THE PRESIDENT'S DAILY BRIEF 31 JULY 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007779
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: July 31, 1974

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The President's Daily Brief
July 31, 1974
5
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Exempt from general
declassification schedule of EO. 11652
exemption category 5B( I),(2).(31
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
July 31, 1974
PRINCIPAL DEVELOPMENTS
The first phase of the Geneva peace talks came to a
successful conclusion yesterday when an agreement
was signed by Britain, Greece, and Turkey formalizing
the cease-fire on Cyprus. A longer term settlement
is clouded by the prospect that Archbishop Makarios
might return to the island. (Page 1)
The US embassy in Athens believes the new cabinet
named by Prime Minister Karamanlis has vindicated
the old Greek political establishment by honoring
those who resisted the military regimes. (Page 3)
Bonn has responded to East Germany's first interfer-
ence with travel to West Berlin by a member of the
Federal Environmental Office by requesting a meeting
of the Inter-German Transit Commission. This is the
lowest-level political protest that Bonn can make.
(Page 4)
Italy
(Page 5)
Iron ore producing countries plan to meet in late Oc-
tober to establish an exporters' association. They
want to discuss a minimum increase of 150 percent.
in the price of their iron ore. (Page 6)
Zaire
North Korea
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Notes on Saudi Arabia - Abu Dhabi, Saudi Arabia, and
Chile appear on Page 8. 25X1
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BULGARIA
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556298 7-74
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ILLEGIB
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FOR THE PRESIDENT ONLY
GREECE-CYPRUS-TURKEY
The first phase of the Geneva peace talks came
to a successful conclusion yesterday when the for-
eign ministers of Britain, Greece, and Turkey signed
an agreement formalizing the cease-fire on Cyprus.
Major negotiating difficulties lie ahead when the
ministers meet again on August 8 to discuss the
political future of the island. Representatives
of the Greek and Turkish Cypriot communities will
participate in the next round of talks.
The agreement indicates that Athens acceded
to Turkey's major demands. Turkish refusal to ac-
cept the word "withdrawal" was resolved by a state-
ment calling for "measures that will lead to the
timely and phased reduction of the number of armed
forces and materiel on Cyprus." The agreement.also
recognizes the existence in practice of two auton-
omous administrations on Cyprus, although it was
noted that this recognition would not "prejudice
the conclusions to be drawn from this situation."
The ministers agreed to discuss this matter at the
next-stage of the talks, as well as the "constitu-
tional legitimacy" of the Turkish Cypriot vice pres-
ident of Cyprus. The agreement also notes that all
Turkish enclaves occupied by Greek Cypriot forces
should be evacuated immediately.
A longer term settlement for Cyprus is clouded
by the prospect that Archbishop Makarios might re-
turn to the island. In London yesterday, Makarios
insisted that he was the elected president of Cy-
prus and that "nothing" could prevent him from re-
turning to the island. He added that his main con-
cern was for the future of Cyprus and that the
timing of his return would depend on developments.
A former cabinet minister under Maka-
rios also predicted civil war if the archbishop
returns. He told a US embassy official that Pres-
ident Glafkos Clerides was generally acceptable to
all political groupings.
(continued)
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FOR THE PRESIDENT ONLY
In a press conference of July 28, the gen-
eral secretary of the powerful Cypriot Communist
Party made a statement that appeared to endorse
Clerides' candidacy. The party had previously been
a staunch supporter of Makarios.
Scattered incidents of fighting were reported
again yesterday on Cyprus. President Clerides com-
plained to the US embassy about reported Turkish
movements near Sisklipos, northwest of Nicosia.
Turkish military sources told US embassy officials
that there were still pockets of Greek resistance
in this area, including one artillery piece that
has been shelling Turkish forces on the beaches.
The Greek National Guard said that Turkish
infantry and tanks attacked Guard units in another
incident apparently to the west of Nicosia. A
regiment of Turkish troops supported by armor and
artillery reportedly also marched east of Nicosia
to strike positions along a Greek-held section of
a road to the capital.
tnat tne airport at Soudha Bay has been closed.
A US aircraft also was not permitted to approach
within five miles of either Elevsis or Tanagra
air base on the Greek mainland.
that the two incidents were related,
and that the Greeks are attempting to hide a pos-
sible resupply attempt for Greek forces on Cyprus.
There is no other evidence that a military resup-
ply is under way, although press reports indicate
the Turks are concerned about supplies and rein-
forcements reachihg Cyprus from either Crete or
Rhodes.
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FOR THE PRESIDENT ONLY
GREECE
The US embassy in Athens, in evaluating the new
cabinet named by Prime Minister Karamanlis last week,
believes Karamanlis has vindicated the old Greek po-
litical establishment by honoring those who resisted
the military regimes.
Karamanlis made no concession to the far left
in his appointments, nor to popular heroes, but has
nominated a solid profile of those who stood in firm,
consistent, and rational opposition to the junta.
At the same time, however, Karamanlis denied positions
of influence to those most inclined to seek revenge
against the military.
The embassy cannot judge yet whether the cabinet
as a whole will have much responsibility or power.
While some ministries were assigned to men perhaps
better suited to other offices, key posts--interior,
defense, foreign affairs, and public order--are in
the hands of patriots and proven leaders. Overall,
the cabinet's makeup nevertheless suggests that fam-
ily ties and respectable connections were still help-
ful in obtaining appointments.
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FOR THE PRESIDENT ONLY
GERMANY
Bonn has responded to East Germany's first in-
terference-with travel by a member of the Federal
Environmental Office by requesting a special meet-
ing of the Inter-German Transit Commission tomorrow.
This is the lowest-level political protest that
Bonn can make and follows East Germany's refusal
on July 29 to let a member of the environmental
office travel to West Berlin on the autobahn.
The commission is the institutional mechanism for
dealing with any problems arising out of the transit
agreement of December 1971 between East and West
Germany.
As a follow-on, Bonn's permanent representa-
tive in East Berlin is prepared to demand consulta-
tions with the East German Foreign Ministry if
Pankow refuses to attend the talks or if the com-
mission fails to resolve the problem. The West
Germans are also urging the three Western Allies
to issue a formal demarche to Moscow demanding
that East Germany desist from interference that
contravenes the Quadripartite Agreement on Berlin.
4
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FOR THE PRESIDENT ONLY
ITALY
The possibility of significant support develop-
ing for a move against the government seems less
likely now than it did last spring. Italy's polit-
ical and economic scene remains unsettled, but it
is now less tense. The governing coalition has sur-
vived a divisive debate over economic policy, due
largely to the forceful intervention of President
Leone, and the government has ?initiated a stiff
austerity program to help alleviate Italy's economic
crisis. Finally, conservative fears of a shift to
the left in the near future should have been allayed
somewhat by a recent Christian Democratic policy
statement that reaffirmed the party's policy opposing
collaboration with the Communists.
5
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FOR THE PRESIDENT ONLY
IRON ORE PRODUCERS
Venezuela, Brazil, Liberia, Peru, Chile, India,
Algeria, and Gabon--called the Caracas group after
the site of their first organizational meeting in
October 1968--will hold a ministerial conference in
Geneva in late October in an attempt to establish
an iron ore exporters' association. They want to
discuss a minimum increase of 150 percent in the
price of their iron ore.
Iron ore imports provide 30 percent of US iron
ore supplies. The Caracas group provides slightly
less than half of these US imports. Iron ore ac-
counts for 7 percent of the average cost of produc-
ing steel in the US.
The ability of the Caracas group to influence
prices will depend largely on whether these coun-
tries can get the cooperation of Canada, which pro-
vides the other half of US imports. Canada has
been taking a more positive attitude toward inter-
national producer organizations than it had in the
past. It does not appear likely, however, that
Ottawa will join in the high price increase that
the Caracas group has in mind. Canada's wider in-
terests in trade with other developed countries
argue for policies of moderation in questions of
pricing and access to mineral resources.
If,
cided to
price of
rise and
tamed.
grade US
despite such considerations, Canada de-
support a substantial increase in the
iron ore, the cost of US imports would
higher international prices could be sus-
This would encourage development of low-
deposits and new foreign sources.
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ZAIRE - NORTH KOREA
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Saudi Arabia-United Arab Emirates Border Agreement
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556296 7-74
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NOTES
Saudi Arabia - Abu Dhabi: Saudi Arabia and
Abu Dhabi have settled a long-standing border dis-
pute that has stood in the way of fuller security
cooperation between the Saudis and their neighbors
along the Persian Gulf. A preliminary agreement,
signed on July 29, gives the Saudis a corridor to
the gulf and control over part of the Zarrara oil
fields on the border. The Saudis, in return, re-
nounced their claims to the Buraimi oasis and are
likely soon to extend diplomatic recognition to
the United Arab Emirates. The final agreement is
to be signed when Sheikh Zayid, the ruler of Abu
Dhabi and president of the United Arab Emirates,
makes a visit to Saudi Arabia, presumably within
the next few months.
Saudi Arabia: A hitch may have developed in .
Saudi Arabia's plan to auction a portion of its
oil production at whatever price the market will
bear--a price presumably below current levels.
Saudi oil minister Yamani has told the US ambassa-
dor that Prince Fahd, chairman of the country's
Supreme Petroleum Council, is opposed to the auc-
tion and would rather sell directly to individual
companies, despite the fact that all the other
members of the council, reportedly approved the
plan for a sealed-bid sale. In the end, King
Faysal, currently on an extended visit to Egypt,
will make his own decision on whether to go ahead
with the auction, but Fahd's opposition could be
a significant factor.
Chile: The four death sentences handed down
by an air force court-martial yesterday are likely
to be commuted. The junta, which will have the
final word on the death sentences, has been in-
creasingly sensitive to the harmful effects that
executions have had on Chile's international image.
All death sentences handed down by military courts
so far this year have been commuted. Other sen-
tences imposed yesterday, ranging from 300 days
to life in prison, may also be reduced on appeal
to higher military authorities.
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Top Secret
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