THE PRESIDENT'S DAILY BRIEF 9 FEBRUARY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993739
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 9, 1973

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A0-11500010035-1
The President's Daily Brief
9 February 1973
45
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B( 1),12).(3)
declassified only on approval of
the Director or Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
9 February 1973
PRINCIPAL DEVELOPMENTS
The military situation in Laos continues to deteri-
orate, but Prime Minister Souvanna Phouma believes
that agreement on a cease-fire is near. (Page 1)
Vietnam
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New developments in the international monetary sit-
uation are discussed on Page 3.
Egypt and Libya are said to be moving ahead with
their unification plans, but many major hurdles re-
main. (Page 4)
Moscow's relations with the fedayeen are becoming
increasingly strained. (Page 5)
Senior Uruguayan military leaders have thrown down
the gauntlet to President Bordaberry by demanding
that he fire the new defense minister he appointed
on Wednesday. (Page 6)
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LAOS
Nam I
Yu.
ouei Sai
554102 2-73 CIA
?Government controlled
? Communist controlled
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LAOS
Government forces yesterday abandoned Paksong
on the Bolovens Plateau in the face of heavy shell-
ing and strong ground attacks by elements of the
North Vietnamese 9th Regiment. An effort is now
being made to set up new defensive positions along
Route 23 west of the town in hopes of maintaining
at least a token government presence on the Plateau
North of the Bolovens, the government campaign
to recapture Saravane appears near collapse. Sev-
eral of the irregular battalions that had been try-
ing to move on the town now are retreating toward
Khong Sedone. Government units still in the area,
weakened by casualties and desertions, are unlikely
to hold their ground against renewed Communist at-
tacks.
On Thursday the North Vietnamese also occupied
Muong Phalane in the central panhandle. Government
troops still hold hamlets north and south of the
town. Skirmishing continues around Thakhek in the
Mekong Valley, but the arrival of 1,400 irregulars
will enable the government to regain the initiative
in this area.
Little significant fighting has been reported
in the rest of the country. In the far northwest,
field commanders are hurriedly reorganizing their
,forces in anticipation of further enemy attacks.
Irregulars from Nam Yu and nearby positions aban-
doned late last week have joined other government
troops to form a defensive line stretching north
from Ban Houei Sai.
Meanwhile, Prime Minister Souvanna Phouma
continues to meet with the senior Lao Communist
representative, Phoumi Vongvichit, and remains
optimistic that an agreement is near. The chief
remaining obstacle is the Communist refusal to
accede to Souvanna's demand that he be recognized
as the only head of the neutralist faction. In
an apparent effort to pressure the Pathet Lao to
accept his terms, Souvanna yesterday called in the
Soviet, British, and Indian ambassadors and the
three International Control Commission representa-
tives in Vientiane to explain the proposed agree-
ment. He told the British ambassador that a cease-
fire would be signed on 13 February and come into
effect the next day.
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VI ETNAM
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INTERNATIONAL MONETARY DEVELOPMENTS
The dollar fell below its floor yesterday, re-
quiring the Bundesbank to intervene from the open-
ing of the market. Total purchases by the central
bank amounted to about $1.7 billion, bringing total
West German interventions since the crisis began
on 1 February to about $4 billion.
The crisis is becoming a test of wills
between the Bundesbank and international
money speculators. It is also stirring
new waves of anxiety about policy direc-
tions in Washington.
Concern is increasing, for example, over
what new trade concessions the US may de-
mand to help cure its balance-of-payments
deficit. The recent GATT preparatory
meeting for the future multilateral trade
negotiations made it clear that the Euro-
peans are not disposed to go very far in
discussing trade matters until they have
a better idea what negotiating authority
the US administration will seek from Con-
gress.
At the same time, some German financial
commentators have publicly alleged
that the US may be en-
couraging the speculative flows and is
not unhappy with the resulting de facto
devaluation of the dollar. Many Euro-
peans are expressing the wish for a united
response to the crisis, but no consensus
has yet appeared on what measures should
be adopted. Current proposals include a
joint two-tier system in the European
Communities to control capital movements
or possibly even a common floating of
community currencies.
Meanwhile, the Japan foreign exchange market,
which has already closed today--Tokyo time--reacted
strongly to the increased activity on the European
markets yesterday. The yen remained at its inter-
vention point, with the Bank of Japan buying $240
million. This nearly matches the largest purchase
by the central bank during the current crisis.
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EGYPT-LIBYA
plans for
union are proceeding on schedule. Union will be
formally proclaimed on 1 September, and the con-
stitution will be ratified and a unified cabinet
named within a month or so afterwards. Later steps,
such as the election of a congress and the passage
of laws covering all aspects of the unity arrange-
ments, are to stretch out over a much longer period,
probably well into 1974.
Many major hurdles remain before unity
can become a reality. Cairo is not pre-
pared to surrender any significant degree
of authority to the Libyans, and is re-
luctant to involve itself in another abor-
tive merger such as the one with Syria
from 1958 to 1961. The Egyptian leaders'
primary interest remains in ensuring con-
tinued access to Libyan funds.
The Libyans also have misgivings. Presi-
dent Qadhafi fears that mounting pressure
on the Cairo government to break the Mid-
dle East stalemate may undermine President
Sadat's position. The developing rapproche-
ment between Egypt and Jordan causes him
to suspect that frontline states may aban-
don the "battle of destiny" with Israel.
Qadhafi and other members of the Revolu-
tionary Command Council are also trying to
allay widespread anti-union sentiments in
Libya by insisting that the union will
truly be a reciprocal partnership.
Qadhafi has signaled his intention to re-
tain a major voice by suspending cash
transfers to Cairo except those earmarked
for arms purchases. Despite his reserva-
tions, however, he continues to prepare
for union and to press for advancing the
timetable.
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USSR-FEDAYEEN
The strains are growing in Moscow's relations
with the fedayeen. The primary irritant is the con-.
tinuing emigration of Soviet Jews to Israel. De-
partures this year are at about the same rate as
last year,,when some 32,000 Jews left the USSR,
mostly for Israel.
Fedayeen resentment has also been heightened,
however, by a belief that the Soviets had a part
in foiling a Black September terrorist operation
against a,transient center in Vienna used by Soviet
Jews en route to. Israel.
The Soviets have long counseled the feda-
yeen against counterproductive terrorism
and would not hesitate' to thwart a feda-
yeen plot that might embarrass them.
Whether or not Moscow was involved, the
incident illustrates the growing Zack of
trust between the fedayeen and the Soviets.
There are.likely to be more such frictions'
as long, as'large-scale'Jewish emigration
continues.
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FOR THE PRESIDENT ONLY
URUGUAY
The senior army and air force leaders have
thrown down the gauntlet to President Bordaberry by
demanding that he fire the new defense minister he
appointed on Wednesday. They did so after the new
minister--a retired general--took a strong stand
against further military meddling in politics. Bor-
daberry has defied the demand and has appealed for
popular support.
Although top navy leaders continue to sup-
port the president, we doubt that they
would be able to offer more than token re-
sistance should the army and air force
decide to force the ouster of either the
defense minister or the president.
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NOTES
Chile: Because of a shortfall in its wheat
production, Chile is seeking to boost this year's
imports to some 1.3 million tons, 73 percent above
the 1972 total. Santiago has signed contracts with
Argentina, the USSR, Australia, South Africa, Ro-
mania, and Bulgaria for about half its needs, but
has been unable to obtain any more from them. Chil-
ean officials state that the US and Canada are the
only possible sources for the balance of this year's
requirements. The wheat from the USSR amounts to
100,000 tons and is part of the 1 million ton So-
viet-Australian grain deal concluded late last year.
Cyprus: Archbishop Makarios was returned un-
opposed to the presidency for a third time yester-
day as tens of thousands of his supporters held a
peaceful mass demonstration in Nicosia. Followers
of General Grivas made no attempt to disrupt the
rally.
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Top Secret
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