Office of the Historian

78. Memorandum From Secretary of State Haig to President Reagan1

Washington, September 2, 1981

SUBJECT

  • Coming Months in Romania

Reports of popular and Party discontent in Romania continue to reach us as Romania’s economic situation deteriorates. Popular discontent flows from the worst food shortages in 35 years. Party and Government critics hold President Ceausescu responsible for the negative consequences of his 1965 decision to emphasize industrial development at the expense of agriculture.

Ceausescu’s grip on the reins of power nonetheless appears firm. Romanians appear unwilling to confront their government as the Poles have done. They are likely to endure consumer shortages so long as basic needs can be filled through family connections and the black market.

Worse problems could develop this winter, however, if Romania’s food shortages worsen, or if its heavy international financial obligations place greater strain on the economy. Romania’s external debt of $9 billion approaches that of Poland on a per capita basis. Western [Page 245] banks are proving less willing to extend Romania new credits. Romania has used IMF loans to cover short-term debts, and is looking to Western governments for concessional trade credits.

Early this year Ceausescu decided to seek better relations with the United States. Without having asked for the honor, we have become Romania’s principal patron in the West, its biggest political and economic counterbalance to the Soviet Union. If Romania’s financial crisis deepens, it may conceivably look to us to provide Western leadership to help it out of its difficulties, as we are perceived to be doing with the Poles.

Failure to aid Romania in a crisis could cause it to rethink its foreign policy options. It might seek other patrons, as well as move closer to the Soviets. For now, Romania should be able to stumble through its economic problems—it is not on the verge of becoming another Poland.

The clouds on the horizon, however, bear careful watching; should conditions change, we may be called upon to act.

  1. Source: Reagan Library, Executive Secretariat, NSC Country File, Romania (9/4/1981–11/17/1981). Secret.↩