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147. Telegram 61177/Tosec 726 From the Department of State to the Consulate in Jerusalem1

Subject: Portugal: Contingencies and Recommended Courses of Action—Action Memorandum (S/S 750446) for the Secretary from Sonnenfeldt (Secto 317).

1. In reply to your request, Hartman, Hyland, Vest, Lord, Clift, and I have developed the following analysis of current situation in Portugal. We have emphasized possible U.S. courses of action in the short term to try to influence events there during the next few weeks. This assessment, which will obviously be ongoing effort, concludes by recommending that Carlucci go into Costa Gomes with a tougher line; that we begin senior-level consultations with key Allies on deteriorating situation in Portugal; that we encourage European socialists to counsel moderation in Lisbon; and we begin immediate consultations with key Congressional leaders. We also raise possibility of you discussing Portugal in your meeting with Gromyko.

I. Political situation

2. As a result of the inept, unsuccessful coup attempt of March 11, Portugal has moved sharply toward a leftist military dictatorship. The effect of the abortive attempt has been to:

—Disengage what had been the increasingly strong moderate brake on the Armed Forces Movement (AFM) leftists and to place serious, if not insurmountable, obstacles in the path of a resurgence by the moderate AFM majority;

—Strengthen AFM leadership elements, especially Prime Minister Goncalves and General Carvalho, who have a marked suspicion of the U.S.; a strong bias toward third world causes; and a pronounced leftist bent.

3. Leftist AFM leaders have moved rapidly to consolidate their position.

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—They quickly grasped the opportunity to discredit moderate military and civilian leaders, whether or not involved in the attempt and some have been arrested.

—In a governmental reorganization that is still underway, they abolished a number of principal governmental institutions and created a new, apparently all-powerful, Superior Council of the Revolution (CSR).

4. The 24-member CSR, which is chaired by President Costa Gomes in his capacity as Armed Forces Chief of Staff, consists of:

—Portugal’s 7 senior military officers;

—the 7 members of the AFM’s Leftist Coordinating Committee;

Goncalves and Carvalho;

—8 newly-surfaced middle grade officers.

5. Consequently, the Council appears to have a decidedly leftist coloration, with moderate representation limited to Costa Gomes and a few other senior military men. The ability of Costa Gomes to revive and lead the moderates is open to serious question.

6. The CSR has reaffirmed the AFM’s commitment to the holding of constituent assembly elections on April 12 but the results, while not irrelevant to future developments, will be less meaningful than was hoped because the AFM’s leaders have made even clearer then before that they intend to run the country whatever the outcome.

7. Moreover, the political party scene is in disarray and the moderate parties have been intimidated.

—The important and potentially powerful center-right coalition of the Christian Democrats (PDC) and the Social Democratic Center (CDS) may well be banned by the AFM. These two parties, so important to the maintenance of any semblance of balance in Portuguese politics, are under severe attack from the left for alleged complicity in the coup attempt and the headquarters of both parties have been ransacked by mobs.

—If these two parties are banned, the center-left Popular Democrats (PPD) would remain the only permissible party to the right of the Socialists and would be subject to even more harassment than they have been in the past.

—The Socialists are alarmed and are trying to establish a modus vivendi with the Communists (PCP), although this reportedly will not include the presentation of a unified Communist-Socialist slate of candidates this attempt to paper over differences with the PCP is a basic reversal of Socialist policy. Up to now, the Socialists had tried to distance themselves from the Communists and to attack them on a broad spectrum of issues.

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—The Communists and Communist-front Portuguese Democratic Movement (MDP) have taken particular satisfaction in the AFM’s reaction to the coup attempt. They are certain to intensify their efforts to identify as closely as possible with the AFM and to convince its leadership that Communist cooperation is essential for the implementation of the AFM program.

8. Because of the widespread uncertainty that characterizes the political scene, it is impossible to predict how the election will turn out.

—By discrediting the center-right coalition, the AFM could ensure a very strong showing by the Popular Democrats.

—However, if the more conservative citizenry is intimidated and stays away from the polls, the result could be a stronger-than-expected showing by the Communists, who until the coup attempt had not been expected to gain more than 20 [percent] of the vote.

9. In any case, the holding of elections, if they are free, is clearly preferable to their cancellation and holds out the possibility that, over time, a civilian power center with a popular mandate could begin to have some impact on policy.

10. We see the current political situation developing in any one of three possible ways:

—The moderates will regain a meaningful policy input, successfully maintaining Portugal’s present foreign policy orientation, but probably having to acquiesce in a strongly Socialist domestic policy.

—The AFM leftists will completely consolidate their position and establish a radical, nationalist, non-Communist, military regime, probably with Communist support, similar to those in Peru or Libya, with a tendency toward a non-aligned posture.

—Portugal, under increasing influence from the Communists, will move toward a Communist regime, oriented toward the Soviet bloc.

11. None of these can be excluded now, though the chances of the first have been reduced during the last week. Prospects for the second or third depend on relations between the dominant military group and the Communist Party and on relations between the PCP and the Soviet Union.

II. Economic Situation

12. The only specific economic policy statements to emerge thus far have been the announcements that Portugal’s major banks and insurance companies have been nationalized. These moves, advocated for some time by the Communists, are radical departures from the recently approved economic program, which had been considered a victory for the moderates. They reflect the widespread hostility toward the Portuguese oligarchy, which controls the banks and related industries and is so closely identified with the Salazar-Caetano regime.

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13. Current GOP policies are likely to exacerbate Portugal’s existing economic troubles. The nationalization of the entire banking and insurance systems, the wholesale arrests of prominent business leaders and the exacerbation of existing production bottlenecks for Portugal’s agricultural products and manufactures will accelerate the already evident deterioration of the economy. Tourist revenues will decline again as in 1974, unemployment may double from its current five percent level, and sure foreign investment is likely to withdraw. Most ominously, foreign exchange reserves (which dropped about one billion dollars in 1974) are likely to dwindle to the acute shortage level by the end of this year. In this contingency, Portugal could (1) ask the West for help, (2) ask other countries (the Arabs or the Soviets) for help in return for political concessions, or (3) take desperate measures, such as complete nationalization, moving domestically toward a controlled economy with accompanying political repression.

III. Portugal and NATO

14. A March 14 statement of AFM policy reaffirms Portugal’s determination to comply with its international obligations and agreements. This is the same theme that the GOP has been sounding since Spinola’s initial takeover, and is probably worth taking at face value for now, but there is no certainty that this will remain Portuguese policy. On the contrary, the likely radicalization of the regime points to alterations of Portugal’s ties with NATO and with the US.

15. We cannot yet gauge how the Allies will react to developments in Portugal, but we suspect they will express serious concern privately but temporize when it comes to action. If we judge that pressure, criticism, or quarantine measures need to be applied, we will have to use strong persuasion with the major Allies, some of whom will argue that such measures might produce the worst possible result in Portugal. In any case, we should be prepared to emphasize to key Allies that our common approach to Portugal will be taken as reflecting the political developments the Allies are willing to accommodate elsewhere in NATO Europe.

16. We envisage two basic ways the Portuguese NATO relationship can evolve:

A) Portugal stays in NATO. It is possible that Lisbon will, despite internal radicalization, make every effort to remain on its best behavior in NATO, as one of its main links to the West. We cannot overlook the possibility, however, that a radical Portugal within NATO—whether it participates in NATO military activities or stays only in political functions—could pose unprecedented problems for the Alliance. There would be major security problems even if Portugal were quote quarantined unquote from military activities. There would also be the pros[Page 501]pect—if Portugal felt it advantageous—of its engaging in obstructionism in political consultations, or leaking Council discussions to its advantage.

Inside NATO, Portugal would have two alternatives:

17. Partial severance of ties with NATO. Portugal could emulate the French or Greek precedents of withdrawing from NATO military activities. Here, the US and the Allies would be under some pressure to react with the same basically tolerant approach with which they have so far treated the partial Greek withdrawal from NATO. A strong case could be made in NATO circles that, in light of Portugal’s domestic politics, it should not be allowed to establish a partial membership in NATO, and should be treated more severely than Greece. But both the Greek case and internal Allied politics will weigh in the direction of treating Portugal the same way as Greece. We will face an uphill road if we want a tougher NATO stance.

18. Portugal remains in NATO and seeks no changes in its status. This case could pose serious difficulties. With the membership of a Communist minister in the Portuguese Government, NATO at US initiative, reacted by depriving Portugal of access to cosmic and nuclear-related NATO materials. With a more radical Portugal seeking to remain as a full member, NATO would probably react over time by seeking further sanitation of the Portuguese role. Lisbon might be excluded from an array of planning and intelligence activities. In any case, the Allies would be faced with the prospect of judging a member’s participation in NATO activities by its internal politics. This would be a new and uncomfortable role for the Allies. It could divide them and subject the Alliance to criticism. Such a scenario might anger Lisbon and prompt it to obstructionism in NATO, or indeed induce it to withdraw wholly from the Alliance.

19. B) Withdrawal from NATO. While a year is required for denunciation of NATO membership to take effect, Portugal could in practical terms quickly sever its ties with NATO activities. By and large we would expect that a clean break would be taken as a fact by the other Allies. The damage to NATO military interests in mainland Portugal would be minimal. Lisbon is headquarters of the Iberian Command Atlantic (IBERLANT), a small NATO command that is probably of greater symbolic value to Portugal than of military value to NATO. Other NATO assets are relatively minor, but the psychological damage would be serious coming on top of developments in the Eastern Mediterranean. The major military implication to the Alliance would be with regard to contingency use of the Azores in support of NATO, both by the US and by other Allies, which is provided for in the US-Portuguese bilateral agreements on the Azores.

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20. More generally, Portugal out of NATO would be freed from constraints which even a maverick’s role in the Alliance would impose on Lisbon, and would be cut off from moderating influences which could be important over the long term.

21. Whether Portugal stays in NATO as a full or partial partner, we will face a major proliferation of informal subgroups, partial exclusions (as from the NPG), and general debilitation of NATO’s military and political institutional integrity that began with the French withdrawal and has deepened in the last year as result of difficulties with Greece and Portugal. Under either of these cases, the Azores might remain available to us.

IV. The Spanish Connection

22. Continued instability in Portugal will insure that Spanish interest will remain at a high level, increasing the potential for tension between the two governments. However, we believe that the Spanish Government will, despite such concern, maintain its present policy of preserving correct relations with Portugal and avoiding actions which would appear to indicate Spanish intervention. The durability of this policy will depend in large part on the willingness and capability of the Portuguese leaderships to hold a similar line vis-à-vis Spain. One irritant in governmental relations has been criticism of Spanish policies in Portugal’s media, including Spanish-language radio broadcasts.

23. Any Spanish involvement in activities aimed at Portugal could prove embarrassing to the U.S. and to other Allies, putting a strain on bilateral relations with either Lisbon or Madrid. In the case of overt Spanish military action against Portugal, additional problems would be raised by Article V of the North Atlantic Treaty, by which an attack against one is considered an attack against all. (We would not overemphasize this legal point, which has also been raised in connection with Greek-Turkish hostilities, but it would place an added strain on the NATO framework.)

24. It is possible that, if Portugal opts out of NATO or is in increasingly bad odor in Brussels, Spain will see an opportunity for attaining membership in the Alliance more easily than otherwise, on the grounds of filling Portugal’s previous role. Spain asked the U.S. to support its candidacy for NATO membership in last week’s round of bilateral negotiations. The other Allies, however, are likely to take an extremely cautious view on Spanish membership, even in a post-Franco situation. Moreover, they would have before them the example of turmoil in post-authoritarian Portugal.

25. If it appears that the U.S. will lose access to the Azores, Spain may also see its hand strengthened in its base negotiations with the U.S. On the other hand, Spanish concerns over a radical Iberian neighbor [Page 503]will increase their desire to avoid complete isolation from the West, and, on balance will probably make Spain more willing to accept an agreement on our terms.

V. The Azores

26. Regardless of actions Portugal may take with regard to its role in NATO, we will need to focus on the different alternatives for the relationship of the Azores with regard to mainland Portugal most compatible with our interests, and with overall policy considerations. Despite comments by local parties in the Azores, there is little possibility of an independence movement there having any success. Any indications that the USG was encouraging such a movement would play directly into the hands of the military leaders of the Azores, who are young AFM officers who take their orders directly from Lisbon.

27. Therefore, whatever arrangements we make for the Azores, [less than 1 line not declassified] will have to be with the Lisbon regime. Our principal hope is that the left-wing leadership in Portugal will choose to leave the problem alone. So long as Portugal maintains its present attitude toward NATO membership, it is probably that our position at Lajes will not be affected. Once NATO relationships come into question, the future of the base will also be at stake, although the possibility that Portugal would remain in NATO and not wish to have a foreign base on its soil cannot be excluded.

28. The U.S. should analyze quickly the value of Lajes base and decide where any of its operations could be transferred, if so required. It should be borne in mind that even if the new leftist regime in Lisbon does not ask us to leave, relations on the local scene will be more difficult. Anti-American trends, increasingly exported from Lisbon, have begun to be felt.

VI. The Soviet Dimension

29. Portuguese relations with the USSR and other Eastern Bloc countries have intensified steadily over the past year. This trend is certain to continue, and is likely to accelerate somewhat, in the wake of the abortive coup attempt. Commercial, aviation, and maritime agreements have been signed and are being considered and the Soviets are seeking Portuguese permission to use ports in mainland Portugal and Madeira for supporting their Atlantic fishing fleet. The Portuguese have told us that they are considering agreeing to this proposal, but it is not clear whether this would exceed the support routinely provided to the Soviet trawlers in other West European ports.

30. The Soviet Union must look on the Portuguese situation with a mixture of caution and hope. They, like Communists everywhere, have been led by their reading of events in Chile to avoid adventurous bids for power unless they can be sure that the levers of power—the police, [Page 504]the armed forces—are in safe hands. The situation in Portugal today must look promising from this point of view but not yet conclusively favorable to an outright Communist bid for power. Continued close collaboration with the dominant faction of the AFM is thus the indicated policy.

31. The Soviets are also, no doubt, sensitive to the international implications of a Communist or radical left takeover of a NATO Ally. On the one hand the prospect must seem very pleasing to them. On the other they cannot but be conscious of the high stakes for them—however much they may deny any connection with Portuguese affairs—vis-à-vis the U.S. Their policy of consolidating the status quo in Europe, about to be crowned in their view by conclusion of the CSCE, might receive a serious jolt if they seemed to be conniving at, or even benefitting from, the defection of a U.S. Ally from NATO. So their line will be developed with one eye on Portugal itself and the other on the U.S. or U.S.-Europe response.

32. Within Portugal the Communists have so far played a limited but effective role on the fringes of the struggle, attempting to influence the main actors—the military—as much as possible and to maximize the benefit or limit the damage from the ebb and flow of the conflict. Although PCP Secretary General Alvaro Cunhal is the most Stalinist Communist leader in Western Europe, he has maintained a relatively moderate posture since the April 25, 1974 coup. A very cautious man, particularly after his many years in prison and exile, Cunhal is probably uneasy about the speed with which leftist AFM officers are moving to overturn the social and economic order. Moreover, while he is certain to be gratified by the consolidation of leftist power within the AFM, the increasing power of these military officers may also be causing him some concern since it raises the possibility at least that they could view the PCP as expendable.

VII. Courses of Action in the Short Term

33. We recognize that the abortive coup attempt of 11 March has discredited the parties of the center-right and given the left the occasion for limiting the activities of centrist forces. It does not appear to us, however, that the die is cast in final. The actions we take, bilaterally and multilaterally, should be aimed, we believe, at strengthening those essentially moderate centrist forces so as to prevent their knuckling under to the rampant left. If this fails—and we cannot really be certain of this until after the 12 April poll, at the earliest—our objective should, at a minimum, be to limit the damage where possible while reconsidering the entire problem in the light of what type of regime seems to be emerging in Lisbon.

34. The U.S. has diverse levers on Portuguese developments:

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—Diplomatic pressure;

—Further economic assistance to help the Portuguese deal with the growing problems their own policies are likely to create;

—Sanctions aimed to weaken further the Portuguese economy (best applied in concert with the major Western European Allies);

—Mobilizing international opinion against Portugal’s abandonment of the path to democracy;

—Military aid and perhaps an enhanced role in NATO to strengthen the ties of the Portuguese military with the West;

—Curtailing Portugal’s participation in NATO even if Lisbon wishes to maintain it.

35. However, because the abortive coup attempt has led to a serious weakening of moderate forces and a resulting lurch to the political left, its effect has been to further weaken our already limited ability to influence events in Portugal.

—We continue to have access to and some leverage on a constricted circle of conservative and moderate leaders, few if any of whom appear to have any substantial impact on policy.

—We continue to have limited access to, but even more uncertain leverage than before on, the leftist military men (Goncalves, Carvalho, etc,) who are now, more than ever, in control.

36. Nonetheless, we should act now to deal with the present situation and to lay the groundwork for future contingencies. Following are action recommendations:

—(A) That you send Amb. Carlucci the guidance that appears at the end of this message, expressing to Costa Gomes and others our mounting concern with developments and particularly with the prospect of Portuguese elections that exclude major elements of the center. This firmer line, while perhaps risking impairment of U.S. influence with Costa Gomes, is nevertheless required in order to avoid impression that U.S. condones developments or is indifferent to them.

—(B) Authorize Ambassador Bruce to begin high level discussions in NATO with the UK, FRG, and France, and perhaps also with Italy, Luns, and the PermRep Dean de Staercke. Before this, Hartman and I would call in respective Ambassadors and explain plan.

These consultations on Portugal would be aimed at:

—Discussing various alternatives and implications of the Portuguese role in NATO and ways of dealing with contingencies.

—Establishing a more or less common set of views by the major responsible Western powers, and developing ways that these could be conveyed to Portugal to have the greatest influence (using talking points from your message to Costa Gomes).

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—Examining how the major Western powers could coordinate to meet Portugal’s economic crisis, or assert leverage or suasion on Portugal through economic means.

—(C) Encourage European Socialist leaders, including the Swedes, to use their good offices to counsel moderation in Lisbon and warn of the consequences otherwise. We would also want to raise this with Brandt during his visit here March 27.

—(D) That you make clear to Soviets soon, perhaps to Gromyko when you meet him next week that they should refrain from meddling in Portugal. However tempting the opportunities for outside interference in this period of instability, Soviets should be reminded that such interference could raise serious questions about principles on which U.S.-Soviet relations are based.

—(E) Have the NSC initiate an urgent DOD study on the Azores, to include military alternatives.

—(F) Begin immediate consultations with key Congressional leaders to apprise them of the Portuguese situation, to stimulate public statements of concern, and to consider with them alternatives for U.S. policy in light of various contingencies.

—(G) Our public posture should express increasing concern about developments. Exact recommendations being sent Septel.

37. On the assumption that the drift to the left in Portugal is likely to continue whatever we do, Dept is addressing further possible courses of action, as follows:

(1) Economic sanctions (both unilateral steps by the U.S. and measures that might be taken with the Allies);

(2) Terminating Portugal’s active role in NATO;

(3) Examining the implications for the U.S. of a situation in which no other options remain except a radical non-aligned outcome in Portugal or a pro-Soviet outcome, and steps we might take (with and without other countries) to encourage the former if we conclude that we prefer it;

(4) Prospective cooperation with Spain.

Attachment:

Cable to be sent from Secretary to Ambassador Carlucci in Lisbon. Secret/Nodis. For Ambassador from Secretary.

1. I am deeply concerned about the leftist consolidation of power in Portugal, the impression that a radical military dictatorship is being established, reports of Soviet overtures to the Portuguese and the affect of all of these developments upon the character of the NATO Alliance. [Page 507]In view of these events, you should call urgently upon President Costa Gomes and then Prime Minister Goncalves making the following points and solicit their candid reactions:

—(A) We have noted Portugal’s statement that international agreements and treaties will be honored, which of course includes NATO, but we are disturbed by strident, anti-Western, anti-U.S., and anti-NATO tone of statements by various individuals in GOP as well as media. We hope that these statements do not represent a weakening of the GOP’s determination to honor its commitments or a growing tendency on the part of the GOP to engage in dangerous flirtations with the Soviet Union and its Allies which might run counter to NATO commitments.

—(B) In particular, we must take exception to any statement made alleging or insinuating that the United States Government was involved in any way in the abortive coup attempt last week or that the United States Government is intervening in the internal affairs of Portugal.

—(C) On the contrary since the April 25 revolution the U.S. has consistently demonstrated its support for the efforts of the Portuguese revolution to build new institutions of government, based on a free choice of the Portuguese people. In this connection, we note that the GOP intends to proceed with the Constituent Assembly elections planned for April 12. We hope that it is also the GOP’s intention to allow the fullest possible participation in those elections by the previously qualified political parties.

—(D) Our economic assistance program has been a further tangible evidence of our support for the efforts of the people and Government of Portugal to build a stronger economy, as we promised during President Costa Gomes’ visit to Washington last October.

—(E) How Portugal manages its own affairs is its business alone, but impression abroad is that events may be strengthening elements opposed to democratic evolution.

—(F) We note that GOP plans full protection of all foreigners and their property. In this connection, statements such as the one by General Carvalho about Ambassador Carlucci, even though subsequently retracted, only serve to alarm Portugal’s friends and to leave impression, that GOP not doing everything possible to calm situation down.

—(G) I am personally following situation closely and look forward to Costa Gomes’ private assessment of what this means for Portugal in the future.

—(H) FYI: You may draw on these points as appropriate in contacts at all other levels.

Ingersoll
  1. Summary: The Department forwarded an action memorandum on Portugal to Kissinger.

    Source: Ford Library, NSC Institutional Files (H-Files), Box 35, NSSM 221—U.S. Security Interests in the Azores (1). Secret; Immediate; Nodis. Drafted by Lukens, William Kelly in EUR/IB, Edward Streator and Vladimir Lehovich in EUR/RPM, Herbert Hagerty in PM, Ray Caldwell and Robert Baraz in INR, and Anton DePorte in S/P; cleared by Hartman, Vest, Lord, Hyland, Clift, H, S/S, and S; and approved by Sonnenfeldt. On March 11, an attempted right-wing coup was quashed in Portugal. From March 8 to 23, Kissinger was shuttling among a number of countries in the Middle East discussing Egyptian-Israeli disengagement.