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TOP SECRET -16- this troubled area. Although Communist China faces serious economic problems which may impose some strains on the Soviet economy, it is probable that the social and economic problems faced by the free nations in this area present more than off- setting opportunities for Communist expansion. Third, the Soviet Union holds positions in Europe which, if it maneuvers what's new skillfully, could be used to do great damage to the Western about this? European economy and to the maintenance of the Western orien= tation of certain countries, particularly Germany and Austria. Fourth, despite (and in part because of) the Titoist defection, This the Soviet Union has accelerated its efforts to integrate cuts both satellite economy with its own and to increase the degree of ways autarchy within the areas under its control. Fifth, meanmhile Western Europe, with American (and Canadian) assistance, has achieved a record level of pro- How duction. However, it faces the prospect of a rapid tapering persons No off of American assistance without the possibility of achiev- this ing by its own efforts a satisfactory equilibrium with the dollar area. It has also made very little progress toward "economic integration", which would in the long run tend to improve its productivity and to provide an economic environ- ment conducive to political stability. In particular, the movement towards economic integration does not appear to be rapid enough to provide Western Germany with adequate economic opportunities in the West. The United Kingdom still faces economic problems which may require a moderate but politically difficult decline in the British standard of living or more American assistance than is contemplated. At the same time, a strengthening of the British position is needed if the stability TOP SECRET SERVICE

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    "ocrText": "TOP SECRET\n-16-\nthis troubled area. Although Communist China faces serious\neconomic problems which may impose some strains on the Soviet\neconomy, it is probable that the social and economic problems\nfaced by the free nations in this area present more than off-\nsetting opportunities for Communist expansion. Third, the\nSoviet Union holds positions in Europe which, if it maneuvers what's\nnew\nskillfully, could be used to do great damage to the Western\nabout\nthis?\nEuropean economy and to the maintenance of the Western orien=\ntation of certain countries, particularly Germany and Austria.\nFourth, despite (and in part because of) the Titoist defection,\nThis\nthe Soviet Union has accelerated its efforts to integrate\ncuts\nboth\nsatellite economy with its own and to increase the degree of\nways\nautarchy within the areas under its control.\nFifth, meanmhile Western Europe, with American (and\nCanadian) assistance, has achieved a record level of pro-\nHow\nduction. However, it faces the prospect of a rapid tapering persons\nNo\noff of American assistance without the possibility of achiev-\nthis\ning\nby its own efforts a satisfactory equilibrium with\nthe dollar area. It has also made very little progress toward\n\"economic integration\", which would in the long run tend to\nimprove its productivity and to provide an economic environ-\nment conducive to political stability. In particular, the\nmovement towards economic integration does not appear to be\nrapid enough to provide Western Germany with adequate economic\nopportunities in the West. The United Kingdom still faces\neconomic problems which may require a moderate but politically\ndifficult decline in the British standard of living or more\nAmerican assistance than is contemplated. At the same time,\na strengthening of the British position is needed if the\nstability\nTOP SECRET\nSERVICE"
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