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General Staff has been trying to negotiate for the despatch of a mission of this kind for some time; the Hungarians have refused as they realise that the arrival of such a mission would probably mean the loss of the last vestiges of independence that they still possess.

Roumania.

21. Further reports have been received indicating that German reinforce- ment continues, especially in the Arad-Temesvar area. According to a report of the 5th January, it is the German intention to concentrate twelve divisions, including motorised divisions, between the Roumanian frontier and the line Oradea-Alba Julia-Turna Severin. There are further reliable indications that the total number of troops to be concentrated on the Bulgarian and Yugoslav a comic of borders may eventually amount to 20 divisions.

22. Thus the threat to Yugoslavia and/or Bulgaria continues, and an attack on the latter might be undertaken as a preliminary operation. At the same time weather conditions in the Balkans make large-scale winter operations very difficult, and the present rate of preparation for such operations suggests that the final stage of readiness will not be reached before the end of February. It must be emphasised that Germany may consider herself forced by circumstances to act before, in which case she may launch her attack in time to complete her campaign before the snow starts to melt in the latter half of February.

23.

Yugoslavia.

The winter strength of the Yugoslav army is now confirmed at about 500,000. Regular formations on the German, Hungarian, Roumanian and Bulgarian frontiers are to remain reinforced. Reserve divisions have all been demobilised.

Bulgaria.

24. Information tends to show that the problem of railway goods-wagons is particularly acute in Bulgaria, and that about 50 per cent. of the wagons require repair.

25. Heavy rain has fallen in Sofia, and the thaw extends to 4,000 feet. Press reports of floods in the S.E. are unconfirmed, but main roads would in any case soon become impracticable if used continuously by mechanical traffic. Early in the week the Danube was reported to be frozen.

Africa.

Libya.

26. Bardia has been captured by the British forces, the number of prisoners taken being estimated at 32,000, including 1,200 wounded. British and Australian wounded are under 600. As soon as they could be released from the operations around Bardia our armoured troops advanced towards Tobruk and forward elements are now west of that town. No detailed information is yet available regarding captured equipment. It is reported that three prominent Blackshirt Commanders made good their escape from Bardia by air or sea, probably during the night the 4th/5th January, deserting their troops and leaving regular Commanders to fight on.

27. Serious deterioration of morale, which has never been high, appears to have contributed to the Italian defeat.

28. It is not yet known whether any reinforcements are being sent to Libya to replace the considerable wastage in man power suffered by Marshal Graziani. Without these it is difficult to see where the Italians can hope to make a stand, as the utilisation of their remaining resources in Libya would deplete the garrison of Tripolitania.

Sudan.

29. Our artillery and patrol activity continues.

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