace: Flight of Personnel from Ministry of Greenland Affairs"] [Text] At the transition to home rule of Greenland in 1979, time schedules were fixed for the takeover by Greenland politicians of the areas which had hitherto been administered from Copenhagen. A time schedule was fixed ranging all the way up to the year 2000. That schedule is now being set aside in that the Greenland political leaders feel capable of taking over the tasks long before expected. 14 There is concern among the personnel of the Ministry of Greenland Affairs at Kultorvet in Copenhagen. The employees fear that the ministry will slip away from them. Some of the most capable people within the ministry are in the process of seeking other jobs already now. Minister of Greenland Affairs Tom H¢gyem has said on several occasions that he would probably be the last minister for Greenland affairs, and that he considered it a noble task to make himself superfluous. However, it is not primarily these statements on the part of the minister which have given rise to nervousness among the employees of the ministry. The cause of their current concern is the concrete development which is taking place within the Greenland home-rule government right now. At the formation of the home-rule government in the spring of 1979, a time sched- ule was set for the takeover by the home-rule government of the administrative areas which had hitherto been safeguarded by the Ministry of Greenland Affairs and the Greenland Trade Department (KHH), both located in southern Denmark. Ravenous Appetite At first, the transfer of tasks from the south to the north went smoothly. Matters concerning the Church, social affairs, education, assignment of work, etc., were transferred from Danish into Greenland hands almost withcut difficul- ty. The main reason was that Danish personnel simply remained in their hitherto positions but now merely received their pay from the home-rule government at Nuuk/Godthab instead of from the government pay office in Copenhagen. However, when it became the turn, according to the schedule, for the takeover by Greenland of the Greenland Trade Department, the time schedule was upset. The matter was postponed year after year, although the takeover had been planned to take place in stages. Greenland was thus first to take over fishing, factory operation, sealskin purchases and export. Subsequently, the following areas were to be taken over by the home-rule government: the Atlantic traffic, the internal traffic within Greenland by sea as well as by air, as well as the wholesale and retail trading, i.e. the entire operation of shops in Greenland, involving the obligation to provide all Greenlanders with their daily articles throughout the year, regardless of their remote location. And after this transfer, which thus happened only 3 months ago, the surprising thing happens that the home-rule government gets a ravenous appetite to take over the rest of the Danish power as soon as at all possible. Agreement Signed Within the home-rule government in Godthab, the sudden desire for a takeover is explained as follows: "We have discovered that it is all interconnected. You cannot separate the purchasing of sealskins from the trading , as little as you can separate the Atlantic traffic and the internal traffic from the export sector. It is all of it a functional entity. We are therefore now hurrying to correct the mistake. Whereas we were scheduled to take over the second half of the Greenland Trade Department only in 1995, the takeover will now take place already as of the next New Year." 15 Minister of Greenland Affairs Tom H¢yem confirms to BERLINGSKE WEEKENDAVISEN that the new deadline for the takeover is a fact. Together with the Greenland "minister of finance," home rule government member Moses Olsen, he has just signed an agreement to that effect and will introduce the required bill in the Folketing in order for it to be passed by the Folketing by the end of the year. It may be added that the former manager of the Greenland Trade Department, Jens Fynbo, from the start recommended the home rule government to take over the Greenland Trade Department all at the same time. Living in retirement, he is now found to be right. The other major Danish-run organization concerning Greenland affairs is the Greenland Technical Organization (GTO). The Greenland Technical Organization is now in charge of practically all building construction in Greenland from airfields and Atlantic quays to housing construction, and it also operates shipyards, etc. It has so far been uncertain whether the home-rule government did indeed want to take over the Greenland Technical Organization. A committee, headed by the Danish High Commissioner in Greenland, Torben Hede Pedersen, however, has proposed that it be transferred to the home-rule government. And the Greenland politicians now also want for this takeover to be carried through at a furious rate. In addition, while their appetite is still increasing tremendously, the home- rule government wants to take over the Greenland Fishing and Environmental Research Department. On this point, however, it has encountered a certain amount of resistance on the part of the Danish government. The accelerated total takeover of the Greenland Trade Department has been clearly stated to the Danish staff. Within the home-rule government, one of the members of the home-rule government, Josef Motzfeldt, has been given the special task of arranging the rapid takeover of the remaining tasks of the Greenland Trade Department. He is assisted by one of the most capable Danish civil servants of the home-rule government, Flemming Olge, who was formerly director of the Department of Economics. At a recent meeting in the canteen of the Greenland Trade Department at Aalborg, Josef Motzfeldt (who is remotely related to Greenland's "prime minister," Jonathan Motzfeldt), suggested to all of the employees within the Greenland Trade Department that they continue in their jobs as employees of the home-rule government. He stated on the same occasion that the home-rule government intends to carry on the hitherto price policy of the Greenland Trade Department, according to which an article costs the same for the Greenland consumer, regardless where it has to be taken in the vast area of Greenland. Ministry Closing Asked about the alarm within the Ministry of Greenland Affairs at the prospect of the closing down of the ministry, Tom H¢yem tells BERLINGSKE WEEKENDAVISEN: 16 "It is true that this issue agitates the minds of everybody. However, it would be unfortunate for the idea to gain ground that the vast amount of expertise concentrated within the ministry would become superfluous. They should not believe in Greenland that problems disappear by themselves be- cause the ministry is being abolished, and people in Denmark should not be- lieve that the responsibility in this country for much of that which happens in Greenland will disappear together with the ministry. Purely from the point of view of work, there will be enough to look after within the ministry for still quite some time. Dismantlement may require equally much work as the building up of a ministry." On the takeover of the Greenland Technical Department, Tom Héyem says that the negotiations have not yet been completed. It is thus still an open question whether the home-rule government will take over the very difficult housing sector. The takeover of the other tasks of the Greenland Technical Department will, however, be likely as of 1 January 1987. On the desire on the part of Greenland to take over the fishing and environ- mental research activities, Tom H¢éyem says that the government has no objec- tions to surrendering the fishing research activities. However, with respect to the desire on the part of the home-rule government to take over the en- vironmental affairs administration as well in support of which they claim that it is closely associated with the problems of the fishing industry, the government wants to point out that there is an even stronger correlation between the environment and the oil exploration in East Greenland. And since the conditions regarding this exploration have not yet become clarified between Greenland and Denmark within the so-called joint council, the govern- ment prefers for the environmental affairs department to remain under Danish supervision for the time being. On the further fate of the Ministry of Greenland Affairs, Tom H¢yem says that he was formerly under the impression that it would cease to exist by the year 2000. "However, at the time, my basis was that the remainder of the Greenland Trade Department was to’ be taken over by the home-rule government in 1995 and the Greenland Technical Department perhaps not at all. As things are now, I expect the ministry to close down by the end of this decade." Danish Example Frightening Greenland is thus about to become a complete political factor. Does that mean that it will also adopt some of the means that have become well-known Danish policies, such as large-scale foreign borrowing? The question may be raised because Greenland has previously borrowed from the European Investment Bank and is expected to continue to have borrowing facilities available there. Prime Minister Jonathan Motzfeldt has, moreover, in a recent speech hinted at that facility for borrowing. The home-rule administration tells BERLINGSKE WEEKENDAVISEN that it is true that the said credit facility is being kept open, but that there are no concrete borrowing plans. If an investment project turns up, the profitability 17 is assured, the question of borrowing may become topical. However, as it is being said: "The effects of Danish borrowing abroad are enormously frightening. We shall be very cautious borrowers." 7262 CSO: 3613/1511 18 JPRS-WER~85-053 17 JTINE 1985 POLITICAL DENMARK POLL SHOWS SDP, SOCIALIST PEOPLE'S PARTY WITH MAJORITY Conservatives Would Lose Seats Copenhagen BERLINGSKE TIDENDE in Danish 5 May 85 pp 1, 10 {Article by Svend Bie] [Text] The first Gallup poll since the strike intervention shows a decline for the Radical Liberals and a gain for the Social Democrats. Voters are abandoning the small parties. The Christian People's Party and VS [Left- Socialist Party] fell below the cutoff barrier. The Social Democrats seem to have been the big winners in the contract con- test. The Gallup Institute's voter survey for April gave the party 2 per- cent more votes than it had in the March poll. Compared to the election in January 1984 the Social Democrats went from 56 to 62 seats in Folketing. At the same time the Radical Liberals did not win votes for their support for the four-party government. The April poll was the poorest the party has seen for several years. The government's cooverating partner received only six seats in contrast to 10 in the election. On the other hand the Socialist People's Party held onto the gains it has built up since the elec- tion even though the strike intervention did not add more seats and since the Christian People's Party and the Left-Socialists did not clear the cut- off barrier a "red majority" is assured according to the Gallup poll. If we held an election now the Social Democrats and SF [Socialist People's Party] would have a total of 89 seats. An election now would end the worries of Arne Bjerregaard of KRF [Christian People's Party] about whether he can continue to support the government from a moral point of view. According to Gallup KRF will not be represented in Folketing, thus eliminating one leaf of the four-leaf clover. The Left- Socialists, who like KRF and SF are holding a national congress tiiis week- end, also fell below the cutoff barrier and the Progressive Party just scraped through with four seats in the Gallup poll. This is the first Gallup poll taken since the government and the Radical Liberals intervened in the contract dispute. But only the Christian 19 People's Party declined. well as they did in the previous poll. the Conservative Party gained four seats for a total of 46. The other three government parties did just as In comparison to the 1984 election The Liberals were unchanged at 22 and the Center Democrats, who usually have trouble holding onto voters between elections, retained their eight seats. The power balance after an election at the moment will depend as much on which of the small parties can inch above the cutoff barrier as on actual voter shifts. As Gallup shows the situation today, 7 percent of the votes are floating around with parties too small to win Folketing representation. Party Social Democrats Radical Liberals Conservatives Socialist People's Party Center Democrats Christian People's Party Liberals Left-Socialists Progressives Free Democrats Political Index Question: tomorrow?" Party Social Democrats Radical Liberals Conservatives Single-Tax Party Socialist People's Party Inter. Socialist Workers Communist Party Marxist-Leninist Party Center Democrats Christian People's Party Liberals Left-Socialists Progressives Others (parties with less than 2 percent support) Total 10 Jan 84 Ww - ho es. +. we Pa — WNHONNFOCOF FWwWUF e DNR NHDON FP UU On 100.0 Poll 62 6 46 27 8 0 22 of Dee 84 33.42 4.2 24.2 100.0 Election Jan 85 30.7% 4.4 25.6 13.3 56 10 43 21 8 5 22 eS Feb Mar 85 BS 32.6% 30.6% 4.2 4.8 25.4 25.0 11.6 14.8 100.0 100.0 "Which party would you vote for if we had a Folketing election Survey conducted in the period 6-21 April 1985. 4.3 11.5 2.4 7.0 100.0 Reproduction permitted if Gallup and BERLINGSKE TIDENDE are cited as sources. 20 "Protest' Against Strike Settlement Copenhagen BERLINGSKE TIDENDE in Danish 7 May 85 p 10 [Editorial: "Theoretical Figures"] [Text] No one needs to be terror-stricken and no one has reason to rejoice just because the Gallup political index for April shows a shift indicating a potential majority for the Social Democrats and the Socialist People's Party. This did lead the Socialist People's Party to talk optimistically about who should serve in the cabinet of the future socialist government. And if the Christian People's Party had known about the figures when it held its national congress tears would have been shed. But the nation is not run by opinion polls and it does not change anything in reality that one can point to a red majority on paper. It would certainly have been more surprising if the Gallup poll had not shown these shifts. The poll was conducted in the weeks when the government parties and the Radical Liberals intervened in the contract negotiations. This already seems a long time ago but it must be clear in the memories of most people how the intervention was greeted by a large segment of the popu- lation. And an opinion poll conducted at that times would naturally reflect the anger and resentment that were spontaneously and violently expressed by the labor movement and led to a large number of illegal strikes. As far as political parties are concerned this protest benefited the Social Democrats and the Socialist People's Party. And it was detrimental to the parties whose acts had led to the protests. It is characteristic of the protest that the Radical Liberal Party was hit hard in the polls. Without the Radical Liberals the intervention could not have occurred and it is to their credit that they courageously admitted that the intervention was fully in harmony with their basic position. The fact that the Christian People's Party was hit so hard that it fell below the cutoff barrier should not surprise anyone. The party has long been on the edge of this figure and is vulnerable to any setback. There was no election in April and there will not be one right away. The Gallup index is not a prediction of how an election in April would have turned out or of how a future election will turn out when one is held. Gov- ernment supporters do not need to worry and socialist parties should not imagine that a government shift is within reach. On election day the gov- ernment will not be judged on the basis of a strict economic intervention in the spring of 1985 but on the basis of the total effects of the policy it has pursued for several years. At that time the voters will be taking a stand on more than a 2-percent wage ceiling. But it is fair to say that against the background of the Gallup index voters should be aware of how little it would take to produce a socialist majority. Therefore people should be careful not to cast their vote on the basis of a momentary whim. 6578 CSO: 3613/152 21 JPRS-WER-85-053 17 JUNE 1985 POLITICAL DENMARK SOCIALIST PEOPLE'S PARTY CONGRESS DELAYS SECURITY POLICY STAND Copenhagen BERLINGSKE TIDENDE in Danish 5 May 85 p 10 [Article by Thorkild Dahl and Marion Hannerup] [Text] A totally disarmed Denmark in a fully armed world is unrealistic in the view of Gert Petersen of the Socialist People's Party. SF [Socialist People's Party] is in a classic dilemma with regard to defense and security policy. The long-range goal of Danish disarmament must now be weighed against the possibilities of making an immediate contribution to practical politics. That is what SF executive committee member Jorn Jespersen said yesterday at the national congress in Aalborg as an introduction to the party discus- sion of defense and security policy that will determine the scope of a future government cooperation with the Social Democrats. A new security policy program that would have included defense policy as a new feature was supposed to be ready for approval in Aalborg but this has been postponed for a year because broad groups do not want to entirely let go of the slogan from 1959 about disarmament here and now. SF defense policy spokesman Pelle Voigt told BERLINGSKE TIDENDE that he no longer believes in total disarmament here and now but disarmament must occur gradually. "We must discuss what the military system that remains should look like," said Pelle Voigt. SF chairman Gert Petersen said: "When we discuss a labor majority with the Social Democrats we demand disarmament which means that we need to know something about it and be ready to participate." The long-range gcal of defense policy demands will continue to be disarma- ment but a more immediate step on the way to that goal is a Nordic nuclear- free zone that brings Denmark out of NATO's nuclear strategy and removes the basis for reinforcement agreements with NATO allies. 22 SF chairman Gert Petersen said that like many other people in the party he is dubious about entering a process of discussing defense. "We are a little schizophrenic in such discussions," Gert Petersen said to BERLINGSKE TIDENDE, "A totally disarmed Denmark in an armed world is an unrealistic idea. We must also bear in mind that destabilization is not a false premise," said Gert Petersen, adding that there is a greater tendency in local party groups to see the defense discussion as part of the overall picture. Jorn Jespersen said that in light of the ultimate goal of total disarmament the discussion should also determine whether it is necessary for SF "to take some chances we have not taken in the past." 6578 CSO: 3613/152 23 JPRS-WER-85-053 17 JUNE 1985 POLITICAL FINLAND MINISTRY OFFICIAL AT OTTAWA RIGHTS CONFERENCE DEFENDS STAND Human Rights Require Peace Helsinki HELSINGIN SANOMAT in Finnish 10 May 85 p 23 [Article by Matti Verkkola: "Finland in Ottawa: Human Rights Always Another Country's Issue" ] [Text] Ottawa--Finland forcefully emphasized the right of other countries to express their concern about deliberate violations of human rights occurring in another country at the opening session of the verification meeting dealing with the CSCE's human rights document. Finland also pointed out that even the justified criticism of another state with a vocal protest policy “is not necessarily always of benefit or desira- ble". Under State Secretary Klaus Tornudd of Finland, the host of the CSCE, received the honor of delivering the first speech at the Ottawa human rights confer- ence, which got off to a conflicting start on Thursday. The primary importance of neutral and nonaligned countries in the work of the CSCE was underscored by Finland's opening speech as well as by the selection of Switzerland as chairman for the opening day. With his speech Under State Secretary Tornudd defined the framework for the debate on human rights questions and examined those sensitive prerequisites and methods of criticism which the proposing country had reason to consider and recall. “In the international debate on human rights the party being criticized some- times rejects accusations with the view that it is unsuitable interference in the internal affairs of a country. This is an incorrect view,” stated Under State Secretary Tornudd and referred to the UN Charter as well as to the docu- ment of the Helsinki Conference on Security and Cooperation. The under state secretary spoke as if from a crystal ball and expressed his views as impartially as possible. He was straightforward and uncompromising in demanding that human rights be respected. 24 In addition to human rights, Finland also spoke about people's basic rights and the right to life, in connection with which Under State Secretary Tornudd proposed a ban on the death sentence as “a welcome method of respecting the right to life”. Finland urged the other CSCE-countries to follow the examples of the Nordic countries in observing human rights. Tornudd brought attention to the social policy rights of immigrant labor forces and confirmed the ability of the Nor- dic countries to resolve problems thereby increasing their cooperation and se- curity also. The under state secretary urged the CSCE-countries to use the negotiating path offered by international organizations "as a general rule” as well as mutual diplomatic negotiations in their denunciation of human rights instead of a vocal and visible “protest diplomacy”. “Peace is the basis for the enjoyment of all human rights. In deliberating se- curity and cooperation among states, we must also remember that significant point of view that the observance of human rights is an important background for international peace, security, and cooperation”. The under state secretary outlined the range of subjects at the meeting by pre- senting the primary questions which will come before it and which will com prise the basis of an effort to find unanimous conclusions and recommenda- tions: Which human rights questions are, in fact, to be discussed and whether they should be analyzed more thoroughly? Is there an order of priority among them? How do the actions of various countries in human rights questions promote secu- rity and cooperation between countries? How is the attitude of a country toward human rights reflected in its rela- tions with another country? What are those legally justified means by which a state can interfere in the human rights conditions and certain problems of another country? Do human rights questions reflect other problems between countries, and should the meeting, therefore, debate other questions in addition to human rights questions? What kind of conclusions and recommendations can the meeting reach an agree- ment on in strengthening the observance of human and basic rights and in pro- moting the development of the CSCE? Under State Secretary Tornudd stated that human rights values have remained as before so that they should be respected and taken into consideration "regard- less of other factors in the international situation”. 25 "If there is tension between two states, they should not for this reason be more critical of each other's human rights conditions,” stated Dr. Tornudd and turned the mirror around by stating: “If especially close and good relations exist between two states, they should not be indifferent to each other's possible human rights violations,” he pointed out. Newspaper Backs Envoy's Stand Helsinki HELSINGIN SANOMAT in Finnish 11 May 85 p 2 [Editorial: “Finland on Human Rights"] [Text] Under State Secretary Klaus Tornudd delivered a straightforward and elegant speech on Finland's behalf at the opening of the human rights confer- ence in Ottawa. He also proved as incorrect the suspicions that super power policy tensions on the subject would force Finland to adopt the lowest possi- ble profile at the meeting. Tornudd emphasized that the observance of human rights and basic rights is by its very nature important in relations between countries. If the officials of any country deliberately violate human rights, other countries have a complete right to draw their own conclusions on this and react accordingly. They can protest, reduce cooperation and relations with such a country, give aid to the victims of such violations, and so on. The labelling of such actions as unsuitable interference in the internal af- fairs of another country is an untenable argument, emphasized Tornudd. It has been clearly defined in the UN Charter and in the resolution of the CSCE what noninterference in internal affairs means. Peaceful reactions to a concerned expression of opinion are according to Tornudd certainly justified when human rights have been deliberately violated. As Tornudd points out, whether such conduct, in fact, promotes a better obser- vance of human rights is yet another question. Frequently, it could be more prudent to try to accomplish improvements through quiet diplomacy or through internationally established channels. Concern for human rights should also not be tied to fluctuations in the international situation nor should they be used to beat the drum more forcefully when relations are tense between the countries concerned. In the West the human rights debate is primarily directed at political and civil rights, in the East, for its part, it is directed at economic, social, and cultural rights. Tornudd pointed out justifiably that the full enjoyment of certain human rights is impossible if other rights are not fully respected. In CSCE-countries there is still room for improving people's basic rights, which include, for example, the right to a livelihood and life. The latter mentioned right is overshadowed by capital punishment, which is in effect in the USSR and the United States as well as in some other CSCE-countries and the elimination of which Finland, naturally, supports. 10576 26 CSO: 3617/113 JPRS-WER-85-053 17 JUNE 1985 POLITICAL GREECE KKE'S REPORTEDLY TRAPPED BY PASOK Athens I KATHIMERINI in Greek 15 May 85 p 6 /Article by Giannis Agorianitis/ /Excerpt/ The way the correlation of political forces has been shaped today (ND and related parties equal to PASOK), the only way out for the Movement to succeed is raiding the two communist parties, picking up, let us say, 300,000 votes of the approximately 900,000 that they had obtained in the 1984 Euro-elections. With such a transfusion PASOK would be able to compensate for the loss of its followers to ND, namely some 150,000, and would fight with it for first place in the 44 percent range. In this case, the two communist parties would fall to the 10 percent range, from the 15 percent it had in the 1984 Euro-elections, while the two big parties would obtain about 88 percent of the electorate. The above estimates, of course, do not claim to get an award for originality. Moreover, no one doubts that PASOK has done, is doing and will continue to do all it can to lessen the electoral strength of the traditional Left. The peculiar thing is that the leaderships of the two communist parties, with the policy they are following, are doing nothing or almost nothing to prevent PASOK from tearing them to pieces. And the question is why. Varnalis somewhere describes how the jungle natives catch monkeys. He writes that they place two jars with narrow necks at a spot in the forest. They then put a nut in each jar. The monkey puts his paws into the jars and grabs for the nuts but then cannot remove them because they will not pass through. To free itself it must drop the nuts but it does not do so. Thus, it is caught. If this description by Varnalis brings to mind the position of the two communist parties in view of the coming elections so much the worse for them and their leaders. PASOK skillfully placed the nuts in the jars. The leaders of the communist parties grabbed them and are holding on to them tightly and now they cannot free themselves. One of the nuts is the fear that as soon as the communists go out and denounce the "socialism" of Mr Koutsogiorgas they would be criticized for playing the game of the Right (exception: Theodorakis and the 116). In Greece, anything can happen sometimes. But that the leftists, who in the past were in danger of being executed over a signature (many were executed), would reach the point where they would ask 27 for a certificate of ideological purity from the socialists of PASOK, that is something that no one could have imagined. And many did not expect that after so many mistakes, acknowledged or not, the communists (both the orthodox and restorative, especially the latter) would once again fall flat on their faces for traps laid. The other nut is the "bugaboo" of the Right, and indeed of the 1950's decade against which PASOK waged a holy war.... Older people remember that on the eve of every election one or two newspapers of the Right would put on their front page photographs of corpses of the December /1944/ events to frighten the centrists and to dissuade them from going more to the - left. After 30 years PASOK is repeating this "pretty" tactic reminding the leftists of the deportations, prisons, dry islands of exile, social conduct documents..... All of these things were abolished by...PASOK and....they will crop up again when ND comes back to power. The communist parties accept the moral principle of this tactic and do not denounce it (exceptions: Messrs Androulakis and Kotzias). It is rather obvious that the leadership of both communist parties feel great embarrassment over the fact that their electoral interest and the ensuring of their active presence in the political arena coincide with the possible victory by ND. As far as party members are concerned, something like this would not be that peculiar since quite a few of them are having a difficult time today making a clear distinction between ideological consequences and personal accommodation. One would be able to understand the reason why these party members do not go out searching (the struggle has entitled them to this). Does the same, however, hold true for the leaderships that have the responsibility for the fate of the socialist movement in the country? If, indeed, it does not hold true, then they should have declared straightforwardly that even worse than the possibility of ND's winning the elections they consider the ill treatment given today by PASOK to the concept of socialism in Greece. This concept the communist parties supposedly have a responsibility to prctect from destructive and malicious imitations (otherwise they haw no reason for existence). The danger for Greeks hearing about socialism and then taking precautions about deceit, having in mind the PASOK experience, does exist and the communist movement will disappear if it does not react in time. It is characteristic that the only difference between PASOK and the KKE that Mr Kh. Florakis found to stress during his television interview was Mr Papandreou's inconsistency with regard to the EEC, NATO and the bases. As for everything else, everything was good or almost good. This means that the KKE simply promises a bigger portion of the same --in a socialist vein-- processes, plans, etc. 5671 CSO: 3251/251 28 JPRS-WER-85-053 17 JUNE 1985 POLITICAL GREECE COMMENTS ON KYP PERSONNEL REASSIGNMENTS Positions Listed Athens PONDIKI in Greek 19 Apr 85 p 3 [Text] Big changes in KYP [Central Intelligence Service] occurred over Easter, but (why?) were kept secret by the "green" government. 1. Major General Vasilis Tsangris was removed from the post of KYP sub-chief. He had retired suddenly last year (the decision of the appropriate Screening Council had provoked much talk) and was recalled to active service at the inter- vention, reportedly, of Papandreou himself and remained in his position! A captain at the time the dictatorship was proclaimed, he fled abroad, joined PAK [Panhellenic Liberation Movement] and later, around 1970, took over military responsibility for the organization. After the return to democracy, he returned to the army and the PASOK government appointed him head of YENED [Armed Forces Information Service] where he remained until the middle of 1982, when, by Papandreou's decision, he was made KYP sub- chief under General Politis. On Holy Wednesday, he was suddenly removed and appointed head of Khristos Sartze- takis' Military Office, A new KYP sub-chief has not been appointed yet. The sub-chief's duties are being performed by Brigadier General Mikhalodimitrakis, head of the espionage branch. 2. Of the other changes which occurred, the most important were undoubtedly those involving Colonel Theodorakis and Lieutenant Colonel Fatouris. The former was head of the counter~-espionage branch. The latter was deputy com- mander in the same branch. However, these are not the only replacements. There are others! So we ask: How many, and who, were replaced and, of course, for what reason? Where did those replaced go? Were they discharged or assigned to other units? How much are the changes affecting the government's plans to restructure KYP, 29 and at what stage is this restructuring, which the prime minister had announced would be completed soon? How much of a relation does the Olymbios-Demertzis affair have with the changes? It is said that the government is "debiting" against KYP that: 1. It did not succeed in uncovering what really were Olymbios' connections here and abroad. 2. It “let" him escape to Europe. 3. It was unable to absolutely "prove" the case as regards Turkey's participa- tion and the role played by a diplomat from the Middle Eastern force.... Our earnest entreaty--tell us something! No more silence around KYP! More Changes Athens PONDIKI in Greek 26 Apr 85 p 5 [Text] In an exemplarily correct journalistic manner, MESIMVRINI referred to the publication of a past PONDIKI about the changes in KYP, noting the source and adding a list of (their own) other information, according to which: 1. The KYP chief of staff, Kallias, was promoted to major general and transferred to another service. His position was taken by Brigadier General Mikhalodimitrakis yitho wee: repiécedm hiry Girkimel.: Kirt this: 2. The director of the espionage branch, Colonel Theodorakis, will be replaced (probably) by Colonel Alexakis. 3. The staff manager, Rambatzikos, was discharged with the rank brigadier general and Colonel Atzalakis took over his position. 4. The commander of the Salonica echelon, Brigadier General Spirigiounis, the deputy commander of communications, Colonel Konstandelos, and the commander of logistics, Colonel Xanthos, were discharged. Is it so? 9247 CSO: 3521/248 30 ee ee re ee - ~- JPRS-WER-85-053 17 JUNE 1985 POLITICAL ICELAND FOREIGN MINISTER REPORTS TO ALTHING ON FOREIGN AFFAIRS Reykjavik MORGUNBLADID in Icelandic 3 May 85 p 36 [Article: ""Nations of the North Atlantic Have Similar Interests in Fisheries, Marketing and Security Issues,' says Geir Hallgrimsson in a Foreign Policy Speech" ] [Text] Foreign Minister Geir Hallgrimsson spoke yesterday before both houses of the Althing on drafts of Althing re- solutions for laws concerning United Nations Law of the Seas issues. He also spoke about his annual foreign affairs report that has been recently delivered to the Althing and which has been previously discussed in detail on the Althing pages of MORGUNBLADID. Foreign Minister Hallgrimsson provided a frank discussion of major foreign policy issues. His discussion removed misunderstanding although it perhaps has given rise to disagreement and dissention. Super Powers Begin Negotiations Again Foreign Minister Geir Hallgrimsson said, among other things, in his speech that the most important event with regard to the evolution of international affairs is the decision of the super powers to sit down again at the negotiating table on mutual armamants limitations, negotiations given up by the Soviets in November 1983 account of disagreements on riuclear missiles. The SS-20 missiles of the Soviets now number over 400 with over 1,200 war- heads. NATO countires waited four years with their countermeasures. The foreign minister said that great importance must be assigned, in negotiations with the Soviets, to achieving mutual disarmament without weakening the security of those countries which are based upon democracy, parlimentary democracy and the rights of the people. Independent Evaluation of Our Defense Interests Geir Hallgrimsson laid emphasis on the need to obtain intelligence in all areas relating to defense and security matters so that we can make an inde- pendent evaluation of our defense interests. The proposal for a special Office of Defense within the Icelandic Ministry of Foreigh Affairs is a step in the right direction. 31 The most important tasks of the new office will be in the area of carrying out the defense agreement between Iceland and the United States, military and military technological issues relevant to the gathering of intelligence and research, participation in the business of the NATO Military Affairs Committee and likewise providing information and advice to the government and maintaining connections with the Civil Defense Council and the Icelandic Coast Guard. Ocean Bottom Rights A clear effort is being made to secure Icelandic rights to the ocean bottom beyond its economic jurisdiction. The situation is now such that Great Britain and Ireland have demarcated their continental shelf in such a way that the Hatton-Rockhallarea falls within their continental shelf boundaries. The Faroese Islands and Denmark think the the region is a natural continu- ation of the Faroese Islands and should fail under their jurisdication. On the other hand, Dr Manik Talwani, adviser to the Icelandic Government for geophysics, thinks that Great Britain and Ireland are cut off from the region called Rockhall-square and that the depths of the Faroese Sound, south and southeast of the Faroese Islands set limits to their demands for rights in the area. Iceland can, on the other hand, trace its continental shelf to the area, without coming into conflict with the continental shelf portions of other countries. The government thinks it right that the continental shelf of Iceland be demarcated with the aforementioned views in mind and such a demarcation will soon be published. The issue will later be followed up in accordance with international law. Capelin Fishing Efforts to achieve an agreement on capelin fishing in the areas of Iceland, Jan Mayen Island and Greenland have continued. The matter was discussed in detail at a meeting of Iceland, Norway and representatives of the Greenland Administration. Little stands in the way of agreement, although it is difficult to tie up all the loose ends. Iceland-Greenland The minister laid great emphasis on the cooperation of the nations of the North Atlantic: Norway, Denmark, the Faroese Islands, Iceland, Greenland and Canada, since they all have common interests in the area in fisheries protection, fisheries, marketing and, last but not least, security matters. Hallgrimsson spoke also about Icelandic and Greenland cooperation in the area of communications, fisheries and marketing and about current proposals concerning the arrangement of the cooperation of the Icelandic and Greenland governments. Ambassador in Japan The minister also spoke about foreign trade, something of major importance for the Icelandic economy. The importance of Icelandic foreign trade may be judged from the fact that exports of wares and services were 50 percent of national production last year. The role of Icelandic diplomats in this is growing. Halgrimsson noted in this connection the cooperation with the industrial exports center and likewise the need to establish new embassies-- and mentioned in particular the establishment of an Icelandic embassy in Japan, something that could be of real use in international trade. Much Discussion There was much discussion of the report of the Foreign Minister and many participated. The Foreign Minister was asked various questions. The Althing pages of MORGUNGLADID will soon be going into these questions and the answers of the Foreign Minister in detail. 9857 CSO: 3626/35 33 JPRS-WER-85-053 17 JUNE 1985 POLITICAL ICELAND SURVEYS OF YOUNG VOTERS INDICATE MOVE TOWARD RIGHT New Voters Favor Independence Party Reykjavik MORGUNBLADID in Icelandic 25 Apr 85 p 44 [Text] The Icelandic public opinion research firm SKAIS has recently concluded an opinion poll for HELGARPOSTINN cover- ing the popularity of the various political parties, parti- cularly emphasizing which ones the 19,000 new voters will favor when they exercise their franchise for the first time under the new electoral laws. The results of the poll, which appeared in yesterday's HELGARPOSTINN, indicate that new voters of 18 years of age and older show definite con- servative tendencies, since 47.8 percent of the respondents to the poll said that they would support the Independence Party. Social Democratic Party also seemed to have a considerable following among the young voters, since 19.6 percent of the respondents to the poll said that they would support the Social Democratic Party. The Social Democratic Alliance received the votes of 13 percent of the respondents, the People's Alliance 8.7 percent, the Progressive Party 4.4 percent, the Women's List 4.4 percent, other candidates 2.1 percent. It was also noteworthy that 29.7 per-ent of the respondents were undecided as to party affiliation and that those who intended not to vote or to turn in a blank ballot amounted to 16.5 percent. Only 3.3 percent declined to respond. According to this opinion poll, the Independence Party will end up with 26 MP's, the Social Democrats 14 MP's, the People's Alliance 8 MP's, the Progres- sive Party 7 MP's, the Social Democratic Alliance 4 MP's and the Women's List 4 MP's. Student Poll Shows Similar Results Reykjavik MORGUNBLADID in Icelandic 25 Apr 85 p 4 [Text] According to an opinion poll conducted by sociology students among other students at the college preparatory high school in Reykjavik under the supervision of the school 3s sociology teacher, the Independence Party received 34 the support of 49.35 percent of the students, the Social Democratic Party 13.85 percent, the Social Democratic Alliance 11.45 percent, the People's Alliance 9.95 percent, the Progressive Party 8.35 percent, the Women's List 4.65 percent and the Men's Party 2.4 percent. . The survey -’ : ed 165 students, 91 girls and 74 boys. Of the respondents, 57 percent said they were interested in politics; those interested in politics were distributed by sex such that 38.46 of the girls indicated political interest, as contrasted with 77 percent of the boys. Only 7.35 percent of those polled said that they took any active part in politics, although 52.63 percent of those polled thought that they knew enough about Icelandic politics to be able to make informed choices in an election. Of those polled, 47 percent indicated that their mothers voted for the Independence Party, while 51.2 percent indicated that their fachers voted for the Independence Party. Respondents indicated that 12.38 percent of their mothers voted for the Progressive Party, while 12.95 percent of their fathers voted for the Progressive Party. One hundred percer. of the giris who were polled thought that women ought to play an active part in politics; 90.54 per- cent of the boys were of the same opinion. However, only 38.9 percent of those polled thought that a slate designed particularly for women had a right to exist in the elections, whereas 55.9 percent did not. Of those polled, 70.8 percent thought that the current chairman of the Social Democratic Party, Jon Baldvin Hannibalsson, was successful in increasing the Social Democratic Party's following. Only 40 percent said that they supported the current government, while 60 percent said that they opposed it. Sixty- seven percent said that they were opposed to the lowering of the voting age. The sale of alcoholic beer at nationalized liquor stores was favored by 81.45 percent. Iceland's continued membership in NATO and the continued presence of the defense force here in Iceland was supported by 57.1 percent. Jon Baldvin Hannibalsson achieved first place in the student opinion poll as the politician the students found most admirable; he received 35 votes. David Oddsson was in second place, with 23 votes. Steingrimur Hermannsson came in third with 21 votes. Albert Gudmundsson came in first as the politician that the students found least admirable, to the tune of 38 votes. Hannibalsson was in second place on that list, with 33 votes. Ragnhildur Helgadottir was tied with Hannibalsson, also receiving 33 votes. Paper Comments on Youth Polls Reykjavik MORGUNBLADID in Icelandic 27 Apr 85 p 3z [Editorial: "High Popularity Among Young People"] [Text] Whatever else happens, it has been made clear that there will be rural elections held in about a year's time, in May 1986. At that time, the new law will go into effect lowering the voting age to eighteen. This means that six new age brackets will be voting for the first time in the upcoming city and 35 rural elections. Politicians, therefore, will have the task ahead of them of keeping these young people particularly in mind in the coming months. On 25 April the results of two opinion polls were cited here in MORGUNBLADID, in which young people in particular were asked about their opinions of the various political parties and which ones they intended to support. One was conducted for HELGARPOSTINN and the other at the college preparatory high school in Reykjavik, under the sponsorship of the sociology department there. Whether we are talking about students in particular, or with young people in general, the results have been the same. The Independence Party has turned out to be in the lead, showing a 49.35 percent support in the high school and 47.8 percent in the poll conducted for HELGARPOSTINN. These results are worth noting, as well as being consistent with what is hap- pening in our neighbor nations--young people are showing their desires to support those political forces that stand for the freedom of each individual to tackle present and future tasks without the interference of busybody govern- ments. It is of the utmost importance that the Independence Party not fail the trust that the young people have placed in it and its policy of individual freedom. 9584 CSO: 3626/34 36 JPRS-WER-85-053 17 JUNE 1985 POLITICAL ICELAND BRIEFS VOTERS PREFER HANNIBALSSON IN POLL--According to the results of an opinion poll printed in the newest edition of HELGARPOSTINN, the Icelandic voters would prefer as our country's leader Jon Baldvin Hannibalsson, chairman of the Social Democratic Party. Thorsteinn Palsson, chairman of the Independence Party, came in second place, and Prime Minister Steingrimur Hermannsson was third. Eight hundred people were telephoned in the opinion poll, and asked the fol- lowing question: "Which MP or minister do you think would make the best leader for our country?" The people polled were asked to name one, two, or three names, in order of preference. A total of 385 of the people polled, amounting to 52.7 percent, indicated a preference for a specific politician or politicians; a total of 731 individuals consented to make some response to the poll question. [Text] [Reykjavik MORGUNBLADID in Icelandic 7 May 85 p 66] 9584 CSO: 3626/34 37 JPRS-WER-85-053 17 .TINE 1985 POLITICAL NORWAY GRO HARLEM BRUNDTLAND ON LO TIES, CAMPAIGN STRATEGY Oslo AFTENPOSTEN in Norwegian 11 May 85 p 3 [Article by Terje Svabo] [Text] "There is only one person in this country who is really creating crises and that is the prime minister himself. We are not competing with him in this area." This is how Labor Party leader Gro Harlem Brundtland responds to assertions that the Labor Party has not conducted a constructive opposition policy. She maintains that the Labor Party has consistently presented alternative policies. According to her, no opposition party in the history of Norway has shaped its policies with such seriousness and with such credibility in its analyses, economic framework, and prospects for the future. In barely 4 months the Norwegian people will go to the polls and, according to recent surveys, the Labor Party is in a poor position to regain power. As a result, some people have asked what the Labor Party has done wrong. Gro Harlem Brundtland had the following response to AFTENPOSTEN when she was asked what the Labor Party had done wrong. "The important thing is where the Labor Party will be on 9 September. It cannot simply be assumed that the higher you are in the opinion polls in the spring, the greater chance you have to achieve the election results you are seeking. The Labor Party has now spent several months preparing for our national party congress and for the LO (Federation of Trade Unions) Congress, That was a period of internal debate where we concentrated primarily on ourselves and our political program." Greater LO Support "The conclusion of the LO Congress marked the end of this phase, Now we are entering an election campaign with greater support and enthusiasm from LO than in many years. LO and the party are united behind our programs. We have not wasted our time, but used it to prepare ourselves for the 4-month mobili- zation and campaign that lie before us." Then you do not agree with the critics who say that in recent years the Labor Party has spent much too much time criticizing the government and too little 38 time discussing the party's own policies? "No, I do not agree with them. On the contrary, we have spent most of our time working out alternative policies. Never before has an opposition party in Norway shaped its policies with such seriousness and with such credibility in its analyses, economic framework, and prospects for the future,” Alternative "We have presented our policies as alternatives to those of the government, Our policies have been criticized by our opponents on two counts,” "They say that the Labor Party is trying to outbid its opponents and that our party is painting a bleak picture of the situation. Such complaints come to us primarily from the nonsocialist press and especially from the Conservae- tives. That is the way things are in politics. We know what we have spent our energy doing. This is easily documented, Just look through my speeches, those of Gunnar Berge, and our reports on all the major issues in parliament, Then you will see that it would be more correct to say that we have system- atically presented our alternative policies." Thus, you reject the idea that the Labor Party has relied too much on dogmatic slogans and on creating crises? "TI cannot find any dogmatic slogans in my speeches at all," What about creating crises? "When have we done that?" Many people believe that the Labor Party, and especially you, have written some articles along those lines, "Extremely Moderate" "No, no. That is not true. My writings are extremely moderate. No, if you are talking about that, then you must find some other manuscripts, There is only one person in this country who has really created crises and that is the prime minister himself. We are not competing with him in that area." "The Labor Party is simply stating that, in many areas, the government *s efforts are not good enough and that its economic policies must be altered in such a way that the gap between supply and need does not increase. We must be allowed to say this and we intend to do something about these discrepancies, For this reason, we have said that there must be a strong offensive to create new growth in Norway and to give more to the local municipalities and counties, Thus, we differ strongly with the government, which is unwilling to give the municipalities a helping hand," 39 Political Disagreement "We are speaking here of political disagreement, We must be extremely careful in this country not to reach the point where political disagreement is seen as inappropriate, The very nature of democracy is the ability to hold open discussions and set different political priorities." At the LO Congress you advocated appropriating 20 billion kroner for businesses over the next 4 years. Do you expect to be criticized for advocating an economic policy that will lead to a new round of inflation and increased unemployment in the long term? "Yes, of course, I am certain that our opponents will make that claim, The decisive factor for us, however, is that we have worked out the foundations of this policy. We have developed our strategy for business together with economists and representatives of trade and industry. We are confident in the foundation on which our policies are based. They will have positive effects and not the results you mentioned in your questions. This foundation is part of a comprehensive policy for increased growth." You have just under 4 months to become prime minister of Norway once again. How will this come out? Labor's Message "Our message is in our party's platform. I would like to stress the following: we pledge to reduce unemployment to the 1981 level of less than 30,000. This means that 150,000 new jobs must be created during the next term of parlia- ment. We will achieve this by creating 120,000 new jobs. The figure will be reduced by an additional 30,000 by reducing the retirement age and shortening the work week to 37.5 hours. The government's long-term program foresees only 80,000 new jobs. A policy of this type is too defensive." Nursing Homes And Housing "In addition, the number of new nursing home beds each year will be tripled from 500 to 1,500. The number of new openings at daycare centers each year will be doubled to 10,000, Maternity leave will be increased from 18 to 30 weeks. The retirement age will be reduced to 64 years for people currently working and to 66 years in general. Incomes of retired persons will at least keep pace with those of workers. The privatization of hospitals and health- care will be stopped. Young people under 20 years of age will be guaranteed a job or training. Interest rates will be reduced. Home loans will be increased and mortgage terms increased from 30 to 40 years. Home construction will be increased from 25,000 to 35,000 annually. Young people setting up housekeeping for the first time will receive a special loan of 100,000 kroner." Conservative Party chairman Erling Norvik has stated that he will be satisfied if the Conservative Party receives one third of the votes, What result will you see as satisfactory? 40 "We will be satisfied only if we receive enough votes to form a government," Do you believe the Labor Party will manage that on its own? "Our entire platform and campaign strategy are aimed at that goal," It is hardly possible to be more unrealistic than that, is it? "I believe it is," Gro Harlem Brundtland answered. 9336 CSO: 3639/113 41 JPRS-WER-85-053 17 JUNE 1985 POLITICAL NORWAY UNION CONGRESS REVEALS QUESTIONING ON TIES TO LABOR PARTY Oslo AFTENPOSTEN in Norwegian 11 May 85 p 5 [Article by Ragnhild Moy] [Text] An LO (Federation of Trade Unions) Congress that offered no great surprises was recently concluded. But this event takes place only every 4 years, so it is worth noting. In addition, it is undoubtedly the country's most representative assembly and decisions made here will affect most people in our country, in one way or another. This congress was characterized by a higher level of unity, although the attacks on cooperation between the unions and the Labor Party were stronger than in the past, But this coopera- tion is not threatened in any way. Although many want to break the formal ties between LO and the Labor Party, they do not want to make LO neutral, Most realize the necessity of cooperating with a political party in order to implement their key policies. As several speakers pointed out in the debate, however, the time has passed when the Labor Party alone determined developments in this country. The labor movement needs the support of other parties on the left if it is to regain power. Even Labor Party members at the congress stated that the formal relations between the two organizations were disadvantageous. These relations resulted in less freedom for both organizations, they said. But ties between the party and the labor movement are so strong and the tradition so firmly rooted in this assembly that even a proposal for a study for a broad debate on relations with the party was rejected by a large majority. Out Of Step With Members? As a result, some asked whether the congress was out of step with the LO membership. A survey conducted by the Research Center of the Labor Movement (FAFO) showed that 65 percent of the LO members believed, to some extent, that LO was too closely linked to the Labor Party. At the same time, the survey showed that 63 percent of the LO members voted for the Labor Party, It might also be mentioned that 9 percent of the LO members vote for the Conservative Party. 42 Representatives at the congress are not exactly from the grassroots of the labor movement, This may explain why they are sometimes out of step with the membership, Every second delegate to the congress works fulletime for a union. This figure rises to over 60 percent if those who work part-time for a union are included, This was shown by a survey conducted by ARBEIDER- BLADET. The typical delegate is a 45 year old man from the Ostland region who works in the private sector and votes for the Labor Party. About one third of the delegates to the congress are women, but clearly it is still dominated by men. "The congress is still dominated by solid Social Democrats with women in secondary roles," the paper wrote. The debate indicated clearly that the delegates to the LO Congress were well- trained and capable representatives of the organization. There are fewer and fewer unusual statements from the podium. Unlike the speakers at party congresses, the speakers at the LO Congress passed concrete proposals and there was seldom any doubt as to what these proposals meant. Although the main impression was one of male domination, the women made their views known, To be sure, there was not a majority in favor of quotas for women in LO organs, but a resolution was passed instructing the secretariat to provide proportional representation on permanent boards, councils, and committees. A resolution of this type hardly would have passed 4 years ago. "Generally, women's issues were dealt with in reasonable manner at the congress, Quotas for women are only a small part of this, but I am pleased with the resolution that was approved," outgoing LO secretary Harriet Andreassen said, But the more radical women, who stood in the foreground at the congress, had a much rougher time than at previous congresses. Although there were fewer of them before, the atmosphere was much friendlier. Complete rejection of the 6-hour day, which many saw as a women's demand, also must have been a shock to them, but the overwhelming majority of LO members were certainly in agreement with the congress when it voted for a retirement age of 65, with the possibility of retiring at age 60. On this issue, the congress went much further than the LO secretariat had gone in its recommendation. It had recommended a retirement age of 66 with the possibility of choosing retirement at age 62. See Prosperity Threatened One point made clear in the debate, especially in the debate on tariff policy, was that many members genuinely fear that the country's prosperity is threatened, Rising unemployment and cuts in a number of sectors are clearly making many uncertain over the future. This also may have been responsible for the greater unity at this congress, Opposition at this congress was relatively sparse and, as in the past, it came from the extreme left wing. This took the form of opposition to the election 43 of the entire LO leadership. The opposition varied in size from one to five votes. The critics felt that the LO leadership had not gone far enough on a number of important issues, At the time of this congress, LO had its largest membership in history with 762,000 members. The FAFO report showed, however, that LO's share of organized employees had dropped from 84.7 percent in 1958 to 61.1 percent in 1983. It is primarily young people who are abandoning LO, This matter was dealt with seriously in the debate and the congress was clearly determined to stop this trend. This could have been done by distancing LO from the party, but the congress was not willing to go that far. 9336 CSO: 3639/113 44 JPKS-WER-85-053 17 JUNE 1985 POLITICAL PORTUGAL REAGAN VISIT SUCCEEDED BY ‘IGNORING ISSUES' PM160911 Lisbon DIARIO DE NOTICIAS in Portuguese 11 May 85 p 6 [Editorial: "Reagan's Approval" ] [Excerpts] Pleased with the welcome accorded to him, Ronald Reagan observed on his departure that between us everything went "better than anywhere else." So in Portugal the U.S. President encountered the only possible compensation, however insignificant, for the snub constituted by his tour, marked by pro- found disagreements with the U.S. allies in Europe, as was made very apparent at the Bonn summit of the industrial nations' leaders. The U.S. President's statement about his visit to Portugal is therefore entirely justified and could even be considerd a compliment if taken as proof of an actual quality on our party--our proverbial hospitality, which unfortu- nately is often confused with a serious defect, namely, subservience. Reagan's assessment proves less complimentary when one ponders the basic reasons why his visit to Portugal sounded a discordant note within the context of his European tour as a whole. Among other things, one cannot ignore the reasons connected with the immediate situation, in view of the presidential election, whereby one could establish a kind of parallel with what happened in the FRG. Except that neither is Portugal Germany nor is Portugal's Government-~-and particularly its prime minister--deemed to be characterized by close affinities with Kohl's or Reagan's. Therefore one would expect the manifold speeches delivered to reveal equally clearly both the similarities of opinion between traditional allies who hold one another in mutual esteem and the disagreements which cannot fail to exist by virtue of the two countries' specific interests, their particular identities, and the positions that they occupy in the world. On the contrary, Reagan clearly revealed his anxiety to clothe everything in solemn and doubtless well turned rhetoric, liberally peppered with subtle paternalism and quite simply ignoring the specific issues raised by our bilateral relations. As far as the Portuguese side is concerned, apart from the President's speech, which to some extent showed that the fact that we are allies does not necessarily turn us into mere lackeys of the Washington administration, there is little more that can be mentioned as elements that distinguish the two countries’ policies other than the timid references to the Timor problem--cited by Eanes and also by Jaime Gama-~and to Latin America. 45 Even on this latter topic, however, it was not made clear exactly what the Lisbon Government's stance is, since Reagan himself raised doubts when he told O JORNAL that he had "Lisbon's approval" for his policy in Central America, specifically Nicaragua, whereas that policy is diametrically opposed to the arguments of the Contadora Group, which the Portuguese Government says it supports "100 percent." This flagrant contradiction does the Portuguese Government no honor. Unless it is a misunderstanding or, in exchange for an approval of personal domestic strategies, Reagan has allowed himself improperly to arrogate an approval for his own strategy. CSO: 3542/174 JPRS-WER-85-053 17 .TINF 1985 POLITICAL PORTUGAL DO AMARAL EXPOUNDS PRESIDENTIAL CAMPAIGN THEMES PM211308 Lisbon DIARIO DE NOTICIAS in Portuguese 27 Apr 85 p 3 [Unattributed report: "Freitas do Amaral: Crisis Will Be Overcome By Hard Work and Good Government" ] [Text] "The country's economic and social situation is one of serious crisis. The state is burdened by debt, the nation is bankrupt, and the Portuguese people are poor and divided," Freitas do Amaral said yesterday, announcing his candidacy to the presidency of the republic. According to the new candidate the chief of state “must say 'no' to all this and avert a decline." Explaining that the crisis can be overcome by means of "great determination, hard work, and good government," Freitas do Amaral said that "it is a patriotic duty to submit solutions for national regeneration." The former prime minister of the Democratic Alliance government said he remains “loyal to the ideals and the political blueprint of social and state change for which I have always fought, especially in 1980, with Francisco Sa Carneiro and Adelino Amaro da Costa." Freitas do Amaral said he wants to “return to these ideas and to carry forward this blueprint," intending to struggle for the "defense of democratic free- doms, for political stability, for the country's economic modernization, and for genuine social justice." The former Social Democratic Center Party leader said he wants to “see the Portuguese people more united, and a progressive and successful Portugal." Freitas do Amaral said he is not a “party" candidate and also that his candidacy "is national, independent, and nonpartisan." "My direct dialogue will be with the Portuguese people," he added. The former chairman of the European Union of Christian Democratic Parties said the coming presidential elections and EEC membership are a challenge "to Portugal's history," since, in his opinion, we are living in “an era of very tough international competition and we must fight with all our strength to avoid being crushed." 47 According to Freitas do Amaral there is "a domestic climate of great pessi- mism" and "we must restore confidence in the future." He also mentioned the “moral climate of dejection and doubt" within which "we must contribute vigorously to elevating our homeland." He ended with an appeal to "all moral, social, and political forces wanting a thorough change of an ethical and emancipatory nature" and to "all Portuguese people to unite in a grand people's movement" in support of his candidacy. "I will struggle happily for victory," Freitas do Amaral said. CSO: 3542/174 JPRS-WER-85-053 17 oTINF. 1985 POLITICAL SWEDEN VIEWS, INFLUENCE OF CHRISTIAN PARTY EXAMINED Stockholm DAGENS NYHETER in Swedish 12 May 85 p 14 [Article by Ake Ekdahl: "Riksdag a Mirage for Alf Svensson--the Brand of Intolerance Will Be Washed Away"] [Text] Jew or atheist, avowed Christian or homosexual-- all are welcome in KDS [Christian Democratic Party]. Be- fore the election party leader Alf Svensson is trying to erase the old labels from his party. The Christian Democratic Party will this fall be the seventh party in the Riksdag, but the picture of KDS as a party darkly controlled in the name of Christendom is deeply rooted. This becomes most clearly visible in opposi- tion to abortion. When Bjorn Gillbert said that the Pentecostal Church people threw out the frienas of the environment from KDS, and when Liberal Party leader Bengt Westerberg wrote that the policy of KDS is intolerant, they stepped on Alf Svensson's most painful toes. The KDS leader is afraid of two things: - partly because of the monopolistic tendency of Christian norms and judg- ments in his party, KDS would be seen as the party of interest for a small group of people with a special view of society, - partly that KDS is marked as a party controlled by coercion, guardianship and inflexibility. With one foot on the threshold of the Riksdag, a goal which has been a mirage for Alf Svensson for 10 years, he is fighting energetically for a more secu- lar image for his party. He wants to be accepted as the leader of a liberal party with Christian values but without the ballast of moralism and a dog- matic program. This is a difficult balance. On the streets and in the marketplaces the mes- sage has gone out that KDS has by no means entered a pact with God to win the 49 fall election, but in party meetings the party leader stands eye to eye with deeply religious Christians, often older, who want to hear God's word even in a political message. Right Wavelength Alf Svensson knows that the Christian inheritance from the party's founders, Lewi Pethrus and Birger Ekstedt, is Loth an opportunity and a burden for KDS. Just now he is devoting a large part of the election campaign to calibrating his party on a wavelength which sounds good to the ears of both the loyal and avowed Christians and the broad group of voters who perhaps sympathize with more permanent norms, order in the schools and support for the family nucleus. But many hesitate when confronted by the party name. The KDS leader is thorough in his work, and last year he wrote an entire book about what he thinks and believes about his party's place in society. A sort of a white paper. If people consider KDS condemnatory, then we have made a mistake, he admits. Opposition to abortion is not a no to abortion, it is a yes to life. Defense of the housewife is not a no to women's liberation, it is devoted to the benefit of the weaker part in a relationship, philosophizes Alf Svensson. At the same time he is privately coquettish about being married to a divorced person. He is surely living proof of tolerance and broadmindedness. When a listener at a meeting in Vaxsjo recently stormed against the KDS leader for depravity and demanded more intercession and less pleading for peace, the hairs rose on the back of Alf Svensson's neck. Just such talk can drive away the ordinary voters. As examples of good and well-behaved Christian living he speaks of Carola Haggqvist, Queen Sylvia and the kneeling shipyard workers outside the factory gates in Gdansk. They represent the new Christian values which exist in Sweden today. Protest Movement KDS was formed fully 20 years ago as a protest movement against lack of standards, slackness, pornography and ethical decadence. It was the sex liberals of the 60's and the attacks on the family as an antiquated way of living together which created the party. KDS quickly gained 1-2 percent of the voters, but never grew larger. Now the party has reluctantly and indirectly acknowledged the commonality within bloc politics, and nobody says that the phenomenon called "comrade 4 percent" which saved VPK [Left-Party Communists] several times could not help KDS at the other end of the scale. 50 When the son of the Pentecostal pastor took over the leadership of the party in 1973 and started his mission from Granna and Jonkoping, KDS acquired an excellent salesman of Christian values in a political package with a red and green ribbon. He is among the country's foremost opinion shapers, and he spends a lot of time explaining why a Christian party is needed, most often in a dispute against the old Riksdag parties. Now and then an internal debate breaks out over the party name, but now the KDS name is considered to be in step with the times. It would be easier to start a Christian party today with the help of pop- ular musical artists. A Christian political party is not well known in Sweden, but well established abroad, Alf Svensson used to explain to his young listeners during his visits to schools. Christian parties are not only the German CDU and CSU with Franz Josef Strauss. There is a Christian Democratic International with 53 member par- ties, and altogether they are larger than the Social Democrats. Costume Change The KDS leader prefers to be compared with the brother party in Norway, a more liberal party with broad appeal within the electorate. Alf Svensson is often regarded as somewhat of an unsophisticated person. With a strong voice, good story telling talent and platform manner from his years as a teacher, he gets the young people to listen. He comes in informal leisure shoes and casual sports jacket to outdoor meetings, but in a dark blue suit with tie to the evening meetings of older people in the IOGT hall or other meeting place. The costume change seems cold, American and speculative. But it fits well with Alf Svensson's goals. He wants to be in step with the party, as much with the youths in high school as with the old people's movement from the Free Church who were present in Lewi Pethrus days, and who think a meeting in a barn is a rare treat. Before a meeting he appears intense, repeating his speech to himself. After- ward he is open and relaxed. There is applause for family policy, defense for those who work at home and demands on the schools. As are most experienced speakers he is best away from a manuscript. Meetings sometimes end with meditation and prayer. Light and flowers on a nicely decorated table and a collection for the party treas- ury are often natural parts of the meeting routine. 51 As at a revivalist meeting, now and then one hears spontaneous exclamations of approval from the audience when the leader of the party speaks well. In the tour bus between meeting places Alf Svensson is mostly a future member of the Riksdag. Many years practice in adversity has given him a routine. He will have no beginner's difficulties on the Riksdag speaker's platform. Celibacy Line When the new Liberal Party leader is mentioned, one can detect a suggestion of contempt. "Intolerant," he repeats Westerberg's complaint. Just so nobody will dare to think otherwise and contradict. In the newspaper, one of the 10 he reads each day, he sees that Ulf Adelsohn has visited Pentecostal pastor Stanley Sioberg. "See there, now even Adelsohn is talking about prioritizing marriage. So we have done a little good in any case." While he reads the different editorial pages he drinks coffee from a large, flowered thermos. KDS and the Center Party have one thing in common: they run on high-octane strong coffee. In the homosexual debate Alf Svensson has joined Archbishop Werkstrom's celibacy line, but only privately. The party should not get involved in how people live together. He is careful to show that KDS does not discriminate against anyone, and rejects any claim of Christian monopoly. Through the years he has collected answers to all accusations and suspicions against KDS as unreliable. One does not know whether it is bird or fish, nonsocialist or socialist. The answer is long, well-formulated, and most often says that the difference between KDS and the other parties is that the others talk about "Christian questions," while KDS speaks of Christendom as the basis for the entire society. Thus one does not need to state an ideological position on a scale of right to left, or to fight for voters with slogans and labels, said Alf Svensson. 9287 CSO: 3650/243 52 JPRS-WER-85-053 17 .TUNE 1985 MILITARY DENMARK GOVERNMENT WISH TO BUY SUBS FROM NORWAY MAY SPARK DEBATE Copenhagen BERLINGSKE WEEKENDAVISEN in Danish 2-9 May 85 pp 1, 16 [Article by Solveig Rodsgaard] [Text] Defense Minister Hans Engell will go to the ll-man committee with a plan for Denmark to buy three used submarines from Norway. But since the defense compromise contains only a leasing agreement this could signal the start of another violent discussion between the government and the Social Democrats. Submarines in the Danish defense structure will set off a new political crisis between the government and the Social Democrats. The defense agreement states specifically that the armed forces must replace aging subs of the Delfin class with leased subs, but now the government wants to buy three Norwegian submarines instead. Defense Minister Hans Engell will soon present the defense agreement's supervisory committe, the so-called 1l-man committee, with the plan which according to the minister can be held within the defense agreement's economic framework of 400 million kroner for leased submarines. The defense minister says he is quite aware that the defense agreement con- tains a provision for leasing submarines and that the purchase of the Nor- wegian submarines will thus require an agreement among the compromise par- ties. But he stressed that Norway wants a sales agreement with Denmark and that such an agreement would be both economically and technically more suit- able than a leasing arrangement. Incidentally he did not think a purchasing agreement would be outside the framework of the compromise. The agreement will cover the period from 1985 to 1989. The government's plan is based on the assumption that Denmark and Norway will join forces to rebuild and modernize three Norwegian subs of the Kobben class, after which Denmark would buy the three subs. Part of the modernization will be done in Norway and part in Denmark and for the work that is done in Norway the government expects to include Danish firms as subcontractors in a number of electronic areas, such as the pro- duction of torpedo tubes, for example. 53 Defense Agreement The leasing provision in the defense agreement that was reached in June 1984 between the government parties and the Social Democrats was a compromise. The Social Democrats wanted submarines removed from the Danish defense system or at least did not want Denmark to build new subs in the future to replace those that have worn out. Today Denmark has only four subs because the first of the three older subs in the Delfin class has already been "phased out." The two remaining subs will go in 1986 and 1988 respectively. That leaves two subs of the Narhval class, but with the purchase of the three Norwegian submarines the strength would be up to five again in 1989. The government parties feel that subs should continue to be part of our de- fense and in the negotiations leading to the defense agreement the govern- ment wanted to include the construction of three new submarines that could be phased in as the subs of the Delfin class were phased out. This ended in a compromise in the defense agreement, namely that the replacements would be handled through leasing arrangements and the sum of 400 million kroner was earmarked for this purpose. In.connectionwith the compromise in the defense agreement the parties to the agreement decided that an advisory and analytical group under the defense system should look into the problems and opportunities involved in continued Danish submarine production, a study to be made over the next couple of years. The agenda for the advisory and analytical group is scheduled to be set when a new defense agreement is negotiated to replace the present one which runs out at the end of 1987. In addition to analyzing the need for a Danish submarine arm the group will also examine the merits of using F-16 planes for surveillance, land-based missiles for targets at sea and naval helicopters along with the prospects for replacing the Centurion tanks. The chairman of the group is the head of the Defense Research Service, civil engineer V. M. Guntelberg. Submarine Types Submarine leasing possibilities were first investigated in West Germany where three subs of the 205 class which were launched in the period 1961-68 could be leased. But in connection with Defense Minister Hans Engell's visit to Norway in August 1984 the Norwegians said that Denmark could take over a number of Kobben class subs. This line was put in service in the period 1963-67. The Narhval model in Denmark was launched in the same period while the Delfin model was put in service in the period 1956-63. The politicians have known for a long time that the Delfin type would be completely phased out in 1988. The question was discussed back in the ne- gotiations for the 1982 defense agreement. At that time there was agreement between Defense Minister Poul Sogaard and the nonsocialist parties that re- placement construction should be discussed, in other words the construction of new subs. But discussions on the matter were not concluded in the period covered by the agreement and in September 1982 the government changed hands. After that the submarines became a very big and very sensitive topic in the context of the negotiations on the new defense agreement that went into effect in June 1984, Submarines Important The defense minister stressed the government's wish to retain the submarine arm in a conversation with WEEKENDAVISEN. "We have estimated that a new submarine would cost around 500 million kroner, which means that three new subs would cost around 1.5 billion. But the Social Democrats--and primarily their defense policy spokesman, Knud Damgaard--did not want to retain the submarine arm. That is why the de- fense agreement provided for a leasing arrangement for three subs so that the number of subs in 1988-89 would be back at five. That was a political compromise and from the government parties" point of view the positive as- pect of it was that it allowed us to retain the submarine arm which we re- gard as vital. There will be new discussion on submarine construction after the advisory and analytical group has submitted its report. "When one has a submarine fleet it means that one has special expertise and once the subs have been cut in number or totally eliminated it will be very difficult to acquire this expertise later on. It costs over 1 million kroner to train a submarine commander. That is not an enormous amount of money when one bears in mind that it costs 10 million kroner to train an F-16 pilot. But even so the training costs are high." Social Democrats The defense minister and Knud Damgaard have long disagreed on the value of submarines to the defense system. Knud Damgaard feels that submarines have played out their military role in the Baltic Sea. In the current debate he has said that if the Russians come it will not be by ship across the Baltic but by air. Knud Damgaard used that argument in August 1984, a few months after the de- fense agreement was reached, when he wanted to take the money from the sub- marine account to pay for a deficit in NATO's infrastructure program. The idea was rejected. Knud Damgaard favors a defensive armed forces with submarines in the front line. He also feels that technological developments have made the subs outdated and that they are too easy to detect and destroy because of the shallow waters in the western part of the Baltic. Government The defense minister has constantly emphasized the importance of submarines in the Danish defense system and the minister has referred several times to the fact that the Defense Research Council does not feel that any alternative 55 with a similar effect can replace submarines unless a considerably higher price is paid. The minister also says that the Danish submarine debate is being followed with interest in other countries and that among Denmark's allies there is "total amazement that a Danish submarine fleet could be questioned." In an answer he gave in Folketing's interpellation period recently the min- ister pointed out that "just in our immediate vicinity there are new con- struction or modernization programs in the conventional submarine fleet at a cost of more than 34 billion kroner. "The Defense Command therefore concludes that the countries in question believe that even large investments in a conventional submarine fleet will pay off in relation to alternative weapons systems and that there is no doubt about the superior possibilities for using submarines or of their effectiveness in modern warfare. "I share that view and it was most recently reinforced during my visit to Sweden where neither politicians nor military people felt that technical developments in the Baltic Sea had changed matters as far as the use of sub- marines there is concerned. The estimated lifetime of the Swedish subs that are being acquired is at least 20 years." With regard to advanced defense Hans Engell said that the philosophy of cur- rent defense strategy is that defense should be versatile. "This means that we would place the submarines farthest out, surface units closer in, then mines and the army on shore and airplanes overhead. This helps provide depth to the Danish defense. And in contrast to this we have the Social Democratic concept of a defense closer to the coast." Political Experts The defense minister added that the whole debate on submarines is a techni- cal one to a large extent. "The discussion stems from the way in which we use our defense resources. Danish defense has always had limited resources and this will probably con- tinue to be true in the future even if we hope for improvements, of course. But at the same time we are experiencing sharp increases in the cost of defense materiel in connection with technological developments and this of course means that politicians must set priorities and do so correctly. In the past military experts decided whether we should have one type of weapon or another while the politicians set the economic limits. Today the defense debate has developed to the point where politicians also intervene and dis- cuss types of weapons. This means politicians have moved further in on the territory of the military experts than used to be the case. In many areas this has been a positive development but it also has negative effects because politicians act as experts in an area where they are not experts. And this means that politicians must really acquire detailed knowledge of these things." 6578 CSO: 3613/152 56 4 17 TINE. 1985 MILITARY FEDERAL REPUBLIC OF GERMANY DEFENSE AGAINST COMBAT HELICOPTERS STILL PROBLEMATIC Bonn WEHRTECHNIK in German Apr 85 pp 24-30 /article by Wolfgang Flume: "Who Combats the Combat Helicopters?"/ /Text/ The Warsaw Pact has some 900 combat helicopters available; in the next few years there are plans to intro- duce a new combat helicopter, designed primarily foraaction against helicopters. NATO must take account of this addi- tional air threat and for this reason it improves and strengthens weapon systems sutiable for defense against helicopters. Im. the use of the defensive systems--be they tube or rocket systems, special combat helicopters, or aircraft such as the Alpha Jet or the A-10--good coordination is especially vital so that the weapons will not mutually interfere in action against helicopters. The following article investigates the possibilities of fighting hostile helicopters and draws on the conclusions of joint Army-Luftwaffe research over the last years which point to possibilities of using the Alpha Jet. It is well-known not only from Caesar's "Bellum Gallicum" that Roman troops in inhospitable Germania always made efforts to go into winter quarters in a timely manner. At low temperatures, ice and snow, campaigning at that time was unthinkable. This is (almost) no longer true, and after the introduction of night sight devices the night no longer offers pause from battle. The ground forces must face an uncomfortable "24 hour campaign day" along with the problem complex it entails, including the need to consider relief crews for combat vehicles in the drafting of future armed forces structure. The threat on the battlefield has also become more varied--the classical direct fire weapons and artillery were joined some 70 years ago by the airplane and some years ago by the helicopter. Both flying systems have become dangerous foes of ground troops on the battlefield by using modern technologies in flight control and target acquisition--it is thus no accident that increased efforts are made to develop, test, and introduce defenses against this threat. Even at this age of the initial use of passive, high resolution infrared image devices the use of close air support on the battlefield is quite dependent on the weather--in heavy rain, haze and fog the air threat is reduces since mobile 57 ground targets are discovered, identified, and engaged with great difficulty. Today a clear sight of the target is still needed--it may be more easily obtained by the use of infrared instruments (which are by no means yet available in all aircraft and helicopters.) But even here rain, moisture, etc. has a limiting effect. Even the fire-and-forget rockets will not bring about improvement--before they can be used, the target must first be sighted. Direct line of sight to the target means, however, that the aggressor can be seen from the target, with the advantage that attacking aircraft are usually discovered more easily by active or passive means (especially against the sky) than vehicles on the ground that may be well camouflaged. The defender on the ground should thus have a certain advantage with his modern air defense weapons--tube weapons (with a range of up to 4,000 m, depending on the caliber) and guided missiles (up to 6,000 or 10,000 meters). ‘fhe prerequisites for his, are: --that there is an adequate number of air defense weapon systems available; --flying targets are discovered and identified in a timely manner; --air defense systems have all-weather capability and are designed to engage maneuvering and/or very low flying targets. Meeting these requirements, however, requires considerable technical and finan- cial exertions. And thus it is a question of priority setting in the army that determines to what degree it can be met. The requirement to engage maneuvering targets is already met by the Roland, and is to be achieved in the impending improvement of the Gepard air defense vehicle by an appropriate modification of the fire direction system that up to now has merely been designed to engage straight flying aircraft. The engagement of very low flying targets with radar is even today not quite problem-free and poses severe demands on radar design. Often the only solution consists of switching to optical targeting, but this has a more limited span than radar. Here, too, infrared devices are thus urgently needed to increase engagement opportunities; being passive sensors they are also safe against ECM. The timely acquisition and identification of targets will also be very expen- sive. A modern reconaissance system is needed, something that is really not yet available in Central Europe. A step forward is the Army Air Defense Intelligence and Command System (HFlaAFueSys), currently under development, that will come into being after repeated deletions. It is designed to provide an optimally gap-free aerial survey within a corps area by using several low flying surveillance radars (TUR) with a range of about 30 km, and a few air- space control radars (LUeR) with a range of some 100 km. Target data will be fed to the Gepard and Roland weapon systems so that these will not have to switch on their search radars (which are active and thus treacherous) at all, and their target sensors only shortly before engaging targets. The extent to which the "identification" problem is satisfactorily solved by that system is still problematic, considering the discussions within NATO regarding new, more efficient identification. 58 A Dangerous Foe: Mi-24 Hind The introduction of the HFlaAFueSys is urgently needed, since army air defense must turn to a "new" foe, even more difficult to detect than low flying aircraft--the combat helicopter. In contrast to the German Army's antitank helicopters, essentially meant merely to engage targets on the battlefield where they have to stay over friendly territory for their own protection, the combat helicopter, considering its weight and armaments is a much more flexible weapon system. The Mi-24 Hind is a helicopter weighing about 10 tons, armed with 23mm or 12.7 mm automatic cannon for soft targets and self-defense, 2 to 4 rocket pods with 32 unguided 57 mm rockets each, and 4 antitank missiles. The Hind is almost optimally equipped with modern electronics, including an infrared image device and inertial navigation system. Moreover, Hind with a load of eight soldiers can also be used for commando-type missions in the enemy's rear area. Targets on the battlefield are approached at a height of 15 to 20 meters, using cover offered by terrain. The start of a mission takes place about 20 km from the FEBA in assembly areas, occasionally there is another landing in a waiting area. The helicopters go on missions as teams in line or staggered at about 100 meters above each other. Attack takes place after jumpoff (rapid) altitude gain) at a declination, using the unguided rockets and the onboard cannon. The antitank missiles are also fired at a slight declining angle. After the attack the helicopter immediately veers by 180 degrees in order to possibly engage new targets. Depth of penetration on the battlefield is generally 5 to 10 km, with the helicopters often supported by artiléeryt firevnn the flanks, designed to suppress enemy air defense. With the Hind--and the armed Mi-8 Hip transport helicopter--deep penetrations of up to 100 km are possible for landing of sabotage teams, action against important individual targets such as command posts, bridges, etc. The capabilities make the combat helicopter into a very dangerous foe, especially since the Warsaw Pact has more than 900 Hind and Hip in Central Europe; that number could almost double in the 1990's. Hind missions always take place together with front air assets. Aircraft and helicopters are directed centrally from one command post. This gives rise to deliberations as to the best way to counter combat helicopters. Study: Is the Alpha Jet Suitable? For helicopter defense the army to date can use only the Gepard and Roland air defense systems, as well as the individual Fliegerfaust 1, supplemented by air defense weapons such as machine guns and 200 mm cannon. The Luftwaffe advanced the Alpha Jet, a close air support airplane as something that was available now, not in the 1990's. These considerations of the Luftwaffe--not quite uncritically viewed by the Army--led to joint studies at the initiative of the Chief of Staff, General Wolfgang Altenburg that investigated the total available potential of the armed forces for helicopter defense. The study was conducted in four phases. 59 --Phase I began in 1982 and included troop trials of the Alpha Jet's "visual detection ability." It was found that flying helicopters could be easily discovered and engaged; it was indeed often difficult to shake off an Alpha Jet. The statistical success rate was almost 60 percent, without support from the air defense radar stations. The detection of hovering helicopters or of those concealed on the ground was more difficult, in cases, for example, where the Alpha Jet wanted to re-engage the target after a failed attack. --Phase II investigated the suitability of the Alpha Jet's 27 mm cannon for air-to-air combat (against towed targets). The firing results exceeded expecta- tions, even though most of the pilots conducted air-to-air firing for the first time. The ammunition supply of the weapon, mounted under the fuselage, is supposed to be sufficient for 10 engagements. --Phase III consisted of a course for pilots in helicopter defense. Both Alpha Jet and CH-53 pilots took part, since the CH-53 had been selected as the "Hind model"; in size the CH-53 approximates the Hind; it is broader from the front, but its side silhouette is somewhat similar. --Phase IV consisted of the use of four CH-53s as a "Hind team,"' operating according to Warsaw Pact operational doctrine, during a 1983 army exercise "Militant Liors" and the NATO air force exercise "Cold Fire 83." The four CH-53 flew 12 missions in 4 days, covering some 2,000 km and logying about 11 hours air time. During five of the missions they were attacked by Alpha Jets whose capabilities, and especially, mission accomplishment were studied in this phase. During the missions that range from 15 minutes ton 1 hour and 17 minutes, targets were engaged by the helicopters, sometimes repeatedly. Targets or missions consisted of actions against advancing tank battalions, support of an airmobile operation far forward, area defense of an airborne brigade and helicopter regiment zone, attack on flanks and defensive positions, support during breakthroughs, sometimes far forward, etc. At times the team was detected by Gepard and Roland batteries at the maximum distance (16 km) but often only very late or not at all when the team outflew the air defense. That happened when air defense positions had been previously electronically discovered--thus it is very important that the Gepard and Roland we well camouflaged and not reveal themselves prematurely through their sensors to enemy reconnaissance. In spite of the almost always successful detection of the team by Gepard and Roland, the latter were not always in a combat posture--they were hindered by certain "maneuver artificialities" and were not always in a position where they could have carried out a fire mission. This left only the ground air defense weapons to engage the targets, but these with their maximum range of 2,000 m have only a limited effect. In most missions, however, repeated countermeasures were possible, for example, during deep penetrations during which the team several times came into areas covered by ground force air defense weapons, Gepard and Roland. All told, the team could have been engaged over 25 percent of its flight distance by Gepard and Roland, but sometimes only after ordnance had been delivered, i.e., on the return flight. 60 Detailed analysis of the results of the 1983 army maneuvers must take into account the certain "training artificialities" and--according to one's point of view--either organizational or leadership weaknesses. In this way the results were specific, not to be generalized. More typical results were obtained at the 1984 Army maneuvers "Nimble Hedgehog." The Alpha Jet missions were supportive but sometimes interferring. The air- craft were sometimes called to scramble, sometimes they were flying air patrol and could arrive quickly from their waiting areas. Where an Alpha Jet had been assigned to antihelicopter missions, the Gepard and Roland in the area received only limited fire permission, i.e. the air defense vehicles could fire only after they had optically identified an aircraft as clearly being the enemy. This, of course, severly hampers the defensive efforts. Improvement wiil probably not come before the air space management functions optimally, Alpha Jet missions are announced (or cancelled) to the ground troops in a time:, manner, Identification Friend or Foe becomes more efficient and allows for clear identification (currently it is known that a target is a "friend," but it is not absolutely certain whether it is a foe.) Because of these difficulties the army currently does not want to have the Alpha Jet over the battlefield, i.e., in the zone of action of Gepard and Roland. More valuable and simpler is the use of Alpha Jets in rear areas where the territorial forces have no antiaircraft equipment and only a very limited air defense capability, and on the flanks. There the ability of the Alpha Jet to fight helicopters was proven, there are also adequate mission opportunities for Alpha Jet, since in those areas the Hind finds sufficient targets, including Hawk and Patriot positions, large Luftwaffe radar facilities, etc. Better coordination of anti-Hind action can probably be achieved only after the introduction of the Army Air Defense Intelligence and Command System and better identification means, but even then the simultaneous use of air defense and Alpha Jet is precluded. The command system's joining of the low altitude reports and direction service of the Luftwaffe to an intelligence network should result in a gap-free discovery of combat helicopters, even when Gepard and Roland are not switched on. The Alpha Jet also serves equally well as flying guard over concentration areas of friendly antitank helicopters, but the Alpha Jet is not an unthreatened weapon system. Deep Hind missions can be assumed to have fighter aircraft protection which will threaten the Alpha Jet; in turn, however, the Alpha Jet also can draw on fighter protection. Moreover, the mission readiness of the Alpha Jet is severely limited by its lacking all-weather features--Hinds or CH-53s were able to fly and fight under weather conditions (such as low clouds) where Alpha Jet missions were unthinkable. The fighting ability of the Alpha Jet, especially with a view toward missions against combat helicopters, should increase markedly if the aircraft's equipment is improved. For a start, there are plans to equip the Alpha Jet with air-to-air Sidewinder missiles, but there are also designs to improve its sensors; there are thoughts about a rangefinding radar and infrared image device, image enhancement goggles for pilot--what willultimately be selected depends decidedly on resources allocated. 61 In all, the Alpha Jet is to be considered an additional asset for antihelicopter missions in addition to the army's air defense (and to a certain degree also the weapon systems of integrated air defense). It will be used where gaps are to be covered and when it is not needed for urgent missions in its primary role as a light fighter-bomber. Army Improves Antihelicopter Capability Over and above the introduction of the HFlaAFue system the helicopter defense ability of the army is to be considerably improved. The Gepard and Roland are to be supplemented byan antitank antihelicopter combat vehicle with a range of 500 m against helicopters. This should release some Gepards from helicopter defense duties so that they may be deployed somewhat further back on the battle- field, for example to provide air defense at river crossings. The improvements in the Gepard combat power were already mentioned, the improve- ment in fire direction will be supplemented by the introduction of improved ammunition for the two 35 mm weapons that will have better effect against armored targets (the Hind is armored in its most important areas); eventually it will be equipped with proximity fuses that will increase the Gepard's score (however, with a reduced effect on the target). The Roland is also being modernized. The effective range of the missile could be increased to 8 km. All told, these systems--Gepard, Roland, and the antihelicopter combat vehicle-- could serve to cover about one-third of the battleifled with antihelicopter weapons. It is possible that Leopard 2 will at some time be equipped with a 120 mm anti- helicopter weapon, but it will probably be used only for self-defense. There is also thought of developing special antihelicopter mines. These mines must have’ suitable sensors and their shaped charges or projectiles would be effective at heights of up to 200 m. Such minefields, however, would probably be closed for friendly air movement, even if an identification system would be used. And what about the use of helicopters as antihelicopter weapons? While the Americans and the French want to pursue this path--the French, for example, with the HAP version of the PAH-2, the German Army does not (yet?) see this role. Perhaps this mission will be assigned to the PAH-1l (which is to be equipped with a Stinger) after delivery of the PAH-2, at least, it could escort the PAH-2 during its antitank missions for protection. It is questionable whether it is suited for this, especially in the light of Soviet plans to introduce a new combat helicopter, Mi-28 Havoc, that is primarily designed for fighting helicopters. The Mi-28 is to be equipped with a 23 mm automatic cannon and air-to-air missiles for action against flying targets with speeds of up to 450 km per hour. And How to Fight RPVs? The combat helicopter is a dangerous foe on the battlefield, but it is not the only threat from the air which has been markedly increased by the introduction of new all-weather aircraft and special close air support planes such as the Su-25 Frogfoot. Just as NATO is thinking of introducing armed drones in the 1990's, the assumption must be made that the Warsaw Pact is doing the same. For this reason even now thought must be given to how to fight this quantitatively and qualitatively new threat. Only through improvemeats in protection and passive measures, such as infrared-covering fog, or also with active means? 9240 62 CSO: 3620/348 JPRS-WER-85-053 17 .TUINF. 1985 MILITARY GREECE GOVERNMENT'S NATO POLICIES SEEN DANGEROUS Athens I KATHIMERINI in Greek 13 Apr 85 pp 5, 15 [Article by Evstathios Lagakos*: "The Policy Vis-a-Vis NATO Contradictory. arid Dangerous" [Excerpts] When 33 years ago Greece joined the Atlantic Alliance, no political party, aside from the KKE, questioned the existence of a threat from the north, This threat was clear for the Greek people and its political leaders; for this reason the Plastiras and Venizelos governments exerted assiduous diplomatic efforts to achieve our accession to the Atlantic Alliance and overcome the ob- jections and reservations of certain member countries. The feeling of insecurity was at that time widespread in our country after the establishment of totalitar- ian regimes ir East European states but also because of the stance of our neigh- bors during the civil war. The defensive shield of the alliance, however, dis- solved the fears of a foreign conspiracy and created the climate necessary for the attention of Greek governments to be turned to our country's economic and social development. Since then, several decades passed until the time when, a few years ago, PASOK proclaimed before elections--and continues to maintain at all times--that there is no threat from the north and, therefore, the basic reason for us to remain in the Atlantic Alliance has disappeared. Not only this, but also that, while the sole threat, especially for Greece, comes from the east, NATO refuses to guarantee our country's security as regards this danger. The conclusion from these PASOK assertions is, of course, that Greece must leave the Alliance which does not afford it any security. The fact that, in the four years following elections, the government has not proceeded in carrying out its pre-electoral proclamations does not mean that it has changed its position on this matter. The almost daily attacks against NATO by the pro-government press, and certain well-known statements by the president of the government, justify the view that departure from the Alliance is always one of the basic positions of PASOK which is awaiting, however, the appropriate moment, in time and politically, to drag our country out of NATO. Naturally, the KKE is not standing idle and certainly will make every possible effort to pusi PASOK into carrying out its pre-electoral promises. This effort will undoubtedly become more intense and * E—, Lagakos has served in NATO two times, the first as a member of the Infra- structure Committee in Paris and the second as Greece's Permanent Representative in Brussels. 63 effective if someday PASOK is forced by political developments to rely openly on the KKE in order to remain in power. And Compensation Let us assume that the threat from the north is so indistinct today that it is nearly non-existent. In this hypothetical case, we should examine whether our country's remaining in NATO entails political, economic and other sacrifices which necessitate our country's dissociation. In the political sector, that is, as concerns the effects on our foreign rela- ns tions, our participation in the Alliance does not impede the development of good relations with all the other states, including the eastern ones. This participation does not hinder our independant and multidimensional foreign policy, which the ND governments followed with success. On the other hand, Balkan cooperation and our‘relations with the Soviet Union have developed to a satisfactory degree in the last decade. Nor have our relatians with the non- alined countries and Third World countries, which are excellent, been influenced negativély by our participation in the North Atlantic organization. This fact cannot be questioned and is proof that there are no damaging effects for our country from our participation in NATO. Nor does our participation entail sacrificameand butdens in the economic sector. In this case, the opposite is true. Joint financing by our allies of infrastruc- ture works in Greece--that is, airports, telecommunications networks, fuel con- duits and tanks, radar and other military installations--are translated into many tens of millions of dollars. Aside from the benefit to our economy from the influx of exchange and employment of workers, the importance of these military works for our country's defense is easy to understand. It is natural, however, that our withdrawal from NATO would mean not only the immediate cut-off of this joint financing, but also a reasonable demand by the allies for compensation for these works, which would now be used exclusively by Greece. Moreover, if our country's defense budget is really very high and burden- some, this is owing mainly to the need--which is universally accepted by our political parties--for armoring our country to face the Turkish thre&a¢ not be- cause NATO imposes it on us. Finally, our participation in NATO is the political foundation of Greek-Hggiidefense cooperation and U.S. military aid. It is understandable that our withdrawal from the Alliance would not only immedi- ately and radically upset the seven-to-ten ratio, but also would undermine this cooperation at a time, in fact, when our relations with Turkey are strained. Finally, the argument is puonéorward that our participation in NATO determines the orientation of our armed forces' defensive arrangement in a way which leaves the threat from the east uncovered. But this assertion is baseless and inaccu- rate because it is well-known that, even befoee 1974, the Greek Armed Forces were covering the country's defense in eastern Thrace and the Aegean, without 64 NATO being an impediment to their defensive development in any way whatsoever. Nor, on the other hand, did our participation in the Alliance's military branch impede the sending of a reinforced Greek division to Cyprus in 1964. The instinctive conclusion is that there are no damaging effects on the political, economic and defensive sectors which would necessitate our country's departure from the Atlantic Alliance, even if we hypothetically accept that the threat from the north has been removed or is weak. But, of course, the reality is different. The threat is always visible on the edges of the horizon to all the free peoples of Europe. For this reason it is as necessary today for us to remain in NATO as it was in 1952 when we sought to be included in the Alliance. Unfortunately, there have not been created in international affairs those pre-e requisites which would once and for all dissolve the peoples' fears and worries and justify demolishing defensive barriers which they built at huge costs and with persis®ent organizational efforts. Until a general and controlled disarmament in conventional and nuclear weapons is decided, no free and democratic country in Western Europe would be so paranoid as to leave the Alliance's protective walls and remain naked and uncovered. Defense From the East There is no doubt that the Atlantic Alliance would be infinitely more useful, 17 particularly to our country, if it also covered the threat "from the east." This is not open to discussion. All Greeks agree that NATO's stance during the Turkish invasion on Cyprus was unacceptable and enraging. We all agree that the Alliance does not have the position it ought to on the problems Turkey is creating for us in the Aegean, such as the Limnos issue. But let us look at how our allies justify this stance: 1. First of all, they propound a formal reason, one of nrocedural importance. Namely, that a clear guarantee of our eastern borders would have to be decided by the Alliance's highest political organ, that is, the Permanent Council, which is headquartered in Brussels. All of the council's decisions are taken unani- mously and therefore include the assenting opinion of the Turkish permanent delegate who, however, would never accept a NATO decision which would have as a de=-.« basic justification the eventuality of an attack by his country against Greece. 2. Even though the Soviet Union is not referred to explicitly in the text of the North Atlantic Treaty, it is known, and unquestionable, that the Alliance was established to confront the Soviet threat and no other. 3. Alliances are made to jointly face common dangers. In the case in question, however, the Turkd&h threat against Greece is not a danger for the other allies and for this reason the governments and governing bodies, particularly of the small member countries in the Alliance, would not be willing to get involved in a Greek-Turkish clash beyond expressing an allied solidarity and active as- sistance in the political and diplomatic sector. The allies have expressed this assistance and their lively interest for many years by committing the so-called "vigilance order" to the secretary general. 65 According to this order, the supreme official in NATO, who is also president of the Permanent Council, closely follows developments in Greek-Turkish relations and regularly submits a written briefing report to the council, at the foreign ministers’ level. 4. When two other member countries in the Alliance, Ireland and Britain, reached the threshold of war, the other allies, including Greece, confined themselves to recommendations for solving the difference through a dialogue and negotiations. 5. All the Greek governments have refused to discuss the Cyprus issue in the NATO Permanent Council because this problem is not a Greek-Turkish difference, but an international one pending in the United Nations. Moreover, Cyprus is an independent country which is not a member of the Alliance, and for this reason NATO has no prerogative to intervene. 6. The Alliance is not, nor should it be, an arbiter or international judge which can take a positive or negative position on bilateral differences between allies--and, therefore, on Greek-Turkish problems in the Aegean, or on other issues of concern to Greece and Turkey, such as the proclaiming of Denktas' independent pseudo-state a short time ago. However, the governments of the member countries, each on its own account, can condemn similar actions in other fora, such as in the EEC or in the appropriate UN organs, something which all of them have done. Because, otherwise, NATO's taking decisions on behalf of or against one of its member countries not only would run aground on the stumbling-block of unanimity, but also would undermine the foundations of the Alliance which is fundamentally and principally a military and defensive organization. Contradictory and Dangerous All these arguments of circles in NATO, which, of course, are not propounded of- ficially and publicly but in friendly and unofficial conversations, are narrow- minded and "legalistic." Because it is irrational for an alliance to cover the threat only from a third state, that is, from the Warsaw Pact countries, and not from another country if it is a member of the alliance. Furthermore, in the pre- amble of the North Atlantic Treaty there is mauch talk about defending peace and justice against anyone who would threaten these precious and sacred commodi-- ties. But, narrow-minded or not, this is NATO's position on this vital issue for our country. It promises us defense of our country's integrity and security only in case of a threat from the north. It is not willing to commit itself for the other threat or, as it maintains, it is not able to, and restricts itself to assuring us that we should always consider the expression of allied solidarity in the political and diplomatic sector a certain and given thing. Well, what must our country do in view of these realities? Should it be satis- fied with what NATO offers--namely, the clear guarantee of its borders in case of their violation by Warsaw Pact forces, and its vague assurances in case of war between us and Turkey--or demand "all or nothing" from the Alliance and leave it? Political realism excludes the second solution, Because no one throws away his shield since it protects him on only one side. He holds onto it and tries to protect the other side in other ways. The New Democracy governments did this. They turned to the strongest ally, the United States, and in 1976 obtained the Kissinger letter to his Greek counterpart, Dimitrios Bitsios. With this letter, the U.S. secretary of state at that time assured the Greek Government that his country "will actively and sincerely oppose the pursuit by one side or the other of a military solution (in the Aegean) and will exert major efforts to impede such a development of affairs." Furthermore, during the 1981 bases negotiations, the minister of foreign affairs at that time, Konstandinos Mitsotakis, secured the assurance that his U.S. colleague, Alexander Haig, would declare in Congress that the Kissinger letter was always in force. But the elections impeded completion of the negotiations which were resumed from the beginning by the PASOK government and the declaration was not made. Only the government knows the reasons. We can, however, make the well-founded con- jecture that PASOK was not interested in this declaration being made because, after the elections, Greek foreign policy had become "proud," and the U.S. as- surances which would strengthen our country's security in the Aegean would mean, according to the prime minister, "servitude." So, while the government charges that NATO does not safeguard our eastern bor- ders, it disdains the guarantees of our strongest ally. Proud or not, this policy of the government is certainly contradictory and dangerous. 9247 CSO: 3521/248 67 JPRS-WER-85-053 17 JUNE 1985 MILITARY GREECE MIRAGE AIRCRAFT REPAIRED BY EAV Athens TA NEA in Greek 30 Apr 85 p 1 /Article by L. Dimakas/ /Text/ For the first time on a world-wide basis, "general repairs" on a Mirage F-1 fighter aircraft were performed by Greek engineers of the EAV /Greek Aircraft Industry/. Yesterday morning, Prof. P. Fotilas, EAV_ president, handed over to Lt Gen D. Apostolakis, GEA /Air Force General Staff/ chief, the first Mirage of our air force that had been completely overhauled at the Tanagra plant. Mr Fotilas told TA NEA, "This international success makes our company the first on a world-wide basis to have completely overhauled a Mirage F-1, an event that has already drawn the congratulations of the Mirage manufacturer Avions Marcel Dassault-Breguet Aviation." Mr Fotilas added, "The immediate benefits from this success must include not only the acquirement of the necessary technological know-how but more importantly the savings of valuable foreign exchange through the assumption of this kind of work by Greek industry. Also, employment of Greek personnel and especially the increase in the independence of our air force given the fact that this kind of aircraft is included in its basic units." It must be pointed out that the EAV has recently had a number of successes on an international level with regard to aviation repairs. Most recently, it signed an agreement with the U.S. Air Force for maintaining the radar systems of its aircraft stationed in Europe. The handing over of the first repaired Mirage took place at a special ceremony at the Tanagra airport. Earlier, a pilot flew the Mirage to test all its instruments and performance. Besides Mr Fotilas and D. Apostolakis, the GEA chief, also present at the ceremony was the commander of the 114th PM /expansion unknown/, Col K. Khiou, GEA staff officers and EAV employees. 5671 CSO: 3521/2511 68 JPRS-WER-85-053 17 JUNE 1985 MILITARY ICELAND SPLITS WITHIN PROGRESSIVE PARTY ON BASE ISSUE REVEALED Reykjevik MORGUNBLADID in Icelandic 25 Apr 85 p 98 [Commentary by Staksteinar: "Quiet Group"] [Text] The above photo [not published] was taken in the Haskolabio Theater last 30 March. Icelandic military base opponents have made that day a special day of demonstra- tions. It has always been a matter of pride for such persons, who consider themselves to have broad political support, that 30 March be a festival celecrated with special pomp and circumstance in a jammed hall. This was not the case this year as the picture shows. Stak- steinar today will look, among other things, at the assertion of Prime Minister Steingrimur Hermannsson that military base opponents within the Progressive Party were silenced at a party central committee meeting last weekend. Military Base Opponents Within the Progressive Party Prime Minister and Progressive Party Chairman Steingrimur Hermannsson was asked at anews conference after the general meeting of the Progressive Party Central Committee about why no foreign policy resolution was adopted at the meeting and if that meant that the members of the Progressive Party were in agreement about foreign affairs. The following was written in MORGUNBLADID on Tuesday concerning the answer of the Prime Minister. "He said no and added that military base opponents, of which there are many in the Progressive Party, saw no occasion to advance their views. He also said: ‘For some reason no one mentioned the radar bases. This surprised me...'." There is reason te be concerned about these words of the prime minister. Prime Minister Hermannsson said not one word about foreign affairs or security or defense matters in his keynote address to the general meeting of the party's central committee. Judging from his answer to the press conference, the conclusion may be drawn from his silence in this area that he is not a military base opponent since it is the duty of those in the Progressive Party to carry out discussions concerning defense and security issues. The vituperations of the prime minister on the radar bases are also 69 noteworthy. He expresses wonder that no one wanted to discuss them at the meeting. Bearing in mind the position of Haraldur Olafsson, the Progressive Party MP for the capital district, with respect to the radar issue it should be no cause of amazement. Olafsson had absolutely no desire for the matter to be discussed in the Althing and considered it best that the government would have control over the matter. That is, in and of itself, an under- standable position and is in conformity with how Iceland has organized its government. However, Foreign Minister Geir Halgrimsson is correct in wanting the Althing to take a position on proposals at hand forbidding construction of the radar bases, proposals presented by MP's of the People's Alliance and the Social Democratic Alliance from the eastern part of Northern Electoral District. Olafsson's Special Position It is likely, with regard to the position of military base opponents within the Progressive Party, that Haraldur Olafsson did not feel strong enough to stand against the position of the majority in this whereby the proposal of the People's Alliance and the Social Democratic Alliance on the radar bases was rejected. The question naturally arises of whether or not the position of Olafsson is in accord with the positions of Progressive Party members in the capital district, his constituency. We doubt that this is so but we are not entirely sure. The Reykjavid Progressive Association, which recently showed signs of life for some weeks, should discuss the matter so that Progressives and others can find their bearings with regard to whom Olafsson is speaking for in the radar issue. Judging from the vituperations in the Althing on the radar bases the day before yesterday, it may be concluded that Steingrimur Hermannsson and Haraldur Olafsson are in disagreement on the radar issue since Hermannsson thought it natural to vote against the porposal of the People's Alliance and the Social Democratic Alliance. He is thus a supporter of the construction of the radar bases and the matter might be referred to the government as far as he is concerned. The position of Stefan Valgeirsson, Progressive Party leader for the Althing representation of the party from the eastern part of Northern Electoral District, was firm in his position or as it says ina MORGUNBLADID report: "Stefan Valgeirsson (F) said that he had been an opponent of the restoration of the radar bases from the first but that when he thought the matter over he had changed his views. Having had a particular influence upon his change of views is the improved air safety in Iceland that will result from the radar stations." Haraldur Olafsson thus has a special position in the Progressive Party with regard to his position on the radar bases. Perhaps he wishes, with is refusal to take a position, to accommodate himself to men such as Pall Petursson, chairman of the Progressive Party Althing delegation and chief of the Northern Council, which is, as is known, against everything foreign except that which is introduced to Iceland through the agency of the Council itself--Petursson is unwilling, in short, to expand the scope of Iceland through the Council. Accommodation to the changeable views of Petursson in foreign affairs and security issues generally leads to wishy-washy conclusions wherein wishful thinking has more influence than fact. 70 9857 CSO: 3626/35 JPRS-WER-85-053 17 JTINF 1985 MILITARY ICELAND DETAILS ON ALTHING RADAR STATION DEBATE, VOTE FOR APPROVAL Parties Divided by Vote Reykjavik MORGUNBLADID in Icelandic 3 May 85 p 36 [Article: "A Rout: 42 votes to 15"] [Text] The proposal of Steingrimur J. Sigfusson (A-Social Domocratic Party) and Kilbrun Jonsdottir (BJ-Social Demo- cratic Alliance) to halt the building of the Radar Bases in the West Fjords and in Northeastern Iceland was rejected in a joint meeting of both houses of the Althing by a sub- stantial margin. Some 42 MP's voted against the proposal, 15 voted for it, 1 abstained and 2 were absent. Voting against the proposal were all present MP's of the Independence Party (SJ) and the Social Democratic Party (A), a majority of Progressive Party (F) MP's and three of four MP's from the Social Democratic Alliance (BJ). Voting for the proposal were all present MP's of the People's Alliance (AB) and some of the Women's List (SK) and likewise one MP from the Social Democratic Alliance and three from the Progressive Party. One Progressive Party MP from the capital region, Haraldur Dlafsson, abstained. Repudiation Proposal Rejected Voted on first was the proposal from Haraldur Olafsson (F) that the proposal of Steingrimur Sigfusson and Kolbrun Jonsdottir--on ending construction of the radar bases--should be referred to the government. There was a role call vote and the proposal was rejected. It received only 13 votes from Progres- sive MP's present, one was absent. Against the proposal were the MP's of all other parties, 43 in all, four were absent. Prime Minister Steingrimur Hermansson explained his vote in the following manner: "While the surveillance base is operational in Iceland in connection with Iceland's membership in NATO and the military cooperation of Western nations, it is appropriate that the surveillance be carried out with the best possible equipment. I am in favor of the construction of the radar bases in the West Fjords and in Northeastern Iceland. I am also in favor of the 71 reconstruction of the radar base in Southeastern Iceland and in that case it will be possible to remove the military from the site. In as much as the Althing cannot take a position on individual items within the agreement I an, on the other hand, in favor of referring the matter to the government." Proposal to Stop Radar Bases Rejected Thereupon the original proposal came to a vote. The proposal embodies the statement of the Althing's will, if it had been enacted, to end the construc- tion of the radar bases. The proposal was rejected 42 to 15. Voting in favor of the proposal were all MP's present of the People's Alliance and the Women's List, Kolbrun Jonsdottir (BJ), and three Progressive MP3s: Pall Petursson, chairman of the Progressive Party Althing delegation, Gudmundur Bjarnason and Ingvar Gislason. Voting against the proposal were all MP's present of the Independence Party and of the Social Democratic Pary, ten Progressive Party MP's and three MP's of the Social Democratic Alliance. Haraldur Olafsson (F) abstained. Two Social Democratic MP's were absent. Stefan Valgeirsson (F) explained his vote against the proposal by saying that the radar bases will greatly increase airline safety in Iceland, in addition to their surveillance function. Gudmundur Bjarnason (F) explained the votes of those three Progressives who supported the proposal. He said that in question here is military construction and an actual buildup, not maintenance or reequipment. "Everything indicates that effort is being made to construct a link in a chain of major military projects intended to fix Iceland in its position as military base into the distant future. What is being done here is also against the will of the people of Iceland. I would speak out for these people with my vote," said Gudmundur Bjarnason. Ragnar Arnalds (AB) said that the Althing delegation of the People's Alliance Party is against "expansion of the surveillance region of the American military base in Iceland and increased military construction with the building of the radar bases in the West Fjords and in Northeastern Iceland." He wished also to make clear the position of the people of Iceland and to take into full consideration the will of the inhabitants of the affected areas. Moreover, it is not proper for the Althing to avoid taking a position in this disputed issue by referring the matter to the government, a government "which seems to have made the decision on its own to fulfill all requests of the American Government for increased armaments in Iceland." Paper Comments on Althing Action Reykjavik MORGUNBLADID in Icelandic 4 May 85 p 32 [Editorial: "Althing Approves Radar Stations" ] [Text] Steingrimur J. Sigfusson, People's Alliance MP, and Kolbrun Jonsdottir, Social Democratic Alliance MP, have made efforts to have the Althing bring to an end the reestablishment of the radar stations that once existed in the West Fjords and in Northeastern Iceland and the reequipment of the radar base in Southeastern Iceland. 72 These MP's offered a draft of an Althing declaration to the effect that the construction of the radar bases should be stopped. The proposal was rejected; it received only 15 votes with 42 against. Thereby the Althing made unmistak- ably clear where the will of the majority is in the popularly elected parliament in this issue. Around two-thirds of the MP's are in favor of the reestablishment of the bases, only one-fourth of the total Althing is against. The radar bases under discussion here will cover an area similar to that constituted by Icelandic economic jurisdiction, there will be a kind of telescope over Icelandic jurisdiction. They will be a part of that defense and security surveillance maintained by the NATO Alliance and will increase at the same time the safety of Icelandic air and sea travellers. They will be of use also for the air traffic control of the air traffic zone supervised by Iceland in the interests of international aviation. They will be good for all and bad for none who move around Iceland or beyond it in peace. There are a number of such radar bases found widely about the world. Among others, there are bases in Finland and in Sweden that have a range stretching into the Soviet Union, although no one makes much ado about it. The Icelandic radar bases will, on the other hand, look out for Icelandic suzerainty. They will trouble no one who passes through Icelandic sovereign territory with care and with the permission of Iceland. It is not unexpected that the Althing delegation of the People's Alliance cast their votes against the construction of the radar bases. They take the same position when it is a matter of Western military cooperation. It is also not unexpected that the Althing delegates of the Women's List should follow along behind the People's Alliance in their position on Security matters, While there may be some little difference in the positions of the People's Alliance and Women's List in security and defense matters, the Women's List is the "Soviet satellite" of the People's Alliance in this matter. No voter, either female or male, who has supported the membership of Iceland in NATO and the Defense Agreement with the United States can support the Women's List in this issue. Perhaps the most unexpected thing about the vote was the three Progressives and the lead of the People's Alliance in the radar base issue. It was also unexpected that one Progressive Party MP from the capital region, Haraldur Olafsson, abstained from voting. And it was finally unexpected that the statements of Steingrimur Hermannsson, chairman of the Progressive Party, and Pal Petursson, chairman of the Progressive Party Althing delegation, should be at completely opposing poles in all major areas. The Progressive Party is clearly "open at both ends," as it has been in the past. This is no less the case for the Social Democratic Alliance. Steingrimur J. Sigfusson and Kolbrun Jonsdottir certainly had a hard time with their creation. The will of the Althing is now clear, unmistakably so: the radar bases will be built. The construction will now begin this summer. Very good preparations have been made under the leadership of Foreign Minister Geir Hallgrimsson. There is now a clear political mandate, clearer than has often been the case before when such undertakings were under consideration. 9857 CSO: 3626/35 73 JPRS-WER-85-053 17 JUNE 1985 MILITARY SWEDEN SDP, CONSERVATIVE PANEL MP'S URGE STRONGER WAR ORGANIZATION Stockholm SVENSKA DAGBLADET in Swedish 3 May 85 p 3 [Op Ed Article by Social Democratic MP Roland Brannstrom and Conservative MP Per Petersson] [Text] Roland Brannstrom is a Social Democratic member of Riksdag, a member of the Defense Committee and chair- man of the 1983 Conscript Training Committee. Per Petersson is a Conservative member of Riksdag, chairman of the Defense Committee and a member of the Conscript Training Committee. At the moment the Defense Committee is making preparations for the 1987 Defense Act in connection with its activities. Part of the basis for the Defense Act will be the deliberations and proposals the 1983 Conscript Training Committee (VK 83) submitted to the defense minister last fall. VK 83 made three main proposals: The committee felt our military preparedness should be improved by spread- ing the basic training of conscripts throughout the year. This would in- crease access to readily available troops with enough training to deal with incidents and perform certain tasks in the event of a surprise attack. Continuous Training VK 83 also proposed that the training of conscript officers be changed so that in the future they get a "head start" on their training. This means having the conscript officers show up first. They would receive some train- ing (a "head start") and begin leading and commanding the comrades they will lead in the combar organization as early as the basic training phase. In this way company and platoon leaders in particular can participate in the training of their comrades in the course of their own training. The main goal of head start training is to give conscript officers much better opportunities during basic training to practice their role as officers/ leaders with the aim of strengthening their role in the combat organization. 74 To make savings cuts possible VK 83's third main proposal was that training be organized on a continuous basis. Briefly, each training unit now turns out one batch of conscripts each fiscal year. Since most conscripts serve for 7.5 months the barracks, training systems and support functions are not fully utilized for a large part of the year. Continuous training means that each unit will train three batches of con- scripts in a 2-year period instead of two. In this way a number of establishments could be phased out. Experience has shown that savings are greatest when a training unit can be phased out al- together. We should point out some basic assumptions here. We have been able for decades to agree on the basic premises for our security and defense policy. We agree that it should be aimed at freedom from alliances in peacetime and neutrality in wartime. There is also great support for a relatively strong defense system in Sweden to enable us to maintain this policy and our in- dependence. Our country has a large area and it is sparsely populated. Defending the entire country requires a large military organization. The best and cheap- est way to build up a strong defense with broad public support is to base it on universal conscription in a mobilization organization. We also agree on that even though there are partisan differences of opinion on certain minor issues and some adjustments, etc. Universal conscription requires that all men according to their abilities and qualifications participate in the defense of our country and our right to shape our society in a democratic manner. If we are to make these big demands on our fellow citizens we must give our soldiers the training, the materiel, the organization and the leadership necessary to enable them to carry out their assignments. Military technology is developing quickly. Big investments are being made in military materiel by other countries. Save on Peacetime Operations But the defense system is only part of our society. Exactly how much we should spend on defense is debatable, of course. However there is agree- ment that it is urgent to make the savings in the peacetime organization that are possible--while retaining its quality--in order to use these re- sources in the wartime organization. The peacetime organization of the armed forces has already been the target of sweeping rationalization measures. Therefore it is more a question of where cuts can be made in the organization while producing the least damage. We must therefore start asking what importance each little bit in peacetime could have in the wartime organization. Activities that do not contribute to our strength in a war should be eliminated. But we were unable to come up with any substantial savings in this way. We cannot spare materiel. We cannot do without universal conscription and we do not want to. Retraining exercises are necessary to maintain the capa- bility of units in the field. We must look for possible savings in the costs of the peacetime operation (barracks, peacetime administration, training systems and so forth). More Drastic Measures We have tried to find solutions that would cost less while retaining a high level of ambition and quality in military training. We have been aware all along that all our proposals do not involve simple solutions. They have consequences that must be dealt with and create problems that must be solved. For instance refresher training exercises must be carried out "in the field" to a greater extent. But this should benefit this type of training. Changes that affect armed forces personnel should be carried out in a considerate way. Changes are not always popular, especially when one can clearly see that their rational conclusion is the closing down and/or moving of activities. It is not realistic to ask that everyone be enthusiastic about proposals aimed at reducing the army's peacetime organization in particular. However we can ask that the authorities study the proposals closely and that they work constructively to solve minor problems. If we do not approve the measures now there is a great risk that within the next few years we will be forced into a situation that will call for con- siderably more drastic measures. 6578 CSO: 3650/244 76 JPRS-WER-85-053 17 JTINF 1985 MILITARY SWEDEN NEW DEFENSE RESEARCH AGENCY CHIEF GIVES VIEWS ON PROJECTS Stockholm DAGENS NYHETER in Swedish 15 May 85 p 41 [Article by Eric Dyring] [Text] Defense research is not just a matter of developing new and more efficient weapons and countermeasures to offset their harmful effects. It also involves developing new knowledge about the biological and medical problems of war. People are always at the center of a war and therefore military research and development must cut across many scientific discip- lines. These remarks were made by Bo Rybeck. He will take over as general director of the Defense Research Institute, FOA, on 1 June. He is around 50 years old and has worked in medicine for 30 years. The high point of his academic life was a doctoral thesis on gunshot wounds. Some 61 dogs died as part of the research, "None of them suffered," Bo Rybeck told the press when he defended his doctoral thesis. After that his career in military medicine advanced rapidly. In 1979 he became surgeoin general, the highest-ranking doctor in the armed forces. In 1981 he also became head of the armed forces health care agency. He is succeeding Lars-Erik Tammelin as chief of FOA. Tammelin, who also has a background in biology, was chief for less than a year and a half and is now retiring voluntarily because of ill health. Two FOA chiefs in a row who are specialists in biology. Is that a sign of a new orientation at FOA? No, according to the Defense Ministry. Many names were proposed. The de- cision was made on the basis of personal qualifications. What does Bo Rybeck himself say? "FOA's orientation will not change but it is goud to include human beings in defense research and development." 77 He was reluctant to make any program explanations. FOA is a very big re- search organization with hundreds of scientists and specialists in many different subjects ranging all the way from physics to psychology. FOA is the nation's weightiest research unit. Its annual budget is around 1.5 billion kronor. That is almost 20 percent of the state's entire research and development budget. FOA has been divided up into a number of units that are located in different places. Does that create problems? "Yes and no," said Bo Rybeck. "Many specialists did not move with the job and new ones have been added. The renewal has turned out to be stimulating. I have my own experiences from the time when the defense health care agency moved out to Karlstad." Cooperation One of the current projects in which a more intensive effort is expected to be made is in the area of information technology, under the designation of C3I. This involves advanced electronic warfare. "Cooperation with the universities is important," said Bo Rybeck. This indicates his support for the government's research policy ambitions. What about FCA's openness as far as the public is concerned? "FOA must work as openly as possible. Secrecy should not be resorted to unless it is absolutely necessary. I think the effort of the U.S. admin- istration to put a lid on sensitive research is unacceptable." 6578 CSO: 3650/244 78 J PRS-WER~85-053 17 INF 1985 MILITARY SWEDEN PAPER COMMENTS ON DEFENSE COMMITTEE REPORT ON THREAT PICTURE Stockholm DAGENS NYHETER in Swedish 17 May 85 p 2 (Editorial: "Agreement on Exposed Sweden"] [Text] The most important conclusion reached by the Defense Committee is that Sweden's situation has become more exposed. In the security policy report that was released on Ascension Day this assess- ment was made in reference to Sweden's situation in the context of a crisis ‘yr an armed conflict. But the report also said that changed factors--the increased strategic importance of the North European and North Atlantic areas, the differences between the superpower blocs and developments in mili- tary technology--have led to increased pressures in peacetime. There is good reason to note with greater emphasis than in the past the threats and pressures Sweden can be exposed to during tense peacetime conditions, the report noted, Evidently the Defense Committee did not want to act in an alarmist fashion. The fact that representatives of the four biggest parliamentary parties could reach agreement in the report is a significant phenomenon both in- ternally and externally. It should weigh heavily in the future debate on defense and security policy. Of course the report does not mean that the major antagonists in the area of Swedish foreign policy--the Social Democrats and the Conservatives--have suddenly discovered that their views on the matter are identical. Social Democratic committee member Sture Ericson did manage to have another clash with Conservative Carl Bildt over the assertion that "very little" of his own material had been included in the report. It is true that there are statements that are usually omitted or o>scured in Conservative security policy efforts--concerning popular movements against the arms race, the activities of the United States in Central America, the advantages of a Nordic nuclear-free zone, the value of the Stockholm International Peace Research Institute, SIPRI, etc. It was prob- ably more important for Bildt to stress that East-West differences represent a fundamental problem for international security; here the Social Democrats have toned down previous tendencies to stress North-South problems. 79 It is possible that points should be awarded for this. Major efforts have been made to tighten up and organize arguments that were inherited from pre- vious defense reports. Some questions could be raised. There should have been a more energetic discussion of both Soviet and Swedish security policy problems. Why did the committee mention the Submarine Defense Commission's conclusions about the known Soviet violations in Gasefjarden and Harsfjarden without a reminder of its assertion that a whole series of violations in 1980-82 were committed by Warsaw Pact subs, which in practice meant Soviet subs? The fact remains that now a parliamentary committee also says that the vio- lations continued in the years after 1982; the committee agreed with the Submarine Defense Commission about the motives, although they are now called "various forms of preparation for future crises or combat situations. The committee's work covered a broad range. It listed the problems of Swedish vulnerability; it reviewed the importance of the North Cape and the Baltic Sea for both sides; it noted the growing realization by the super- powers that victory in a nuciear war is inconceivable, making it difficult for either side to start a conflict that it is certain it will win, and it briefly noted the risk that Reagan's space defense program will have a de- stabilizing effect. When the Defense Committee discusses security problems the goal is not just to stimulate debate, however. The report is intended to form the basis for future proposals by members of parliament conceriing the shape of the armed forces and defense appropriation limits. It has now been made clearer than it has been for a long time that foreign policy and defense policy “are the central dimensions in Swedish security policy." The year 1985 is not the time to tone down the importance of de- fense in general or military defense in particular. According to the com- mittee there is an increased risk that the Nordic region could be affected "even in the initial stages" of an armed conflict between the power blocs. The report says that the basic goal--making an assaillant's sacrifices sub- stantially larger than the advantages of an attack--"continues" to lie with- in Sweden's economic and technical possibilities. But while presenting a picture of increased concern about the Nordic region, the committee noted that the number of qualified military units has declined in recent decades. After the Defense Committee's ambitious efforts it will be difficult for its members to permit this trend to continue. Their own logic calis for addi- tional Swedish resources--not just to combat submarine violations but also to safeguard stability in the exposed Nordic region. 6578 CSO: 3650/244 80 JPRS-WER-85-053 17 TINE 1985 ECONOMIC Z _ GREECE BANK OF GREECE REPORTS UNFAVORABLY ON ECONOMY Athens AKROPOLIS in Greek 30 April 85 ppl, 9 [Excerpts] Hard measures of unilateral austerity are proposed--euphemistic lan- guage because of the pre-electoral period to meet the "plight" of the economy--by Mr. D. Khalikias, the principal economic advisor of PASOK and its own appointee to the position of director of -the Bank of Greece, At the same time, however, he proposes a turn towards private enterprise and in- vestments that are "the only ones that*can halt unemployment" as well as curtail socialist expenditures. | Mr. Khalikias' proposals yesterday, contained in his yearly report to the general meeting of stockholders of the institution, constitute, according to observers, an indication of the economic policy which PASOK most probably will follow after the elections in the improbable case that it is reelected. The Khalikias proposals for hard austerity involve indirectly, but clearly: Abolishment of ATA [Automatic Cost of Living Readjustment] ("blunting of the sys- tem of income policy," he calls it...) or, in any event, the curtailing of the nominal increases in salaries and wages; Imposition of a tax on farmers; Curtailing the waste of public administration and the issue of inflationary currency. Mr. Khalikias also suggests the revitalization of private investments, reduction of state interventions and the liberalization of the market, Mr. Khalikias considers all this as "premises for the effective struggle against unemployment," indirectly criticizing the government's measures and policy that failed in fighting unemployment. In his text, the director of the Bank of Greece avoids directly criticizing the results of the government's econcmic policy. However, the data provided in his report speak for themselves (for instance, the public sector deficit approached 600 billion drachmai in 1984, the loans from 81 abroad went beyond 2.2 billion dollars, etc,) and confirm the criticism of ND as observed day before yesterday by ND's parliamentary representative, Mr. Ath. Kanellopoulos in his statement. 9731 CSO: 3521/252 82 JPRS-WER-85-053 17 .TTINF. 1985 ECONOMIC GREECE BRIEFS FARMERS CONSTITUTE MAJORITY--Farming continues to employ the larger portion of the human potential of the country. According to data of the Statistical Service (1982) the number of those employed in farming reaches one million persons, that is, 28.9 percent of the country's work force, Manufacturing, which employs 672,000 persons (19.2 percent) is next, with services employing 536,000 persons (15.4 percent), com- merce and tourism with 523,000 persons (15 percent), construction with 294,000 per- sons (8.4 percent), transportation with 274,000 persons (7.8 percent) and banks and insurance with 129,000 persons (3.7 percent). According to the same data, farming employs the larger portion of working women (38 percent), followed by services (21 percent) and manufacturing (17.5 percent). A minimal portion of women, as opposed to men, are employed in construction (0.4 percent). Farming again is the first occupation for men (24.7 percent), but manufacturing follows closely behind (20 percent). Construction is preeminently a man's occupation that employs 12 percent of the men while the predominance of men in commerce and services is smaller. Overall, the working men total 2,419 million, while the women total 1,072 million. [Text] [Athens TA NEA in Greek 5 May 85 p16] 9731 TECHNOLOGICAL COOPERATION WITH USSR--Academician, Deputy Chairman of USSR Council of Ministers and Chairman of the State Committee for Science and Technology of the USSR, Guriy Marchuk is in our country since yesterday for an official visit (2-6 May) at the invitation of the minister of Research and Technology, Mr. G. Lianis. The visit is made within the framework of Greek-Soviet cooperation on matters of reseach and technology. Mr. Marchuk will be received by the premier, Mr. Andreas Papandreou, at Kastri and will meet with the minister of Research and Technology, Professor G. Lianis. It should be remembered that Greek-Soviet co- operation in the science and technology area already has a considerable background in areas such as medicine, seismology, solar energy, agriculture, building materials and that during the current biennium (1985-1986), it has been agreed to implement a series of programs of exchanges and joint research work by Greek and Soviet scientists. [Text] [Athens TO VIMA in Greek 3 May 85 p 8] 9731 EVILS OF SOCIALIZED ENTERPRISES--The consequences from unlawful competition to the detriment of private enterprises remain uncertain. Such competition has recently increased significantly. This comment was made by the League of Incorporated Companies and the EOE /expansion unknown/. They added that this kind of competition is being evinced mainly as “side actions of certain government measures and regulations."’ Such measures that are hurting private initiative are as follows: (1) favorable treatment for socialized enterprises compared to non-socialized ones in the same sector; (2) favorable treatment for cooperative and public enterprises; (3) shrinkage or reduction to zero of profit margins because of market controls; (4) favorable short and long-term financing of certain categories of enterprises; (5) lack of quality specifications for services and goods produced; (6) quality variability of local raw materials; and (7) monopolistic activity by the state as far as enterprises are concerned (PROMET /expansion unknown/, etc.) that is upsetting the market structure without_ensuring a more permanent maintenance of the new conditions it is creating. /Excerpt/ /Athens MESIMVRINI in Greek 7 May 85 p 11/ 5671 CSO: 3521/251 84 JPRS-WER-85-053 17 JUNE 1985 ITALY ECONOMIC LABOR OUTLINES PLATFORM FOR ENEL CONTRACT NEGOTIATIONS Rome RASSEGNA SINDACALE in Italian 8 Mar 85 p 18 [Article by Alessandra Urbano: "Towards Contract Renewal: FNLE-CGIL"'] [Text] An assembly of cadres and delegates of CGIL (Italian General Confederation of Labor] electrical workers has changed the guidelines for the six sector contracts, The national assembly of cadres and delegates of the FNLE (National Federa- tion of Energy Workers)-CGIL met in Chianciano on 21-22 February to set the guidelines for contract reopeners that affect 140,000 workers, 115,000 of whom belong to ENEL [National Electric Power Agency]. Six of the seven industry agreements lapsed on 31 December: three employee contracts with electricity producing companies, which have ENEL counterparts, in Feder- elettrica (Federation of Municipal Electric Companies) and in self-produ- cing companies; three of the four employee contracts with companies produ- cing gas and water, particularly Anig (private companies), Compigas (small companies) and Federgasacqua (municipal companies). The Chianciano assembly singled out some points for the union to concentrate on, [In summarizing them we have paid special attention to ENEL's specific problems because the company is so important in that industry. Policy Aspects of the Contracts The objective is to strengthen the power of the contracts, the union's right to information and oversight of decisions on organization, investment, technological innovation, contracting, and overtime. In the case of ENEL, the union's position is put in writing and referred to the board of direc- tors, which is supposed to consider it in making decisions, ENEL has a strong centralizing tendency in its decision-making structure at both national and lower levels, which are located in the major cities of the country. Company policy is to seek cooperation with the union at the r central administration level. "But the CGJL,"' says Manlio Nitti, the FNLE national secretary, “intends, on the contrary, to affect the operating units for the purpose of shaping not only the organization of work but also the quality of service." Emp loyment The national budget puts limits on organizations in the public sector, but the union seeks exemptions from this law for two reasons: the high social utility of the service and the companies' great profitability. "The budget is being balanced on rate increases or administered prices," Nitti says, "and so it is unfair to put unnatural limits on organizations." The use- fulness of the service is its mass consumption not only by families but also by artisans, small industry, commerce and agriculture. Limitations on organizations are limitations on growth in these sectors and are particular- ly serious in the more depressed areas of the country, which, onthe con- trary, need a surplus of investment. In some areas, organizations are lack- ing, and ENEL is forced to resort to the mechanism of contracting out both plant hovk-up and maintenance. "What is saved on labor costs," says Nitti, "is spent in that way; but we thirk these are poor options from the view- point of business, costs and social utility because they give priority to parasitical middlemen. It should also be added that very often contractors evade the law requiring equal treatment of workers." ENEL has proposed a 3-year plan that provides for 5,000 takeovers in the period 1985-87, but the union considers that insufficient. To increase employment, the FNLE wishes also to be able to use part-time work and on the job training as well as reduce working hours (40 hours annually) as provided in the Scotti memorandum; further reductions would be agreed to up to 36 hours for ineffective or slow workers and for shift workers at thermo- electric plants and maintenance workers at nuclear plants. The FNLE be- lieves that reducing working hours will be agreed to without much opposi- tion but only if it meets the needs of the industry. Wages This category has three contract phases: the national contract with a 3- year term, the intermediate contract and the general company contract. By signing the national contract, the FNLE has already shown its intent to strengthen the clause that sanctions the right to renegotiate intermediate contracts after a year and a half. The objective would be to catch up on wages tied to productivity increases. Productivity can be established by deduction from Italgas and ENEL's national balance-sheet data and by averaging the data from municipal companies. The productivity increase due to labor will be paid out in wages, and the increase due to techno- . logical innovation will go partly to benefit the company and partly to create jobs. The object is to tie the productivity increase to wages in terms not of productivity bonuses for individual workers or job certifica- tion but of benefits to the organized workers of an entire production area. In companies such as ENEL the production area is defined as the operative unit (never with fewer than 100 workers). Intermediate contract negotia- tions would be bypassed whenever these objectives are met by company con- tracts. 86 Job Training Economic benefits are closely tied to worker qualifications, job training and labor organization. The objective is to reformulate the present scale and arrive at better wage differentials that recognize high job qualifica- tions in technological restructuring and innovation. 8782 CSO:3528/ 7) JPRS-WER-85-053 17 TINE 1985 ECONOMIC ITALY RECOVERY PROBLEMS OF INDUSTRIAL HOLDING IRI Rome LA REPUBBLICA in Italian 25, 26, 27 Apr 85 [25 Apr 85 p 27] [Article by Giuseppe Turani: "IRI: A Bomb Needing to Be Defused"] [Text] So far, Prodi has succeeded in preventing the ex- plosion. Two and one-half years ago, the Bolognese professor inherited a "monster" being devoured by debts: For each lira billed, a lira had to be repaid to the banks. Since 1980, 40,000 jobs less. Rome--Romano Prodi makes it a point habitually to recall, not without a touch of coquetry, that he was appointed president of the IRI [Industrial Recon- struction Institute] on 3 November 1982, “in that tiny interval of time that separates All Souls Day from V-Day." Almost 2 and 1/2 years since that date and a little more than 6 months remaining until the end of his first term in that capacity, the question is: In which direction is IRI--the largest indus- trial holding company in the Western world--headed? Towards its demise or towards a recovery? The answer to this question requires much caution and a bit of patience, even though it can be said at the outset that the IRI is still "in that tiny interval." It has made some forward strides, and we will see what these are, but many years must pass before it ceases to be a problem and a tragedy wait- ing to happen to the Italian society. Probably the most direct way to enter the reality of this enormous industrial complex is to analyze the figures given in the accompanying Tables 1 and 2, from which many things can be learned. The only points to be borne in mind are that the tables have been drawn up based on the official figures pertain- ing to the IRI's various consolidated balances, and that the tables include also the figures pertaining to banks. In 1983, billings totaled almost 37,000 billion lire, and we can thus say that the size of the productive machine entrusted to Prodi was one and one- half times that of FIAT, the country's biggest private industrial group. 88 Tables 1 and 2 (Article 1) These tables provide an accounting summary relative to the IRI's consolidated balance sheets from 1979 through 1983. Figures are in billions of lire. Banks are included. Table 1 also shows the results of a simulated operating scenario. A Loss Owing to Financial Charges ae: Somme dati Item 1979 1980 1981 1982 1983 1979-83 (2) Fatiurato 18146 22558 29004 32938 36887 139633 (3) Mol 3223 3705 4848 6625 ###7260 25661 (4) In % su fatturato 17,76 16,42 16,71 20,11 19.68 (5) Ammortamenti 1887 2113 2588 $2994 3429 13011 (4) in % su fatturato 10,40 9,37 8,92 9,09 9,30 (6) Oneri finanz. netti 2715 3804 5074 5993 6239 23825 (Table 1) (4) in% su fatturato 14.96 1686 17,49 18,19 16,91 (7) Risultato economico -1346 -2409 -2869 -2610 -2899 -12133 (4) in % su fatturato -7,42 -10,68 -9.89 -7,92 -7,86 7 Cash-Flow 541 -—296 -281 384 530 878 (4) in % su fatturato 2,98 -1,31 -0,97 1,17 1,44 (8) Dipendenti 554165 556613 544183 642612 529893 545493 (9) tmeca) (10) Variazione dipendenti 2448 ~12430 -16571 -12718 -26720 su anno precedente ('80-"83} (11) Scenario oneri finanziari al 5 per cento sul fatturato 12) Spesa per 0.F. 907 1128 1450 1647 1844 6977 13) Risparmio O.F. 1808 2676 3624 4346 4395 16848 (7) Risultato economico 462 267 755 1736 1496 4716 (14) Comprese te banche - Dati in miliardi di lire - Bilancio consoliduto Economic Results Deteriorated by 115 Percent (15) 1979 1983 Var. % (2)Fatturato 18146 36887 108.38 3)Mol 3223 7260 8 126, (Table 2) 5) Ammortamenti 1887 3429 81.72 6) Oneri finanz. netti 2716 6239 129,80 (7)Risult. economico -1346 -2899 ~116,38 Cash-Fiow 641 530 -2,03 (8)Dipendenti 654166 629893 -4,38 Key (Tables 1 and 2): 1. Totals 1979-1983. 11. Scenario Based on Financial 2. Billings. Charges Equal to 5 Percent of 3. Gross operating margin [GOM]. Billings. 4. As percent of billings. 12. Financial-charges expenses. 5. Amortizations,. 13. Financial-charges savings. 6. Net financial charges, 14. Banks included. Figures in 7. Economic result. billions of lire. Consolidated 8. Employees. balance, 9. Average. 15. Percent variation. 10, Changes in employee totals versus preceding year. 89 Employees, still as of year-end 1983, numbered almost 530,000: No group in Italy has as high a number of employees as this. Based on this aspect, one can say that the IRI was a "monster," in the sense of its being somewhat dreadfully outsized. And we also know the origin of this "outsize." For many years the Institute had been a sort of secular arm of the political power scructure: Every time the need arose for investments, employment or the bail-out of enterprises in trouble, the IRI was called and the IRI responded. As long as things went well and the IRI had the money, it went along on the basis of its own resources. When the winds shifted, it began incurring debts, in the hope that sooner or later the politicians would come through with something in acknowledgement of the major efforts it had made to help employment. Unfortunately, the politicians had for many years been wrestling with budget in deficit, and monies to the IRI hadve been doled out with a medicine dropper, and regularly delayed. In short, the Institute had for years been left to fend for itself. The results are those that can be seen in the tables. In just 5 years, from 1979 to 1983, the total of official losses accounted for in the budget exceeded 12,000 billion lire (in current lire; if inflation is taken into account, this total will certainly come to over 15,000 billion lire}. In the last column of Table 1 we have tried to add together all the figures for the period 1979-1983 (using a method that perhaps would not quite stir the emthusiasm of the analysts but which serves to convey an idea of the problem), and have come up with the following findings: 1. In 5 years, the IRI sold merchandise and services totaling almost 140,000 billion lire in billings. 2. After deducting expenses, the Institute had a gross operating margin [GOM] of close to 25,000 billion lire to apply to amortization and to interest pay- ments on indebtedness to the banks. 3. For this last item alone (financial charges), the IRI paid the banking System almost 24,000 billion lire (practically speaking, its entire GOM--- FIAT'’s total billing for 1 year: These are the magnitudes involved). 4, Amortizations were financed by losses (indeed, the two figures are almost equal), 5. It is not surprising (it being at this point purely an algebraic question) that the cash flow (that is, the group's total reinvestment) over a period of 5 years, ad out of billings totaling 140,000 billion lire, added up to barely 87€ billion lire--a mere pittance. To get some idea of what our politicians can do, suffice it to refer to the bottom section of Table 1, where we have worked out a "Scenario Based on Financial Charges Equal to 5 Percent of Billings." In this section we have 90 calculated what the results would have been if the Institute had been allowed to operate in such a way as to limit its indebtedness to where it would be spending only 5 percent of its billings to pay bank interest charges. The results speak for themselves: 1. IRI would have closed every one of its balance sheets with a profit (and the morale of the group and of its management would have been something altogether different, to say nothing of the Institute's position from the standpoint of obtaining private financing). 2. In all, almost 17,000 billion lire would have been saved under the heading of "Financial Charges." 3. IRI's profits over the 5 years considered would have been close to 5,000 billion lire. The reader will undoubtedly ask: But how much would the state have had to disburse to the IRI to obtain this result? Not more than 15,000 billion lire: Less, that is, than the amount that would subsequently have been saved in the said financial charges over the succeeding 5-year period. The advan- tage, however, would have been that the IRI would now find its financial- charges burden reduced by two-thirds with respect to what it actually is, hence in a position to think of its future in cunsiderably less anxious and apprehensive terms, Of course, there are those who maintain that, in view of the propensity of the IRI and of the public-sector's industrial enterprises in general to devour money by the billions, the best thing would have been specifically not to supply the Institute with fresh money. In that case, it would also have been necessary to prohibit it from incurring new debts and to prevent the situation from deteriorating further. Instead, everything was allowed to proceed spontaneously, and to come what may. And the result was precisely the one we have arrived at: A lira of debt for each lira billed. All of this serves to help understand a few things. When Prodi arrived at the Institute in November 1982, it was already saddled with a past, and that past was an errant one. The IRI had grown on the basis of debt and its debts were strangulating it: Almost its entire GOM (that is, the fruits of the work of hundreds of firms and of thousands of persons) was being swallowed by the banks in the form of interest charges. On the other hand, the group seemed caught up in a vicious spiral: Alone, it could not produce sufficient profits to reduce the burden of its indebtedness. The politicians were simply terrified at the accounts of this immense public-sector holding enterprise, but did nothing because they had not the means. Anyone could understand that the only way to extricate the IRI from its errant past (from a mountain of debts that has now reached the level of its billings) was to pour fresh money into the Institute. It is either that, or halt the growth of its indebtedness by compelling it to adopt corrective measures. Everyone was waiting for someone to perform a miracle. On the other hand, the IRI could not even begin a restructuring on its own: The firms that were losing money would be hard to sell. Besides, many of them had a strategic value which in any case precluded their being ceded; and regardless of that, wherever it was attempted, virtual revolutions exploded. For, no one could tolerate the thought of leaving the tender, loving hands of the state for the coarse, rude ones of private enterprise. In substance, when Prodi arrived at Via Veneto in November 1982, there could be no doubt of the two missions the politicians had silently assigned to the IRI: 1. Do everything possible to stay alive. 2. Safeguard employment and create no conflictual situations at a delicate time from the social standpoint. Unfortunately, history and the economy are more powerful than the secretary- ships of the political parties and the unions. Suffice it to glance at our tables to see that the IRI had already begun, in 1980, cutting back on jobs instead of augmenting them as it had been doing [contrary to all logic) up to the year before. In all, in the few years since then, 27,000 persons had lost their jobs. If account is also taken of those transferred to the Wage Supplement Fund, the figure almost certainly comes to a total of 40,000 job slots that in fact no longer existed. Meanwhile, billings had increased and, at the same time, so had indebtedness (attaining, in 1983, 37,000 billion 400 million lire, a little more than total revenues for the period). And financial charges, as of year-end 1982, amounted to more than 18 percent of billings. At that point, the IRI was no longer an industrial group with a more or less uncertain future: It was a social and business bomb that could explode from one moment to the next with lethal consequences for the public finance sec- tor, for employment and for the country's growth. The results were those summarized in our Table 2. Between 1979 and 1983, billings had risen (in terms of current lire, hence thanks also to inflation) by almost 104 percent. The GOM had performed acceptably. Two figures, how- ever, document the disaster that was already on the way: Financial charges had risen almost 130 percent (against a rise in billings of hardly 104 per- cent), and the economic balance had deteriorated by 115 percent. The IRI, that is, had become a two-headed monster: Sales rose and, concurrently, so did losses. Indeed, the latter were rising at the faster rate of the two. Internally, moreover, it was cultivating a voracious cancer: Italsider's steel-production installations--unstoppable, immensely powerful, outright billions-guzzling complexes that would soon be devouring 10,000 million lire a day. 92 Someone, during that dark period, drew up a forecast-style scenario that was as easy to understand as it was chilling: "The steelworks will blow the IRI sky-high and the IRI will blow the state budget to bits." It was in this context that Prodi was coopted from his professorship of econ- omics at the University of Bologna and installed in the presidency of the Institute. The advice was the same as always: "Don't make any noises, be cautious, but above all, do something." [26 Apr 85 p 33] [Article by Giuseppe Turani: "How Prodi Changed Course") [Text] The figures presented herein document a miracle. The economic balance remains negative but the improvement is clear: Billings rising at a rate of 24 percent, a sizable increase in amortization, and a drastic reduction in financial charges from 17 percent to 5.4 percent. Rome--Prodi*s miracle at the IRI, though difficult to grasp is very signifi- cant. To realize this, it must be remembered what the Institute was, namely, a body without any future whatever in sight for it, other than to hang in there hoping for something to happen, all the while being devoured by its own debts. The official consolidated balance sheet figures for 1984 are not available as yets only a sort of internal estimate can be made (which is constantly being updated as new figures arrive from the various firms) relative solely to the firms of the industrial sector and to the Institute's headquarters, To enable comparisons (and bearing in mind still that the figures involved change almost daily) we have reconstructed the historical picture from 1979 on. The figures we present in Table 1 are therefore comparable and relatively reliable. In any case, however, they serve as a helpful preview to under- standing what has happened and what is now happening inside our biggest industrial holding enterprise, A very careful study of these figures reveals the initial effects of "Prodi's Revolution": 1. The economic balance for 1984 (industrial firms only, plus IRI, hence minus banks) is still negative and by a substantial figure (over 2,650 bil- lion lire). But there is an improvement (if only to the extent of 157 mil- lion lire) as compared with 1982. If the comparison is made versus 1983 (the first year of Prodi's management, when the new president had to manage what he had inherited with very few possibilities of intervention on his part), the improvement is much more substantial: Losses were reduced by 573 billion lire, for an improvement of almost 18 percent over the preceding year. And 93 in all fairness, this cannot be said to be negligible; particularly if one considers the starting positions involved. 2. But these economic balance figures provide only a bottom-line summary of the facts. To understand where the change has taken place the column headed "Percentage Changes 1984 vs 1982." Several important facts emerge: a) Billings rose 24 percent in 2 years; b) The gross operating margin [GOM], the figure used to measure industrial management results (in practice, the economic balance before amortizations and financial charges), however, improved almost 29 percent--at a faster rate, that is, than billings. And that is not all: A careful look at the table shows that in 1984 the GOM represented 18.36 percent of billings. This is the highest figure attained in the period covered by our historical study, and considerably higher than the prevailing values for the period (which oscillate between 13 and 16 percent). This means that in Prodi's 2 years at the IRI many screws have been tightened, much waste eliminated, and some savings realized. The slowest and most difficult part of the work, that is, has been got under way; c) Another important indication of change is evident in the "Amortization" figures. An improvement of almost 50 percent is observable for the period 1983-1984, Generally speaking, when firms are in trouble, their managements try to reduce amortizations so as to inflate their profit figures. In this case, however, we are in the presence of a proper intent to effect the neces- sary amortizations. This is to say that, by applying a bit of accounting makeup to the figures, Prodi could have presented indeed an "improved" (and less truthful) balance sheet. He opted against doing so. d) The most striking change, however, is the one that has taken place with respect to financial charges, the real crucial point of the entire IRI prob- lem. Our table shows clearly that, from 1980 on, these charges had settled in at a particularly high level, equal to around 17 percent of billings. In Prodi's 2 years at the helm there has been a definite turnaround: The rise in financial charges has been kept down to within 5.40 percent (versus a rise in billings of 24 percent, and in GOM of almost 29 percent). In this way, the interest burden has dropped from 17.17 percent to 14.50 percent. The most important thing to be done in this respect, namely, to stem the race towards greater indebtedness, has been started. For the time being, its impact on the economic balance has been modest, but the compass direction on which the ship's prow is set is now the correct one. e) As a final result, the cash flow--that is, IRI's capacity for reinvest- ment--has increased tenfold. And this fact alone summarizes in a single figure “Prodi's miracle” in its entirety. f) In terms of employment, there was a price--almost 30,000 employees less during the 2-year period 1983-84. But this had been foreseen and, in all, 94 Tables 1 and 2 (Article 2) The first of these tables compares the results attained by the IRI before Prodi's presidency (1979 to 1982) and during the present president's manage- ment (1983 ana 1984). The figures shown are assembled totals, not official, expressed in billions of lire, and do not take into account the balance sheets of the banks that govern the Institute. The second table shows more directly the percentage variations of the princi- pal items in the balance sheet, Table 1 An Analysis of Accounts From 1979 Through 1984 (1) (2) (3) (2) (3) PRESID. PRODI VARIZ VAR % # VARIAZ VAR % Item 1979 1980 1961 1962 1963. 1984 89432 84082 *°-83 84 0u 83 (4) Fatturato 18345 22691 29111 33077 37260 41014 7937 24.00 3754 10,08 (5) Mol 2970 3061 4339 5844 5924 7632 1688 28.88 1606 27,17 (6)in % su fatturato 16,19 13,45 14,91 17,67 16,90 18:36 0,70 — 2,47 — (7) Ammortamenti 1888 2054 2530 2987 3419 4470 1483 49.65 1051 30,74 (6) in % su fatturato 10,29 9,05: 869 9,03 9,18 10,90 1,87 — 1,72 —_ (8) Oneri finanz. netti 2730 3821 5C74 5680 5689 5987 307 540 298 5,24 (6) in 9% su fatturato 14,88 16,84 17,43 17,17 15,27 14,60 —2,57 — -0,67 — (9)Risultato economico -1436 -—2534 -3120 —2825 -3225 -2652 173 6.12 573 17,77 (6) in % su fatturato —7,83 -11,17 -10,72 -8,54 -866 -647 2,07 — 2,19 - Cash-Flow 452 -480 -590 162 194 1818 16561022,.22 1624 837,11 (6) In % su fatturato 2.46 -2,12 -2,03 049 052 4,43 3,94 — 3,91 — (10)Dipendenti_ 477600 477700 462400 464900 454800 435000 -29900 —-6,43-19800 -4,35 (11) ono merevane =: 10016300 2500-10100-19800 — — -9700 — Key: 1. Prodi's Presidency. 7. Amortizations. 2. Variation (year) vs (year). 8. Net financial charges. 3. Percent Variation (year) vs (year). 9. Economic result. 4. Billings. 10. Employees. 5. Gross operating margin [GOM]. 11. Changes in employee 6. As percentage of billings. totals versus preceding year. [Table 2 on following page]: 95 Table 2 (Article 2) Before and After the TRI Recovery (1) (1) 1979 1982 VAR% 1984 VAR % Item 820u79 84eu82 (2) Fatturato 18345 33077 80,31 41014 24,00 (3) Mol 2970 6844 96,77 7632 28,88 (4) Ammortamenti 1888 2987 58.21 4470 40,65 (5) Oneri finanz: neti 2730 5680 108,06 5987 5,40 ( 6 ) Risutt. economico -1436 -2825 -9673 -2652 6,12 Cash-Flow 462 162 -64,16 1818 1022,2 (7) Dipendenti 477600 464900 -2,66 435000 -6,43 Key: 1. Percent Variations (year) vs (year). 2. Billings. 3. Gross operating margin [GOM]. 4. Amortizations. 5. Net financial charges. 6. Economic result. 7. Employees. 96 the cutback amounts to a little over 6 percent with respect to regular employees: The “axe™ was used but much more lightly than it was elsewhere, above all in private industry. In substance, a complete turnaround has taken place in the IRI during Prodi's past 2 and 1/2 years there (even though few outside the Institute have been aware of it)--a turnaround that is very accurately summarized in the figures presented in Table 2. This table shows that, during the period 1979-82, the group (banks excluded) registered a billings growth of slightly over 80 per- cent (in current lire, hence thanks also to inflation), a rise in losses of close to 97 percent, and a decline in cash flow that barely misses being 65 percent, Between 1982 and 1984, on the other hand, everything changes: a) Billings rose (still in current lire) 24 percent in 2 years; b) The economic balance began improving, even if only by 6.12 percent; c) But above all, the financial charges, which during the preceding period had risen at a much faster rate than billings, are now rising at a rate around five times slower than the rise in sales. The IRI, that is, has been shifted into a reentry orbit: Billings are rising and losses, instead of continuing to rise at a faster rate, as they had been up to yesterday, are shrinking. The cash flow, which had been in a steady and alarming nosedive, is now climbing and very rapidly. In essence, to what is all of this owing? To three factors: a) Greater attention to the problem of debts, whose growth has been brought under control} b) An improvement--in some cases a very dramatic one-- in the results posted by many IRI firms; c) The end of the policy of expansion at all costs: In Prodi's 2 years, the IRI has started divesting itself of firms instead of continuing to acquire them, And this is also an important change of course. [27 Apr 85 p 37] [Article by Giuseppe Turani: "IRI Now Aiming to Break Even"] [Text] In 1984, the group had an overall loss of 2,371 billion lire. This was an improvement of 22.2 percent over the preceding year, owing not to financial operations but to a number of recovery measures. Almost 570 billion lire of losses are the product of debts contracted in past 97 years t.: finance the companies in trouble. Over the past 2 years, 1,500 billion lire of income have been realized from “other" sources. Another 1,500 billion are on the way. But the IRI is demanding a free hand with respect to divestments and rates, Rome--The improvement in IRI's accounts is real and the product of a change in its management and in the interpretation of its role. In Table 1 accom- panying this article we show the consolidated economic balance sheet of the group headed by Romano Prodi for the year 1984, For the time being, the figures are preliminary and could undergo modifications in the very near future, but the trend is very clear. 1. In 1984, the IRI lost, in all, slightly more than 2,371 billion lire. This represents a net improvement of almost 678 billion lire over the pre- ceding year, for a 22.22-percent reduction in losses. And this is a substan- tial accomplishment. To recover almost 700 billion lire in the operations of a group that had been skidding dangerously for many years, saddled with a massive burden of debts and confused strategies, has not been easy, but the operation has succeeded. Of course, this does not mean that the IRI can from now on dream restful dreams; but something has been accomplished. And that something has not been "peanuts," 2. Table 1 shows further particulars. The industrial companies have posted an improvement 556 billion lire in their balance sheets. If account is taken of the IRI's results, of several banking firms operating in the industrial sector, and of the various consolidation operations, the loss (for the indus- trial section as a whole) comes to 2,651 billion lire, as compared with its 1983 loss of close to 3,225 billion lire, The IRI's overall operational improvement (excluding banks) was therefore 573 billion lire. 3. The financial companies, which have always done well, posted for this year a profit increase of more than 40 percent, totaling among them almost 360 billion lire in profits. 4, Adding in the various consolidations brings us to the [above-cited] over- all loss of 2,371 billion lire for 1984, representing an improvement of 22.22 percent over the preceding year. The noteworthy fact regarding these figures is that they do not represent a bunch of financial operations; they are the result of positive interventions in the management of the group. Table 2 provides a detailed analysis in this regard. Some recoveries are clearly visible. Outstanding among them is that of the food sector covered by the SME [expansion unknown]. After years and years of losses, a positive balance of 76 billion lire was finally attained in 1984, for an improvement of over 350 percent with respect to the preceding year. 98 Tables 1 and 2 (Article 3) Table 1 shows the profits and losses of the industrial and banking sectors in 1983 and 1984, The results shown for the IRI (Institute) refer to pre- viously contracted debts. Table 2 breaks down the economic results by individual sectors of the group. Both tables show absolute as well as per- cent variations between 1983 and 1984. Table 1 IRI's Recovery - Economic Result (in Billions of Lire) ~- - — (1) (2) Item 1983 1984 Vieriaz. ess. Variaz. % (3) Tot. sett. industriel . -2429,4 -1872,9 656.5 . 22,91 | (4) Site | en’ 5 3,4 - 212,60 | (5) cof - 64 (87.;. 08. 3,87 (6) Wi (Istituto) _- -=736,7. -667,4 169.3. 22,98 (7) Consotidenenti -68,8 -226,1 -166,3 ~-227,18 (8) Tot. sezione indus. . -3224,9 -2661,7° 673,2 17,77 (9) Banche 264.4 3658.4 (104 40,88 | (7) Consolidementi “78,9 -784 | 086 0,63 (10) Totale consolidsto -3049,4 —2371,7 .- 677,7 . 22,22 Key: 1. Absolute Variation. 2. Percent Variation. 3. Industrial sectors total. 4. SIFA [expansion unknown]. 5. COFIRI [expansion unknown]. 6. IRI (Institute). 7. Consolidations. 8. Industrial section total. 9. Banks. 10. Consolidated total. [Table 2 on following page]: 99 Table 2 IRI Industrial Sectors - Economic Result (in Billions of Lire) (1) (2) 1983 19884 Vieriaz.Ass. Variaz.% (3)Sme -30,2 76 106.2 351,66 Alitalia 93 20,1 10,8 116,13 (4 )itaistat 22,6 46,9 24,3 107,62 (5)Formazione -0,7 0 0,7 100,00 (6)Rai -17,5 -0,6 16,9 96,57 (7 Finsider ~2130,3 -1507 623,3 29,26 (8)Fincantieri -93 -86,1 7,9 8,49 (9)Finmare _=124,1 116 9,1 7,33 (10) Stet ; 481.2 433,1 -48,1 -10,00 (11)Finmeccanica ~-529,9 —609 -79,1. -14,93 (12)Finsiei 6 4,8 -1,2 —20,00 (13) Consolidamenti 286 @8=— 6,7 -21,9 -76,67 (14)Sofin =38,5 -78,6 -40 -103,90 (15)Ex Egam, Spi, Sidaim -12,9 ~66,2 -62,3 406,43 (16)Totale settori ind. -2429,4 -1872,8 666,6 22,91 Key: 1. Absolute Variation, 11. Mechanical Engineering 2. Percent Variation, Corporation. 3. SME [expansion unknown]. 12. FINSIEL [expansion unknown]. 4. ITALSTAT [expansion unknown]. 13. Consolidations. 5. Training. 14, SOFIN [expansion unknown]. 6. Italian Radio Broadcasting 15. Former EGAM [Agency for the and Television Company. Management of Mineral and 7. Iron and Steel Finance Metaliurgical Concerns]; SPI Company. {Industrial Development and 8. Shipyards Finance Corporation, Promotion]; SIDALM [expansion 9. Shipping Finance Corporation. unknown]. 10. Telephone Finance Corporation, 16. Industrial sectors total. 100 The steel manufacturing sector also shows some very interesting signs. Its losses are still substantial (1,500 billion in 1984), but compared with 1983, 623 billion lire less have gone down the drain, Tables 1 and 2, however, also serve to bring forth several concluding thoughts concerning the IRI. Depending on one's viewpoint, it could be argued that the Institute presided over by Romano Prodi is already, as of now, fully recovered. But equally good arguments could be made in support of exactly the contrary. To say at this point that what had to be done has now been done, two facts can be cited. From Table 1 it is seen that the IRI as such--as the Institute itself--still posted, in 1984, a loss of 567 billion lire (which is then added to the results of the operating and banking sectors). What do these losses consist of? Why is the IRI "directly" losing this money? The answer is: Its past. These 567 billion lire are the product of the debts the IRI has had to contract in past years to finance the operating companies down- stream that were in trouble. They are the results of at least 15 years of mistakes. The IRI of today has received these 15 years as a legacy and certainly cannot erase them with a wave of a magic wand. But they are not the result of errors made in 1984, of mistakes in productive and marketing choices, From Table 2 we learn that the steel sector lost, in 1984, still as much as 1,500 billion lire. And this calls for an observation. The problem in the case of FINSIDER [Iron and Steel Finance Corporation] is not a managerial or industrial one, but rather solely a social one. That 15-billion-lire loss can disappear more or less in no time, depending on just how far down the politicians and other social entities (unions, municipalities, regional administrations) will allow the restructurization accelerator pedal to be pressed. That loss might even no longer have existed at this point, had the management of the IRI's steel sector been able to do what they shold have done (that is, shut down Bagnoli and Cornigliano). The decision was other- wise, and so be it. In that case, however, this 1,500-billion-lire loss should not be chalked up against the IRI's balance. It should be accounted for elsewhere, At this point, if one adds up the steel sector's losses and those owing to the Institute's past history, it is clear that Prodi's accounts are already, as of today, in balance. True, there are still entities that are not profit- able (FINMECCANICA [Mechanical Engineering Finance Corporation], for exam- ple), but in what industrial holding company are all companies profitable? Of course, the argument we have thus advanced is a paradoxical one. The IRI is what it is, with its history and its problems; and what counts is solely the actual bottom line. The question thus posed, therefore, is simply: Is Romano Prodi'‘s Institute capable of achieving at least a balanced bottom line, or must it still go on losing, year after year? 101 A response to this question requires bearing in mind that, as of today, the IRI's indebtedness equals its billings. An initial approach, therefore, would be to put into the Institute 15,000 billion lire of fresh money. Under these conditions, the IRI would be out of the red possibly as early as the end of this year, and in any case by the end of 1986. But this does not appear to be a very viable approach. First of all, because the 15,000 billion are not there (where would the state find them?), and secondly because it would not be good policy. Only one other approach remains, therefore: Require that the IRI find the approach to its own recovery, based on its own resources. But is all of that possible, or is it a pipe-dream? Prodi, who is an optimist, continues to say to his co-workers that it is doable. Under what conditions? Not many; perhaps two alone: 1. The Institute must be left free to privatize and to divest non-strategic firms}; 2. The Institute must be able to operate under assured conditions, Let us analyze the first of these. During these 2 years, the IRI has divest- ed itself of many businesses. According to an in-house memo, this approach has yielded sources of income totaling 1,500 billion lire. Additional divestments have already been identified that should bring into the Insti- tute's coffers, as soon as the necessary negotiations are concluded, an addi- tional total of 1,500 to 1,600 billion lire, But that is not all. The experts have made a calculation and have found that the IRI possesses, as of today, enough shares in companies so that if it were to divest itself of those that exceed a 51l-percent ownership (hence without loss of control of some companies), it could realize over 3,500 billion lire, And the fact is that, although very, very discreetly and cautiously, Prodi's people are working on exchanging packages of “superfluous" shares for cash, The real question, however, is another one. Divestments, to date, have involved small- and medium-sized firms, and have each time given rise to a hellish uproar (suffice it to recall the Maccarese case). But will the IRI end up, sooner or later, finding it necessary, logically and economically, (and assuming it finds the necessary buyers) to divest itself of "important" entities as well? At that point, will the party in power and the unions per- mit it to proceed, or will they oppose it? The question is not a theoretical one. There are already many in stock exchange circles today who are asking what good the IRI is getting out of its control of the SME. Try as one might, it is hard to imagine a strategic role for the state in pasta and cookies. Now that the business has been put back on a sound footing, a buyer interested in taking it over could be found. For 102 the IRI, this would mean divesting itself of some problems as well as of some debts. Will it be free to sell? Or will there be a repetition of the Maccarese case? We come now to the second point: “Operating under assured conditions." In substance, this has to do with rates. As of today, around one-third of IRI billings is based on prices that in reality are public-service rates: Tele- phones, highways, maritime companies, etc. Italy is a highly politicized country; hence, the matching of tariff rates to inflation is never automatic Or in any way subject to rules. It depends on the mood of the moment, the social climate of the country, and whatever the minister concerned may have in mind. This all translates into enormous damages and chaotic management, since it is never known at what price one will be able to sell. Among other things, it becomes difficult under these conditions to even sell shares (like those of the STET [Telephone Finance Corporation]), which would indeed be greatly sought after on the market if only there were certainty as regards tariff rates. For some time now, the IRI has been proposing a fair-price "contract" to the government: Let's establish a kind of ceiling (allowing tariffs to increase at a slower rate than inflation, based on a given parameter), then allow us to move freely in accordance with the requirements and standards of business and the marketplace. But to date, nothing has been done about it. Possibly because the politicians like to keep the IRI on a short leash, so to speak, by way of public tariffs. The damage being wrought, however, is substantial. In conclusion: Perhaps it is true that the IRI will be able to succeed in achieving a balanced profit and loss sheet within a reasonable time. But it is also true that in order to succeed it must be able to move flexibly and fast, without extra penalization. Today, it is losing around 2,400 billion lire on bllings of 41,000 billion. The required "recovery" to achieve balance is of the order of 6 percent. That is not negligible when one is saddled with debts totaling 40,000 billion lire and must bear a few burdens like that of its steel sector. | This is not a difficult point to grasp. If tomorrow, by a miracle, the IRI were to succeed in reducing all of FINSIDER's losses (1,500 billion) to zero, it would still not end up with a balanced bottom line. It would still have to find a way to "recover" 900 billion lire, either by improving management or reducing the burden of its indebtedness (which cannot diminish, however, as long as the IRI remains in the red). And for the moment, there is no one in sight willing to grant Prodi the miracle of wiping out his steel sector losses. The approach to a viable IRI may indeed exist, but it is an extremely narrow one. 9399 CSO: 3528/62 103 JPRS-WER~85-053 17 .JTUNF 1 985 ECONOMIC NORWAY FINANCE MINISTER SUBMITS 1986 BUDGET PROPOSALS Oslo AFTENPOSTEN in Norwegian 11 May 85 p 10 [Article by Einar Solvoll] [Excerpts] "There is no reason for any dramatic change in the government's policy, since we now see many positive results,” Finance Minister Rolf Presthus said at a press conference yesterday after .° presented the revised national budget at a cabinet meeting. Inflation is down, unemployment is declining, and growth in the economy is the strongest it has been in 6 years, According to Presthus, the only "fly in the ointment" is that Norway's competitive strength appears to have declined, since Norway has not demon- strated as much discipline in contract negotiations as other countries, Nevertheless, Finance Minister Presthus said that, despite a more costly wage agreement than previously desired, it would now be possible to increase allocations for various projects of high priority, The government wants to pump up municipal and county economies with allocations of 450 million kroner. Of this sum, 300 million kroner will go to public health services. An additional 95 million kroner will go for hospital equipment, universities, other institutions of higher learning, and measures to promote exports, The program for small and medium-sized companies will be granted 10 million kroner. Rural construction funds, the Fishermen's Bank, and the Postal Bank will receive additional credits, Growth in the traditional Norwegian economy is expected to be 3 to 3,5 percent, which is the strongest growth since 1979. Prospects for investments have also improved. This is especially true of investments in industry and mining, which are expected to increase by 25 percent in 1985, Private consumption continues to rise, as a result of higher wage increases than previously expected. More People Working The number of jobs appears to be high and the revised national budget estimates the increase to be 30,000 new jobs created between 1984 and 1985, Unemployment is now declining in many sectors, "If prices and production costs do not increase too sharply, there is a good possibility that the labor market situation will continue to improve in the future," Presthus said, 104 Increased revenues to municipalities and counties are estimated at 10 percent this year, This is 1,8 billion kroner more than the government estimated in its 1985 budget, Inflation Down In early 1981 the inflation rate in Norway was over 15 percent on an annual basis. The rate for the first quarter of this year had been reduced to 5.5 percent, "Just 8 minutes ago I received the price index for last month. It had increased by 5.4 percent in 1 year, This is encouraging news and it gives us hope that we may achieve the 5,5 percent goal," Finance Minister Presthus said at the press conference yesterday. The "fly in the ointment," as the finance minister called it, is Norway's relative competitiveness. As a result of the wage agreements last year, the competitiveness of Norwegian industry did not improve, On the contrary, it dropped by about 2,5 percent in 1984, The increase in wage costs from last year to this year must be less than 6 percent if we are to avoid continued erosion of our competitive strength. In the past, this has proven impossible. The finance minister did not wish to predict the unemployment level for this year. He stated, however, that there were now 55,956 unemployed people, which represents a drop of 13,057 from April of last year to April of this year, The figures on the registered unemployed indicate a decline in many sectors, This reflects the improvement that has occurred in the Norwegian economy, Unemployment in industry and mining dropped by 17 percent from March last year to March this year and by 16 percent in construction, Unknown Oil Price To Give Trade Surplus Oil and gas exports will provide Norway with a trade surplus of about 12 to 13 billion kroner in 1985, This is half the 1984 surplus. Mainland Norway's trade with other countries will result in a deficit that is 14 billion kroner greater than the deficit last year, while oil revenues are expected to increase by about 2 billion kroner, The Finance Ministry presented no estimated oil price for 1985, but an exchange rate of 8,50 kroner per dollar was assumed. AFTENPOSTEN learned that no estimated oil price was given out of consideration to Statoil's participation in the oil market. The document states that, "It was assumed that there would be no major changes in crude oil prices in 1985 simply for the sake of the calculations." The average standard price during the fourth quarter of last year was $27.84 per barrel, it was said, Under these conditions, oil exports will total about 78 billion kroner, which is about the same as last year. If the average exchange rate is 9 kroner per dollar, the export value will increase by about 3,5 billion kroner and taxes 105 and fees to the government will increase by about 2,5 billion kroner, The Finance Ministry estimates that the export of traditional goods will increase by 3 percent, but the volume of imported goods is expected to rise by a whopping 12 percent. As a result, mainland Norway will run a deficit of 50 billion kroner this year, which will be offset by oil and gas exports. The deficit in the so-called "aid balance" is estimated at about 16 billion kroner. 450 Million Too Little The opposition parties in parliament believe that the government should invest more than 450 million kroner in the counties and municipalities, as recommended in the revised national budget, The Labor Party spokesman on financial matters, Gunnar Berge, stated that his party advocated investing 20 billion kroner during the next 4 years to create a broader base for growth in industry and in other sectors of business, 1986: 4 Percent Wage Rise In its revised national budget, the government presents a relatively austere economic picture for 1986. The goal for government expenditures is lower than the budget for this year. This is based on an unchanged credit supply between 1985 and 1986. If Norwegian competitiveness is to improve, then wage increases must be limited to about 4 percent from 1985 to 1986, according to the government. The economic plan for 1986 is based on the assumption that the international upswing will continue. Economic growth among Norway's trade partners is estimated at 2.5 to 3 percent. "This growth should result in a clear increase in traditional Norwegian exports. The goal of growth on a more lasting basis, however, will be achieved only if we can control cost increases in Norway," it was said, The Finance Ministry expects Norwegian oil revenues to remain virtually unchanged from 1985 to 1986 and expects a reduced surplus in foreign trade, The goal is for government expenditures to be limited to 50 percent of the gross national product, excluding oil and shipping, which would mean a reduction from the 50.4 percent figure this year. Another goal is to avoid spending more oil revenues in this country. Concerning its credit policy for 1986, the government stated that an unchanged credit supply, in current kroner, could provide the necessary market condi- tions for reduced interest rates, assuming that our finance policies were not too expansive and price and cost increases were not too high, 106 Interest Dilemma For Government Interest policy represents a dilemma for the government and for the Finance Ministry. The revised national budget stresses the problems we are facing because the domestic credit supply has been higher than previously assumed, while measures to counteract this may result in an increased capital influx from abroad. For now, however, the situation is not seen as alarming, since both the money supply and inflation seem to be under control, The revised national budget now estimates that the money supply will increase by 10.5 percent. This means, however, that the increase in bank loans and the strong influx of capital from abroad must be reduced, The interest rate must be kept high in order to reduce loans made by banks, Additional austerity measures in monetary policy that would increase short-term interest rates are not believed to be suitable, since they would also stimulate th» already strong influx of foreign capital. "In this situation, any additional weakening of our financial policies that would make it more difficult for us to implement our monetary and credit policies must be avoided," it was concluded. At his press conference yesterday, Finance Minister Rolf Presthus stressed that no major changes were anticipated in credit policy or interest rates, Presthus responded to a question, however, by stating that the continuing decline in price rises made him optimistic over the possibility of lower interest rates in the future. 9336 CSO: 3639/113 107 JPRS-WER-85-053 17 JUNE 1985 ECONOMTC PORTUGAL INFLATION SHOWS SIGNS OF SLOWING DOWN Lisbon TEMPO in Portuguese 18 Apr 85 p 13 [Text] The Consumer Price Index (CPI), which is normally used to measure in- flation, rose by 1.6 percent between February and March. In comparison with the first 2 months of the year, in which the figures were 4.3 and 2.7 percent respectively, that indicates a definite deceleration of price rises. Relative to the previous 12 months, the rise in the CPI averaged 23.7 percent, and that, too, was less than the figures for January and February (28.4 and 28 percent). The changes recorded by the Nationa! Statistics Institute are due basically to items classified as "housing expense," which rose by 3.6 percent during March. On the other hand, the increase under the "miscellaneous" heading did not ex- ceed 0.4 percent. Each of the other categories--"food and beverages" and "clothing and footwear"--showed a rise of about 1.5 percent. That ranking of the four categories included in the CPI is somewhat diferent than the one noted for the first 2 months of the year. In January, food and beverages showed the sharpest increase, while in February, first place was taken by the miscellaneous category. Considering the figures of a year ago, the current 1.6 percent means a very significant reduction (prices rose by 3.8 percent in March 1984). When we compare developments in March 1984 with those in March of this year, we find an increase of 23.3 percent in the CPI. Last year, that indicator was 8.5 percent higher. This phenomenon of lower inflation, when measured against the same months of last year, was also noted in the first 2 months of the year. There is reason to believe, therefore, that judging from the results achieved so far, the price of goods in Portugal should rise at a clearly slower rate than last year. This entire trend is also reinforced by the annual average changes in the CPI, which during this first quarter have never exceeded 30 percent, having fallen steadily to stop at 27.8 percent in March of this year. Housing expense at 30.8 percent and food and beverages at 27.6 percent were the two groups of consumer items causing the CPI to rise last month. 108 It should be recalled that a theoretical study recently presented by the Na- tional Development Bank warned specifically that if the government intends to achieve its chosen objectives in the area of inflation--22 percent as an annual average and 18 percent between December 1984 and December 1985--the CPT will have to decline continuously throughout the year. The same document also says that the biggest price increases will probably occur in the first quarter »f the year and that with that quarter ended, th will begin to slow down. The government is therefore to be congratulated on the results achieved so fa a slowdown in comparison with 1984, developments in keeping with the theor: cal studies, and figures below 30 percent. 11798 CSO: 3542/169 109 JPRS-WER-85-053 17 JUNE 1985 ECONOMIC PORTUGAL SIGNIFICANT INCREASE IN FOREIGN INVESTMENT IN 1984 Lisbon TEMPO in Portuguese 3 May 85 p 17 [Article by A. M.] [Excerpts] Continuing the growth recorded in previous years, foreign invest- ment rose by about 73 percent in 1984. The recorded value totaled 27.9 million contos, compared to 16.2 million the year before. Electromechanics, banks and other financial institutions, hotels, tourism, the wholesale machinery trade, and the pharmaceutical, food, and chemical industries were the sectors most attractive to foreign financing (table 1). By country, it is noted that France--our largest trading partner--and the United States-- our largest supplier--accounted for about 50 percent of the foreign investments made in Portugal (table 2). Switzerland and the United Kingdom (each with about 10 percent of the total) and Holland, the FRC, and Japan (about 4 percent each) also achieved some prominence. Judging from the number of businessmen's delegations from various countries that have already visited Portugal, foreign investment will show an even greater increase during the current year. The establishment of joint ventures with Portuguese firms as a means of pene- trating the Common Market with Asian and North American products will be one of the most important forms of investment. Foreign Investment 1984 Table 2: Principal Countries Table 1: Main Sectors of Activity (% of direct foreign investment) Electromechanics 19% United States 35% Banks, financial institutions 15 France 12 Hotels 11 Switzerland 11 Machinery marketing 9 United Kingdom 10 Food industry 5 Holland 4 Chemical industry 5 FRG 4 Metallic ore extraction 4 Japan 4 Source: Institute of Foreign Investment 11798 CSO: 3542/169 110 JPRS-WER-85-053 17 JUNE 1985 ECONOMIC SWEDEN AUSTERITY MEASURES FAIL TO ADDRESS ECONOMY'S REAL PROBLEMS Stockholm DAGENS NYHETER in Swedish 14 May 85 p 2 [Editorial: "Tightening Against the Symptoms"] [Text] Imports rose and the balance of trade began to show a deficit. Everybody, especially the national bank, demanded a tightening. But the gov- ernment said definitely not--there were of course only a few months until the election. Three weeks after the election a number of taxes were raised. Four months later there was a large increase in income taxes. But since the austerity was imposed after the economy had passed the top the result was that the decline was intensified. That was in 1970. This time the minister of finance believes that a tight- ening can not be postponed until after the election. The national bank has given moral support to this decision, which he finally could not resist. Now therefore there are sharp increases in interest, tightened rules for installments, doubled automobile excises, etc. The motivation is the recent currency outflow, which the national bank and the finance ministry interpret as a weakening of the trade balance; and that is seen as a result of the increased imports, especially of consumer goods. Now what they are calling the currency outflow is a net of the gross out- flow (over 400 billion kronor per year) in the trade balance. It it is not immediately apparent what such a net depends on. The choice of counter- measures must be based on a careful analysis of the combined causes in order to get the intended effect. An occasional deficit in the trade balance is a "normal" part of the busi- ness cycle, and nothing to get worried about. But the enormous foreign debt and high interest payments now leave very little margin for such a deficit. The actions of the national bank and the finance ministry perhaps give the impression of power. From another viewpoint they are mostly an adaptation 111 to circumstances. Partly the large internal and external debts have re- duced maneuvering room for economic policies. And partly the national bank can not effectively regulate more than one of the three variables--interest, 0 exchange rate and amount of money. Now there is a fixed exchange rate; they are thereby forced to set the interest that this exchange rate assumes; etc. Penalty interest--which is the interest that banks pay for loans from the national bank beyond a certain limit--is raised from 13.5 to 16 percent. The aim is to reduce the banks lending ard thereby the liquidity in the economy which, in principle, is financing the increase in imports. In recent years the national bank has mainly worked with penalty interest and buying/selling of national paper on the financial markets. The discount rate has remained unchanged over long periods. Now it is rising by two per- cent, from 9.5 to 11.5 percent. That means that outstanding credit will be more expensive; the national bank will in principle draw in purchasing power from borrowers--with a rather capricious distribution; the homeowner group with private loans, who already had relatively high interest payments, will pay the most. The rise in the discount rate, like the tightening of the rules for install- ment purchases and new car purchases, are an attempt to slow the import of consumer goods; they are also aimed at households. But at the same time Feldt is drawing in an additional two billion from businesses, money which will be placed in bound accounts at low interest in the national bank. That certainly gives the state more cheap credits for the budget deficit. But at the same time this collection reduces the financial room of the firms for investment. That does not logically agree with the investment and growth strategy which the economic policy is based on. Certainly investment goods are largely imported. And certainly part of household purchases of capital goods do not comprise a net increase, but only replacements for worn out washing machines and the like. (Statistics on private consumption unfortunately do not have a replacement factor and are therefore misleading.) But since industrial investments are absolutely necessary they should be free of all restrictions. Austerity should instead focus on consumption. Now the finance ministry can not regulate the budgets of all households in detail. There is no guarantee that measures will have the desired effect. If washing machines break down, many fzmilies can elect to take a cheaper vacation and buy a new washing machine, despite credit being more expensive. The most effective way to draw in purchasing power from consumers is to raise the value added tax. Dennis and Feldt are trying to hold liquidity in check and increase savings through increasing interest rates. But with the budget deficit and the public expenditures at today's level they are at the same time financing this liquidity and directing savings into consumption. The basic cause of the lack of balance in the economy remains, despite the head of the national bank and finance minister working diligently on the symptoms. 9287 CSO: 3650/243 112 JPRS-WER-85-053 17 .TINE 1985 ENERGY GREECE DEI ANNOUNCES PRE-ELECTORAL ENERGY PROGRAM Athens I KATHIMERINI in Greek 4 May 85 p 9 [Excerpts] For pre-electoral reasons, and without it having been reported that a new DEI [Public Power Corporation] ten-year development program was being plan- ned and about to be announced, the minister of energy and natural resources, L. Veryvakis, suddenly announced yesterday a "new" DEI ten-year program for 1985-89- 94. The program for the first five years is the well-known DEI program, which has been included in the five-year program for economic development with various im- provements, and which has repeatedly been announced in detail by the government and is already being carried out. The principal points of the program, which Veryvakis announced yesterday, are the following: First, by 1990, a total of 21 new units, which are under construction or program- med, will be placed in the system. Théér total power amounts to 3,191 Mw; thus, there will be a 56-percent increase in the system's power. At the same time, development works in mines will be completed so that, beginning in 1988, their production will reach 53.5 million tons. Thus, towards the end of the first five-years, lignite's portion in electricity production will exceed 80 percent (versus 58 percent in 1984) while oil's portion will practically be reduced to nothing. Second, in order to cover the demand for electricity after 1990, the inclusion of new thermal and hydroelectric works is being planned; more specifically; Thermal Works 1. Inclusion of Agios Dimitrios Unit Number Five beginning in 1991. 2. Inclusion of Komnin&&Unit Number One, which will be fed by the new Komnina mine, also beginning in 1991. 3. Inclusion of Komnina Unit Number Two, or another thermal unit, beginning in 1993. The last depends on the results of the Komnina mine study which is already being worked out. The total power of the three thermal works above amounts to 900 Mw. 113 Hydroelectric Works 1. Inclusion of the Palialonon and Llariona YIE [Hydroelectric Works], on the Aliakmon River, beginning in 1992. 2. Inclusion of the Mesokhora and Sykia YIE, on the Akheloos River, beginning in 1992 and 1993, respectively. However, it is explained that the final scheme for the Akheloos YIE will be determined from the study of the Akheloos' diversion to Thessalia. 3. Inclusion of the Platonovrysi YIE, on the Nestos River, beginning in 1994. The total power of the above YIE amounts to approximately 700 Mw. 924, CSO: 3521/248 114 JPRS-WER-85-053 17 JUNE 1985 ERERGY GREECE BRIEFS ENERGY CONSUMPTION UP--The overall consumption of primary energy increase by 4,9 percent in 1984 as compared to 1983 and reached an equivalent of 17,6 million tons of petroleum according to data released yesterday by the minister of Energy and Natural Resources, Mr, L. Veryvakis. More specifically, this energy was provided by 23.2 percent of brown coal (an equivalent of 4.091 million tons of petroleum), 6.5 percent by imported coal; 62.2 percent (10,949 million tons by petroleum and natural gas; 4.3 percent by hydroelectric plants and 3.8 percent by imported electricity. According to the data of the Ministry of Energy and Natural Resources, the most important developments in the energy balance of the country in 1984 were: The availability of petroleum-natural gas increased by 2.1 percent in 1984 over that of 1979, The consumption of energy by industry increased by 4.2 percent in 1984. [Text] [Athens I KATHIMERINI in Greek 17 May 85 p13] 9731 CSO: 3521/252 115 JPRS-WER-85-053 17 JUNE 1985 ENERGY ITALY CONSIDERATIONS FOR RENEGOTIATING ALGERIAN GAS CONTRACT Rome RASSEGNA PETROLIFERA in Italian 18 Feb 85 pp 124-125 [Article: "Algerian Pipeline Gas Is Too Expensive" ] [Text] What is happening to the price that Italy pays for Algerian gas? After repeated cuts in crude oil prices on the international market, will the cost of natural gas from the Sahara change or not? The answer, unfortunately, is definitely not, but there are some explanations and considerations that may make the pill less bitter. No substantial changes are in sight even in the next few months; Algerian gas will command a high price, and government support will still be neces- sary if SNAM [National Gas Pipeline Company] is to market it at a price that is in line with that of other imported natural gas, The contract between SNAM and SONATRACH [National Company for the Transport and Marketing of Hydrocarbons] (the Algerian flagship company) has not changed a bit in the 2 years since it was signed, thanks to a series of clauses that have practically tied Italy's hands in regular quarterly price review of natural gas extraction. In February 1983, after SNAM had carried out a long campaign, an addition was made on the matter of price; the base price of Algerian gas was pegged to that of a barrel of number 8 crude, which was tied to official OPEC prices. No other market variation, neither individual countries' discounts on crude nor price cutting and spot market fluctuations, has had any further influence on the natural gas market as a whole. Even OPEC's latest price revision, which was decided upon in Geneva 3 weeks ago, has changed practically nothing. At the ENI [National Hydrocarbons Agency], they are saying, "With the most recent decisions, three prices have not been changed from the No 8 crude baseline and four have been cut, but one, the Brassi Blend, has been raised, thus bringing the dollar value per million BTU's of Algerian natural gas in line with the prices already in effect." 116 This state of affairs has persisted since July 1983, when natural gas prices ceased to be pegged to the official price of crude as had been contracted the previous February, but this has had no effect on the total bill paid by Italy. Perhaps this episode explains the mechanism accepted by Rome for the purpose of future agreements with Algeria and consistent supply to Italian industry. When the first official OPEC price rebate went into effect it meant an automatic price cut from $4.41 to $3.58 per million BTU's of Algerian gas, according to available (confirmed) semi-official data never denied by SNAM. In practice, the natural gas acquired from Algeria is still being paid for at 83 cents less than stipulated in the initial contract, but this does not affect the total given SNAM to cover its overpricing policy. The 540 mil- lion lire made available to the company for acquiring and distributing natural gas in the 3-year period of 1983-85 were, as is stated in the well- known law appropriating the sum, "changed into lire strictly at the fixed rate of 1,350 lire to the dollar to cover the difference between economic costs and the actual costs of the gas to be imported." Of course, the ENI has had no trouble in showing, then as now, that the rise of the dollar relative to Italian currency has wiped out any price re- duction and continues to do so. This has recurred even more strongly this very week and made even more unlikely that new official prices of crude will exert a positive influence on that of Algerian methane in the medium term. However, this vicious circle shows some signs of breaking down and making the Algerian position less rigid. Until very recently, Algeria was firmly tied to charging top dollar for natural gas, even at the cost of remaining isolated in this particular market. At the moment, [Italy is not directly concerned; rather, other "customers" of Algeria: France, Belgium and Spain are increasingly restive at paying the rates imposed, and SONATRACH has been forced to hold international meetings. It did so with the Americans, who suspended imports in 1983; it is doing so with Spain's ENAGAS [expan- sion unknown] which is drawing no more than one-third of the amount stipu- lated in the 1976 contract. To keep the controversy from getting out of hand, Algeria decided not to apply penalties to the French Gas Company and Belgium's Distrigaz, which last year decided to reduce imports by 19.6 and 40 percent respectively. Among other things, experts have calculated that if the official price of crude should fall below $26 in the near future, Algeria might see its na- tural gas prices drop relative to those of competitors who have set theirs on a more flexible scale, namely a mix of individual petroleum products and alternative energy sources. In addition, it should not be forgotten that the present Algerian potential is 40 billion cubic meters annually of exportable gas and that present sales do not exceed 50 percent of this capability. Finally, the Soviet Union and the Netherlands seem ready to revise old contracts with a view to reducing prices in light of growing import volume and energy market demand. 117 These considerations will almost certainly be brought up by SNAM when it renegotiates the contract with SONATRACH next fall. In addition, the president of the Italian company, Enzo Barbaglia, who presented private businessmen last November with a series of incentives for those using methane instead of other energy sources said he was sure that "considering present price declines all across the energy market, Italy should find its Algerian counterparts more tractable than they have been." 8782 CSO: 3528/71 118 JPRS-WER~85-053 17 TNR 1985 ENERGY | PORTUGAL NUCLEAR ENERGY SEEN AS NO SOLUTION TO PROBLEMS Lisbon DIARIO DE NOTICIAS in Portuguese 25 Apr 85 p 5 [Text] Nuclear energy cannot in any way solve Portugal's economic and energy problems in the short or medium term, according to the annual report by the International Energy Agency [IEA] that was released yesterday. The report says that the installation of nuclear energy--always a capital- intensive project--in Portugal will require a "substantial foreign investment that will yield profits only as the operation proceeds." It is recommended, however, that the government keep its nuclear options open by completing the preliminary studies of sites for possible plant construction and of the existing technological differences. The disagreements concerning nuclear energy are recognized, but the report adds that "it would be deplorable if, for lack of a consensus on nuclear energy, rapid approval and implementation of the National Energy Plan were to be pre- vented." On the subject of renewable energy sources, the report recommends that "except for hydroelectric energy, current technologies for renewable sources do not provide a solution for meeting Portugal's needs." It is also stated, however, that ''Portugal is one of the IEA members with the best conditions for exploiting renewable energy sources" and that they may meet part of its needs in the medium term. In conclusion, the IEA's annual report presents a set of recommendations to the Portuguese Government on these matters. Specifically, the government should "implement a national energy policy, particularly as regards those options having a short- or medium-term impact on the demand for petroleum products." 11798 CSO: 3542/169 - END - 119 END OF FICHE DATE FILMED 25 JUNE $5