THE PRESIDENT'S DAILY BRIEF 30 JUNE 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993863
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: June 30, 1973

Declassified in 'Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011600010077-4
The President's Daily Brief
30 June 1973
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Exempt from general
declassification scheduk of E.O. 11652
exemption category 5Et(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
30 June 1973
PRINCIPAL DEVELOPMENTS
The Nixon-Brezhnev meeting has stirred some concern
in Western Europe over implications of closer US-
Soviet relations and especially the agreement on
prevention of nuclear war. (Page 1) Brezhnev's
visit to Paris failed to allay French suspicions of
superpower diplomacy. (Page 2)
Major European currencies remained strong against
the dollar following the revaluation of the mark
yesterday morning. (Page 3)
The quick collapse of yesterday's rebellion in
Chile has strengthened Allende's hand: (Page 4)
On Page 5
Soviet-Egypt
The Viet Cong's PRG reportedly does not now intend
to establish a capital in South Vietnam. (Page 6)
China
(Page 7)
Notes on Cambodia and Mexico appear on Page 8.
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FOR THE PRESIDENT ONLY
WESTERN EUROPE
Reaction to the US-USSR summit has focused
on the consequences for the Western alli-
ance of the trend toward closer US-Soviet
relations and of the provisions of the
agreement on prevention of nuclear war.
The summit seems likely to increase con-
cern about the role Europe can play between
the superpowers.
Britain's reaction has been by far the most
positive. Foreign Secretary Home "welcomed with
satisfaction" the summit outcome and judged that
the interests of the alliance had been fully pro-
tected, but cautioned that the CSCE would be the
test of Soviet willingness to turn phrases into
practice.
The French read the meeting as re-emphasizing
superpower dominance in international affairs; they
have officially stated that Paris is outside "bloc
politics" and will not be bound by decisions of the
US and USSR. One official said privately that the
agreement on prevention of nuclear war has diminished
the credibility of the US nuclear deterrent and
shown that the US would prefer a protracted conven-
tional engagement in Europe to an early use of nu-
clear weapons.
West German officials are worried that the nu-
clear agreement might be construed as a blanket "no
first use" pledge that would limit the US response
to a conventional Soviet attack on Western Europe.
Bonn's ambassador to NATO to
raise these concerns; West Germany is urging a
prompt and unambiguous reaffirmation of the US com-
mitment to a nuclear defense of Europe. In addition,
the Germans are as worried as the
French about the trend toward increased US-Soviet
bilateralism.
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FRANCE-USSR
Despite public statements of satisfaction with
the results of Brezhnev's stopover in Paris, the
French are privately disturbed. Brezhnev evidently
attempted to dispel French suspicions of a US-Soviet
"Holy Alliance" potentially inimical to the interests
of the lesser powers. According to an official
French spokesman, Brezhnev assured Pompidou that
"there ?was no discussion of third countries, nor of
France," during his talks in Washington; the French
apparently made no attempt to conceal their skep-
ticism at this.
French satisfaction over the visit was appar-
ently balanced by a realization of the degree to
which it was overshadowed by the US-USSR summit.
The Pompidou-Brezhnev talks focused on security
questions affected by SALT, MBFR, and US-Soviet bi-
lateral arrangements. Pompidou
was even more forceful than during his January trip
to the USSR about his intention to stay out of MBFR,
and that Brezhnev did not press him. Paris also
considers it premature to talk about concluding the
European security conference at the summit, even if
Pompidou were offered the chairmanship.
Despite these differences, Pompidou accepted
an invitation to visit the Soviet Union again early
next year, and progress was made on several large-
scale economic deals.
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Exchange Rate Changes Relative to the Dollar Since
the European Joint Float was
Introduced on
19 March
(Figures
7 May*
in Percent)
1 June 28 June
29 June
Mark
-0.9
+5.6
+14.3
+16.2
Guilder
-2.1
+3.9
+10.3
+10.2
French franc
-0.4
+5.0
+9.9
+9.7
Sterling
+1.3
+4.6
+5.0
+5.0
Swiss franc
0
+5.8
+7.8
+11.3
Yen
-0.3
+0.1
+0.2
+0.2
*Dollar at strongest levels in recent months
? v.,
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FOR THE PRESIDENT ONLY
INTERNATIONAL MONETARY DEVELOPMENTS
The major European currencies remained strong
against the dollar following the revaluation of the
mark yesterday morning. The mark now has appreci-
ated against the dollar by 17 percent since early
May, when the dollar was showing some strength, and
by about 50 percent since early 1971.
West German officials decided to revalue after
the Bundesbank had to buy about $900 million worth
of European currencies Thursday, for a total of
$1.6 billion in the last two weeks or so. These
inflows, which came mainly from Europe, were threat-
ening Bonn's new anti-inflation program.
The revaluation will keep the joint fZoat
intact for at least a while longer. It
already has brought the mark from the top
to the bottom of the European band and
relieved pressures on the band created
by the mark's rapid climb. The revalua-
tion, however, represents another wind-
fall for money managers and speculators
who bet on a mark revaluation. It may
encourage them to try their hand agaiil,
thereby keeping the international cur-
rency markets unsettled. The mark may
even remain the traders' favorite; it is
little more than three months since it
was last revalued.
Tokyo may now face the prospect of Euro-
pean pressure to have the yen appreciate
further. Otherwise, Japanese products
are likely eventually to enter European
markets in even greater quantities. The
Bank of Japan has been able to manage the
yen-dollar rate through its rigorous sys-
tem of controls. Since March, the Bank
reportedly has sold $3 billion to keep
the yen near its present rate.
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FOR THE PRESIDENT ONLY
CHILE
President Allende stands to profit from the ill--
conceived military rebellion that collapsed within
three hours yesterday. The events may provide just
the boost he needs to overcome his current political
crisis and resume building a socialist Chile at his
own pace.
The Santiago-based Second Armored Battalion rebelled
in the hope that the rest of the military and the
police would join. Instead, the bulk of the army
and the carabineros came to the government's defense.
When loyal troops arrived at the presidential palace,
the rebels surrendered.
Allende may now be able to purge known enemies from
the armed forces and thus frustrate the more serious
coup-plotting that has been under way. Army com-
mander Prats and other armed forces leaders will
emerge with an enhanced public image as defenders
of constitutional order. On the other hand, the
pre-emption of a possibly better organized military
move may reduce their chances of obtaining major
concessions for returning to the cabinet and allow
Allende to bring them back in largely on his own
terms.
Yesterday's events may also strengthen Allende's
hand in dealing with his increasingly obstreperous
Communist and Socialist supporters. He can now
claim to have survived an attempted military coup
without having to call on their street brigades.
The quick suppression of the revolt certainly will
dishearten much of the civilian opposition. Those
elements who have been trying to provoke military
intervention by fostering violence, strikes, and
other economic disruption will now have to re-examine
their strategy.
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FOR THE PRESIDENT ONLY
EGYPT USSR
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FOR THE PRESIDENT ONLY
VIETNAM
The Viet Cong's Provisional Revolutionary
Government does not intend to establish a capital
in South Vietnam, according to Le Chan, North
Vietnam's information chief in Paris. The PRG's
goal, he says, is not to divide the South into two
separate political "groups," but rather to have
one "government of national concord" with a single
capital.
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Chan rejects the view that the PRG wants to
avoid setting up a capital for fear the South Viet-
namese or the US would bomb it. He says US air
intervention is now unlikely and that the South
Vietnamese will be discouraged by Communist anti-
aircraft installations.
Recurrent reports that the PRG was on
the verge of establishing a capital in
the South reached a peak just before
the fourth anniversary of the founding
of the PRG on June 6. On that date,
however, Liberation Radio announced only
that several Communist and third-world
countries had sent ambassadors to an
undisclosed location in northern South
Vietnam to present their credentials to
the PRG.
If the Vietnamese Communists ever did
intend to set up a PRG capital, there
are several possible explanations for
their failure to follow through:
--They may simply have decided that they
occupied no site worthy of the designa-
tion.
--Hanoi may have passed the word that
establishment of.such a capital was
not. consistent with its contention
that Vietnam is one country.
,--The Communists may have backed off as
a result of the Kissinger-Tho talks.
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FOR THE PRESIDENT ONLY
CHINA
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MILES 25
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FOR THE PRESIDENT ONLY
NOTES
Cambodia: The Communists have gained control
of a ten-mile stretch of Route 6. Communist forces
have also returned to the offensive on Route 5, and
Phnom Penh is again cut off from the rice stocks in
the northwest. Government reinforcements yesterday
began moving to reopen Route 5 and to blunt the in-
surgent drive on Route 6. South of Phnom Penhi-gov-
ernment troops have made little progress in clearing
Routes 3 and 20l. Elements Of two Khmer Communist
regiments have been ordered to attack along the east
bank of the Bassac River in this sector. These
units, however, took substantial casualties in the
fighting along the Mekong late last month and may
not be up to a major effort. Meanwhile, another
truck convoy arrived in Phnom Penh yesterday over
Route 4, but Communist units are edging closer to
the highway town of Kompong Speu, and this road
could be closed at any time.
Mexico: Contrary to recent reports, Mexico is
not applying for observer status in the Council for
Mutual Economic Assistance. According to a Mexican
Embassy official in Moscow, Mexico wants to expand
trade relations with CEMA countries, but it is not
seeking any formal ties with CEMA itself. He as-
serted that such .a move would arouse strong domestic
political opposition.
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