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tionism" among the local Communist leaders
c. The Problems of the Western Powers.
most certainly restricted Soviet freedom of
It was generally assumed that the Western
action in the CFM. The USSR could not
Powers entered the CFM in a stronger bar-
make a long-term play for a united Germany
gaining position than ever before. On the
partly because its control over the satellites
surface this was true. They had made sub-
was not strong enough to risk the antago-
stantial progress in political, military, and
nisms that such a policy would arouse in Po-
economic consolidation in Western Europe.
land and Czechoslovakia. Before it can make
Confidence throughout Europe had generally
this play it must eliminate, if it can, all traces
replaced uncertainty and despair. At the
of "deviationism" among the satellite Com-
same time, the USSR was obviously somewhat
munist leaders.
on the defensive in consequence of weaknesses
The second basic weakness in the Soviet
within its own sphere of influence.
position at the CFM was economic. Its own
This advantage, however, was only momen-
economic development has not been proceed-
tary-a matter of time rather than of funda-
ing as rapidly as desired, and the satellite
mentals. The basic economic difficulties fac-
economies were in some instances actually
ing the Western Powers had not been solved
deteriorating. The satellites have recognized
and the problems of a revived Germany were
that they have suffered substantially from
in the offing.
their economic orientation toward the USSR
(1) The Economic Problem.
and this has further stimulated nationalist
The fundamental economic weaknesses in
"deviationism." The USSR thus had need of
the Western position-not in terms of mili-
a relaxation in tension that would facilitate
tary potential but of healthy international
increasing East-West trade. It has now given
economic relationships-have suddenly burst
the satellites a freer hand in making what
into full view. It has always been question-
economic deals they can with the West. The
able whether the ERP program would succeed
USSR is clearly counting on a US depression
in restoring the viability of the economies of
and a world-wide buyer's market to force the
the UK and Western Europe in terms of a
Western Powers and West Germany to seek a
prewar standard of living. The sudden dollar
market for their surplus production in the
crisis of the UK, following SO quickly upon
East.
only a moderate business recession in the US
Nationalism and economic weaknesses,
and a general shift from a seller's to a buyer's
therefore, stand out at the moment as basic
market, serves to emphasize the magnitude
deterrents to direct Soviet aggression, either
of the problems still facing the Western Pow-
political or military. Soviet leaders in the
ers in their efforts to recreate a healthy inter-
period ahead will undoubtedly concentrate on
national economy. These problems derive
finding solutions to these problems. The
primarily from the operation of long-term
problem of nationalism is of particular sig-
forces within Western society which have in-
nificance, if, as it appears, their long-term
creasingly affected the stability both of the
objectives envisage complete Soviet domina-
internal structure of individual states and the
tion of a Communist world. However, if they
19th century system of international eco-
fail to resolve it in terms of a Soviet interna-
nomic relationships. World Wars I and II
tional dictatorship they have an unpalatable
merely accelerated a basic trend toward dis-
alternative solution in terms of an alliance
equilibrium. They further reduced the invis-
of states bound closely together by the com-
ible income of the UK and the colonial powers
mon bond of Communism and an antipathy
of Western Europe, dislocated established pat-
toward the non-Communist world. In the
terns of trade, and accelerated changes in the
meantime, they can take comfort in the hope
that the serious problems facing their adver-
competitive positions and economic structures
saries in the West may open up to them op-
of the various states. The dollar shortage
portunities that are not now clearly present
and the patent impossibility of maintaining
or that they are not strong enough to create.
free convertibility of currencies are merely
SECRET
E. O. DECLASSIFIED 11652, Sec. 3(E) 3.312,274 and 5(D) of (E)
letter,
NARS
Date
4-4-77
By
NLT-
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"ocrText": "SECRET\n4\ntionism\" among the local Communist leaders\nc. The Problems of the Western Powers.\nmost certainly restricted Soviet freedom of\nIt was generally assumed that the Western\naction in the CFM. The USSR could not\nPowers entered the CFM in a stronger bar-\nmake a long-term play for a united Germany\ngaining position than ever before. On the\npartly because its control over the satellites\nsurface this was true. They had made sub-\nwas not strong enough to risk the antago-\nstantial progress in political, military, and\nnisms that such a policy would arouse in Po-\neconomic consolidation in Western Europe.\nland and Czechoslovakia. Before it can make\nConfidence throughout Europe had generally\nthis play it must eliminate, if it can, all traces\nreplaced uncertainty and despair. At the\nof \"deviationism\" among the satellite Com-\nsame time, the USSR was obviously somewhat\nmunist leaders.\non the defensive in consequence of weaknesses\nThe second basic weakness in the Soviet\nwithin its own sphere of influence.\nposition at the CFM was economic. Its own\nThis advantage, however, was only momen-\neconomic development has not been proceed-\ntary-a matter of time rather than of funda-\ning as rapidly as desired, and the satellite\nmentals. The basic economic difficulties fac-\neconomies were in some instances actually\ning the Western Powers had not been solved\ndeteriorating. The satellites have recognized\nand the problems of a revived Germany were\nthat they have suffered substantially from\nin the offing.\ntheir economic orientation toward the USSR\n(1) The Economic Problem.\nand this has further stimulated nationalist\nThe fundamental economic weaknesses in\n\"deviationism.\" The USSR thus had need of\nthe Western position-not in terms of mili-\na relaxation in tension that would facilitate\ntary potential but of healthy international\nincreasing East-West trade. It has now given\neconomic relationships-have suddenly burst\nthe satellites a freer hand in making what\ninto full view. It has always been question-\neconomic deals they can with the West. The\nable whether the ERP program would succeed\nUSSR is clearly counting on a US depression\nin restoring the viability of the economies of\nand a world-wide buyer's market to force the\nthe UK and Western Europe in terms of a\nWestern Powers and West Germany to seek a\nprewar standard of living. The sudden dollar\nmarket for their surplus production in the\ncrisis of the UK, following SO quickly upon\nEast.\nonly a moderate business recession in the US\nNationalism and economic weaknesses,\nand a general shift from a seller's to a buyer's\ntherefore, stand out at the moment as basic\nmarket, serves to emphasize the magnitude\ndeterrents to direct Soviet aggression, either\nof the problems still facing the Western Pow-\npolitical or military. Soviet leaders in the\ners in their efforts to recreate a healthy inter-\nperiod ahead will undoubtedly concentrate on\nnational economy. These problems derive\nfinding solutions to these problems. The\nprimarily from the operation of long-term\nproblem of nationalism is of particular sig-\nforces within Western society which have in-\nnificance, if, as it appears, their long-term\ncreasingly affected the stability both of the\nobjectives envisage complete Soviet domina-\ninternal structure of individual states and the\ntion of a Communist world. However, if they\n19th century system of international eco-\nfail to resolve it in terms of a Soviet interna-\nnomic relationships. World Wars I and II\ntional dictatorship they have an unpalatable\nmerely accelerated a basic trend toward dis-\nalternative solution in terms of an alliance\nequilibrium. They further reduced the invis-\nof states bound closely together by the com-\nible income of the UK and the colonial powers\nmon bond of Communism and an antipathy\nof Western Europe, dislocated established pat-\ntoward the non-Communist world. In the\nterns of trade, and accelerated changes in the\nmeantime, they can take comfort in the hope\nthat the serious problems facing their adver-\ncompetitive positions and economic structures\nsaries in the West may open up to them op-\nof the various states. The dollar shortage\nportunities that are not now clearly present\nand the patent impossibility of maintaining\nor that they are not strong enough to create.\nfree convertibility of currencies are merely\nSECRET\nE. O. DECLASSIFIED 11652, Sec. 3(E) 3.312,274 and 5(D) of (E)\nletter,\nNARS\nDate\n4-4-77\nBy\nNLT-"
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