Foreign Relations of the United States, 1955–1957, Eastern Europe, Volume XXV

45. National Intelligence Estimate¹

NIE 12–56

Washington, January 10, 1956.

PROBABLE DEVELOPMENTS IN THE EUROPEAN SATELLITES THROUGH 1960

The Problem

To estimate the current situation and probable developments in the European Satellites² through 1960.

Conclusions

1. The military, political, and economic significance of the Satellites to the USSR is so great that Moscow almost certainly regards the maintenance of control over the area as an essential element of its power position. The Satellites provide the Soviet Union with a defense in depth and an advanced position for launching attacks on western and southern Europe. The Satellite regimes themselves are valuable to the USSR as instruments in the conduct of Soviet foreign policy, propaganda, and economic and subversive operations. The Satellites represent an important element of over-all Bloc economic strength. The total gross national product (GNP) of the Satellites is roughly two-fifths that of the USSR and includes significant production of certain key materials and heavy manufactures. (Paras. 12–16, 48–51)

2. The USSR now has, for all practical purposes, complete control over the Satellite regimes and will almost certainly be able to maintain it during the period of this estimate. Within the limitations suggested below with respect to East Germany and Albania, we believe that it will remain firm Soviet policy to retain such control. This control rests fundamentally on the USSR’s military capability of maintaining its domination over the area. Control is exercised primarily through the Satellite Communist parties, assisted and guided by a complex of Soviet diplomatic and military establishments, economic advisors, and police agencies. Moscow has made clear that the status of the Satellites is not a matter for international negotiation. In the case of Germany, the USSR has held open the possibility of reunification on the basis of negotiations between the East and West German regimes. We believe, however, that the USSR will not voluntarily relinquish East Germany except in exchange for a solution of the German problem favorable to Soviet interests. It is also possible that the USSR might be willing to reconsider its position with regard to Albania. For example, there is a slight chance that the physical isolation of Albania from the Soviet Bloc and its minor strategic value to the Bloc would induce Moscow to use Albania as a pawn in Balkan intrigue. (Paras. 14, 17, 22)

3. The maintenance of effective Soviet control over the Satellites does not preclude policy modifications calculated to take greater account of local conditions, to promote smoother economic development, and to diminish the impact of Soviet rule on Satellite national sensibilities. In addition, Moscow might expect that such measures would document the claim of Satellite independence, and would thereby impress opinion in neutral and underdeveloped countries and improve the propaganda position of Free World Communist parties.

4. Despite Moscow’s firm control of the Satellites, there are a number of local factors which hamper the execution of Soviet policy. In some of the Satellites factionalism has become evident in the party leadership and has caused confusion in the program. Some elements privately resent dictation by Moscow and favor a reduction of political terror and an increase in consumer goods. There are many party members with a nationalist tinge who constitute a potential for “deviation.” All the governments are still confronted with problems arising from their unpopularity with the masses and from the difficulties inherent in developing an efficient administration in a totalitarian state under an alien ideology. We believe, however, that none of these difficulties will jeopardize either the control by Moscow-oriented Communists or the implementation of Soviet policy.³ (Paras. 27–28)

5. Dissidence⁴ is widely prevalent in the Satellites. It is unlikely that an additional five years of Communist rule will appreciably reduce this dissidence, or greatly diminish the traditional national aspirations of the East European peoples. On the other hand, dissidence is offset by a tendency of the Satellite population to become resigned to Communist rule and by the gradual increase in the number of Communist-indoctrinated youth. We believe that, except possibly in East Germany, no development short of a drastic impairment of Communist controls or the approach of friendly forces in time of war would be sufficient to stimulate important outbreaks of open resistance. (Paras. 31–35)

6. The Satellite regimes have as fundamental goals the expansion of industry, the collectivization of agriculture, and the Sovietization of the countries generally. In 1953, however, faced with mounting difficulties, they reduced the pressure for rapid achievement of these goals. Industrialization and collectivization of agriculture were slowed and police controls became somewhat less obtrusive. In early 1955, however, pressures for increasing output were revived, the priority of heavy industrial development was re-affirmed, and collectivization efforts were renewed. These modifications do not appear to represent a full return to the pre-1953 program. (Paras. 36–40)

7. We estimate that the Satellite economies, taken together, will increase their GNP through 1960 at the rate of slightly less than four percent per annum, a substantial decline from the extraordinary average annual rate of over seven percent achieved in 1949–1954. Satellite agricultural output in 1960 will probably be about 11 percent greater than in 1954, while nonagricultural production will increase by about 28 percent. Meanwhile, total population is expected to increase about seven percent by 1960. Manufactured consumer goods will account for the major part of the small prospective rise in living standards. (Paras. 43–47)

8. During the period of the estimate Satellite trade with the Free World may continue to rise somewhat faster, in percentage terms, than total Satellite trade. For economic as well as political reasons, the Satellites apparently desire to increase their trade with the Free World. In the absence of substantial medium- or long-term credits from Free World countries, however, an early expansion of Satellite exports will be necessary to balance any increase in imports from the Free World. This confronts the Satellites with the problem of adjusting the character and prices of their exports and their way of doing business, in order to improve their position in Free World markets. It will probably be easier for the Satellites to increase trade with the underdeveloped areas than with the industrial countries of the West. (Paras. 52–54)

9. We believe that the scope of Bloc-wide action mark⁵ regional planning will substantially increase as compared with the period 1949–1953. During the period of this estimate, this policy will probably not contribute greatly to the growth of the economy or to the resolution of basic economic problems, although some benefits can be expected. Over a longer period, integration may make significant contributions to the economic strength of this area. (Paras. 55–58)

[Here follows the “Discussion” section of the Estimate.]

1. Source: Department of State, INR–NIE Files. Secret. A note on the cover sheet reads:

   “The following intelligence organizations participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff.

   “Concurred in by the Intelligence Advisory Committee on 10 January 1956. Concurring were the Special Assistant, Intelligence, Department of State; the Assistant Chief of Staff, Intelligence, Department of the Army; the Director of Naval Intelligence; the Director of Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.”

   According to a note from Macomber to Barnes, undated, attached to a memorandum from Armstrong to Dulles, February 7, summarizing NIE 12–56, the Secretary saw an advance copy of the conclusions of NIE 12–56; consequently the summary memorandum of February 7 and NIE 12–56 were not shown to the Secretary. (Ibid., Central Files, 760.00/2–5756)

2. As used in this paper the term “European Satellites” includes East Germany, Poland, Czechoslovakia, Hungary, Rumania, Bulgaria and Albania. [Footnote in the source text.]
3. The Assistant Chief of Staff, Intelligence, Department of the Army and the Deputy Director for Intelligence, The Joint Staff, while conceding the existence of certain ideological and administrative problems in the Satellites, nevertheless, believe these problems are currently of no great magnitude and are likely to diminish during the period of this estimate. They would therefore omit this conclusion. [Footnote in the source text.]
4. On this subject, see NIE 10–55, “Anti-Communist Resistance Potential in the Sino-Soviet Bloc,” dated 12 April 1955. “Dissidence” is defined as a state of mind involving discontent or disaffection with the regime. “Resistance” is defined as dissidence translated into action. [Footnote in the source text; NIE 10–55 is not printed.]
5. The terms “Soviet Bloc,” “Bloc-wide,” or “intra-Bloc” refer to the USSR and the European Satellites. Where Communist China is also referred to, the term “Sino-Soviet Bloc” will be used. [Footnote in the source text.]