THE PRESIDENT'S DAILY BRIEF 11 JUNE 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007980
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: June 11, 1974

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A012100010037-2
The President's Daily Brief
June 11, 1974
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Exempt from general
declassification schedule of E.O. 11652
exemption category 513(1/A21.13)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
June 11, 1974
PRINCIPAL DEVELOPMENTS
The Italian government's resignation yesterday re-
sulted from the center-left coalition's split over
how to cope with the country's soaring trade deficit?
and record-breaking inflation. (Page 1)
Jordan
(Page 2)
President Giscard d'Estaing's cancellation yester-
day of one of the scheduled -atmospheric nuclear
tests will take some sting out of charges that the
military had forced him to acquiesce in the testing.
(Page 3)
In Thailand, student radicals joined a major demon-
stration by textile workers over the weekend and
are encouraging the workers to strike. (Page 4)
Notes on USSR-Syria, China, and Afghanistan-USSR
appear on Page 5.
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ITALY
The resignation of Prime Minister Rumor's center-
left coalition government was prompted by a fundamen-
tal dispute over how to cope with the critical state
of? the Italian economy. The coalition partners dis-
agreed on haw to combat the enormous trade deficit
and the record-breaking inflation. Rumor's Christian
Democratic Party insisted on monetary restraints and
across-the-board tax increases to curtail domestic
demand. His Socialist partners favored easing credit
and making tax hikes selective to shield low-income
groups.
President Leone has asked Rumor to head a care-
taker government during negotiations on forming_ a
new government. If these negotiations become unduly
contentious or prolonged, they will add weight to
the argument of the Communist Party, Italy's second
largest, that the country cannot be governed effec-
tively without its participation.
The severity of the economic problem favors a
quick solution. Mounting neo-fascist violence in
recent months is also a matter of concern. To prevent
nourishing a climate of rightist-inspired violence,
the left-of-center parties might agree to accept some
austerity measures now, in return for Christian Demo-
cratic promises of support for their programs once
the economy improves.
Italy's trade deficit for April again topped
$1 billion, pushing the January-April deficit to
over $4 billion. About half this deficit results
from petroleum imports, but some comes from the grow--
ing demand. for quality food products- Italy has been
unable to obtain adequate foreign loans to cover its
deficit, and the head of the central bank claims that
Italy's credit has been exhausted. The government
has resisted devaluation because its short-term ef?
fect would be to aggravate inflation already running
at an annual rate of 25 percent.
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?
JORDAN
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FRANCE
President Giscard d'Estaing's cancellation yes-
terday of one of the atmospheric nuclear. tests France
had planned this summer will take some of the sting
out of charges that the military had virtually forced
him to acquiesce in the testing? Giscard's explana-
tion that the test was canceled for financial reasons
is unconvincing; considerably more money goes into
nuclear research and development than into testing,
and the savings would be relatively small.
Giscard's move suggests that the French have de-
cided not to go through with plans to set off a device
with a yield of several hundred kilotons. Such an ex-.
plosionwould produce. greater fallout and provoke
strong criticism at hoMe and abroad.
FOR THE PRESIDENT ONLY
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THAILAND
Student radicals joined a major demonstration
.by textile Workers over the weekend and are encour-
aging the workers to strike, Radical student and
labor leaders are using the protests-as an opening
for antigovernment and anti-US speeches.
Prime Minister Sanya
may be able to persuade those moderates who still
have influence among Bangkok's generally conserva-
tive student population to stay away from the air
base issue. If Sanya fails, Krit is likely to
press him to clamp down on the radicals
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NOTES
USSR-Syria: The Soviets have convinced lead- -
erS of the Syrian Communist .Party to give more ac-
tive backing to the policies-of President Asad and,
:in particular, to the Syrian-Israeli disengagement
agreement. The party's newspaper yesterday Warmly
endorsed the agreement. Although the Communists
play no major role in Syrian politics, Asad pre-
sumably will welcome their cooperation as another
-sign of Moscow's support for his regime.
China: Peking domestic news broadcasts and
People's Dailyover the weekend included reports
of President Nixon's-trip to the Middle East and
Secretary Kissinger's recent speech in New York to
organizations interested in promoting further con-
tacts with the PRC. The report on the Secretary's
speech stressed his comments concerning US inten-
tions.to continue the process of normalizing rela-
tions.. The decision to carry the Secretary's re-
marks was a rare occasion and will be interpreted
throughout China as a clear mark of approval from
the highest levels both of US policy toward the PRC
and of Peking's opening to Washington.
Afghanistan-USSR: President Daoud on June 8
returned from a five-day official visit to the USSR
during which he held talks with Brezhnev, Kosygin,
Podgorny, and.Gromyko. The Soviets managed to get
Daoud to endorse their proposed Asian collective
security system. No previous Afghan government
had endorsed this proposal, which has attracted
little attention elsewhere in Asia. The joint
statement concluding the visit suggests Moscow
gave Daoud little encouragement in his territorial
dispute with Pakistan.
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Top Secret
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