THE PRESIDENT'S DAILY BRIEF 27 MAY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014808
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 27, 1975

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The President's Daily Brief
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May 27, 1975
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Exempt from general
declassification schedule of E.O. 11652
exemption category. 513(1),(2),(3)
declassified onti on approval of
the Director of Central Intelligence
tf
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FOR THE PRESIDENT ONLY
?
May. 27, 1975
? Table: of ConteAta:
Laos: Harassment of Americans is becoming more
common and widespread. (Page 1)
Portugal: The Armed Forces Movement plans to by-
pass party leaders and establish its own "al-
liance with the people." (Page 4)
IEA-OECD: Ministerial meetings of the International
Energy Agency and the Organization for Economic
Cooperation and Development this week will be
characterized by new unity. (Page 5)
At Annex we discuss the numerous political and
economic problems facing NATO.
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LAOS
Harassment of Americans, clearly
condoned and inspired by the communist-
dominated coalition government, is be-
coming more common and widespread. Lao
employees of the US mission and of Ameri-
can individuals are under strong pres-
sure to quit their jobs or face repri-
sals. No Americans have been harmed
thus far, but in the current climate,
the possibility of incidents involving
violence to US personnel remains high.
The Trans Air Protective Service--a civilian
company which supplied security guards for US
mission property and personnel--was taken over by
communist troops on May 23, leaving the American
community in Vientiane without protection. With
assistance and direction from communist agitators,
some 200 Lao security personnel and disgruntled
employees of AID demonstrated Saturday in front of
the US embassy over salary grievances. The protest
was defused when the American management of the
company agreed to meet the security guards' unreal-
istic demands for severance pay.
Although the most immediate result of the
withdrawal of security protection for Americans is
the danger posed by local housebreakers, whose
activities are definitely on the upswing, communist-
controlled Lao National Radio announced over the
weekend that communist troops will conduct an
"inspection" of all American homes and installa-
tions on May 27. The broadcasts also threatened
that Americans who do not leave Laos "immediately"
may be "punished."
Negotiations between US officials, coalition
government representatives, and communist-inspired
students and other demonstrators continued over the
weekend in an effort to bring a halt to the week-
long occupation of AID facilities in and around
Vientiane. An agreement in principle was reached
with Lao Prime Minister Souvanna Phouma, his
communist deputy Phoumi Vongvichit, and communist
Economics Minister Soth Phetrasy, that:
--the AID organization in Laos will be dis-
solved;
(continued)
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--all American employees of AID will be with-
drawn as soon as possible;
--AID equipment and facilities will be turned
over to the Lao government, in accordance with
the provisions of past agreements, by no later
than the end of the current fiscal year.
US officials also agreed to pay the back
salaries of all Lao AID employees as soon as the
demonstrators permit access to the payrolls at the
AID compound. As part of the agreement, the pro-
testers are to disperse from the compound and the
two US marine guards and one American civilian em-
ployee inside the compound's headquarters buildings
are to be released.
The agreement, however, has not yet been ac-
cepted by the demonstrators. An estimated 30 pro-
testers and some 15 Lao communist troops still oc-
cupy the main AID and defense attache compound in
Vientiane. Communist members of the capital's
joint military security force still occupy several
other AID facilities near the city and guard the
entrance to a large American residential housing
complex in the capital's northern suburbs.
Americans may leave the housing complex, but
harassment there and at Vientiane's airport con-
tinues. Personal effects are subject to repeated
"security" checks; private vehicles are being
searched, and those vehicles without diplomatic or
official plates are being impounded.
Nevertheless, nearly 600 American dependents
and other nonessential personnel were evacuated
by air to Thailand over the weekend. Approximately
280 US officials still remain in Vientiane.
The communists are consolidating their control
of the coalition government. At last week's
cabinet meeting, they abolished the national docu-
mentation center--Prime Minister Souvanna's personal
intelligence service--and the so-called "Vientiane
side coordinating committee"--the non-communists'
primary political action organization.
(continued)
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In addition, the communists have reportedly
succeeded in removing nearly 90 percent of all
senior and middle-echelon, Western-trained, non-
communist bureaucrats from key positions in the
ministries. Communist-inspired demonstrators in
Vientiane yesterday demanded the ouster of the non-
communist directors general of agriculture and
public works. A similar purge of officers from the
non-communist Royal Lao Army has been under way
for several weeks.
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PORTUGAL
The 240-man armed forces general
assembly declared early this morning that
the Movement would bypass political party
leaders and establish its own alliance
with organizations of the people. The
communique issued after a divisive,
15-hour emergency meeting emphasized that
political parties would not be abolished,
a move that had been widely predicted by
the Lisbon press.
The announcement did not give details about the
"alliance with the people," but earlier reports have
mentioned Cuban-style armed civilian militia and
revolutionary defense committees linked directly to
the military.
The Armed Forces Movement called on its Revolu-
tionary Council to solve "firmly and rapidly" the
conflict between the Socialist and Communist parties
and made clear its unhappiness with the Socialists'
boycott of the coalition cabinet. The criticism of
the Socialists may strengthen the Communists' hand
in the current dispute between the two parties.
The general assembly took the unusual step of
reporting a unanimous vote of confidence in Prime
Minister Goncalves. The demonstration of support
for Goncalves will buttress his position as head of
the radical faction of the Armed Forces Movement,
the dominant faction since the abortive coup of
March 11. There had been rumors that the assembly
would attempt to oust moderate leaders from the
Movement, but apparently no such action was taken.
While the general assembly met, 2,000 left-wing
demonstrators in Lisbon protested against the CIA
and NATO and, specifically, the opening of a NATO
naval exercise off the Portuguese coast later this
week. The Portuguese Communist Party also announced
its intention to organize a mass demonstration of
support for the Armed Forces Movement tomorrow.
EC foreign ministers, who met in Dublin yester-
day, resolved to launch a major attempt to head off
dangers of an economic breakdown in Portugal, pro-
vided Portugal stays democratic. Irish Foreign
Minister Garret Fitzgerald will visit Lisbon on
June 1 and 2 for political and economic talks with
Portuguese leaders.
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IEA -OECD
A new unity will characterize the
ministerial meetings of the International
Energy Agency beginning today and of the
Organization for Economic Cooperation and
Development tomorrow and Thursday.
Although the importing nations continue to be
interested in resuming talks with the oil exporters,
most have shifted their priorities to the larger
issues of trade in all raw materials and relations
with the Third World. The IEA nevertheless is
still not prepared to accept the demands of develop-
ing countries that talks on energy be formally tied
to talks about all raw materials. Most IEA members
simply feel that raw materials is the key question
and that energy talks can wait.
The oil crisis, meanwhile, has sharpened the
recognition of the OECD members--particularly the
Europeans and Japanese--of their dependency on raw
materials. The industrialized states have been
looking for ways to assure themselves of long-range
supplies and of steady prices. They are confronted
by the rising expectations of developing states that
export raw materials and look to the OPEC cartel as
a model for their own behavior.
Some of the OECD members, in particular the EC
Nine, have shown an increased willingness to give
in to the developing states on rhetorical issues,
such as canonizing the "Declaration for a New Inter-
national Economic Order" and the "Charter of Eco-
nomic Rights and Duties of States." This shift left
the US isolated in its opposition to the final dec-
laration of the UN Industrial Development Organiza-
tion's conference in Lima last March.
The OECD members nevertheless are not prepared
to accommodate all the economic demands of the de-
veloping states. At the Paris energy talks, for
example, where concrete rather than rhetorical con-
cessions were sought by the developing states, the
industrialized countries did not break ranks with
the US.
(continued)
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The EC has been working on a new raw materials
policy, which was considered by the EC ministers in
Dublin yesterday. Community planning is still far
from complete, but yesterday's session will have a
strong influence on the OECD meeting.
The EC Commission recommended to the Council
that the community move on three fronts to satisfy
some of the developing countries' demands:
--Encourage further processing of raw materials
in developing countries.
--Examine the possibility of commodity agree-
ments on a case-by-case basis.
--Expand on a worldwide basis agreements to
stabilize earnings of developing states from
their exports of raw materials. The EC cur-
rently has such an agreement with 46 develop-
ing states in Africa, the Caribbean, and the
Pacific, under the Lome convention.
Policy reviews are under way in European capi-
tals. This means that the EC states will be no
closer at this week's meetings to agreement on a
final policy than are the other OECD states. Never-
theless, most Europeans believe as do the Japanese,
that the OECD's policy must reflect a willingness
to negotiate on basic issues with the developing
states.
The OECD ministers will thus probably try to
thrash out a rough outline of a common policy and
leave the details to be worked out this summer.
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NATO
For the West Europeans, several of
whom had reservations about a NATO summit,
the most important aspect of the meeting
will be that your attendance will reaffirm
the US commitment to the Alliance and to
Europe. The summit will afford allied
leaders the opportunity to discuss the
numerous political and economic problems
facing NATO--problems that, if left un-
resolved, could threaten the Alliance's
cohesion.
The suggestion that the regular spring NATO
ministerial meeting be made into a summit initially
received a lukewarm reception from several of the
allies. They had doubts that a summit, which might
only emphasize NATO's problems, would be beneficial;
only the British, West Germans, and Belgians en-
dorsed the idea. The French continue to be the most
skeptical. They see no value in the summit and
have chosen to send their foreign minister rather
than President Giscard or Prime Minister Chirac to
the meeting. As you know, however, Giscard has
agreed to attend the dinner to be hosted by Belgian
King Baudouin on May 29.
The controversy that developed over the commu-
nique for the meeting suggests that some of the
Europeans may still be inclined to avoid sensitive
issues so as not to acknowledge Alliance weaknesses.
The frankness with which the allies can be brought
to discuss NATO's many problems will be the mark
of the summit's success; it is the necessary prelude
to finding solutions.
Problems on the Southern Flank
Greece has done very little to implement its
decision of last August to withdraw from NATO's in-
tegrated military command, but Athens' relationship
with NATO as a whole remains unresolved. It appears
moreover, that the Karamanlis government hopes to
maintain this state of uncertainty for some time.
Greek military leaders hope to be able to cooperate
with NATO on many matters. At the same time, it is
evident that the government hopes to be able to
pick and choose among NATO obligations and derive
the maximum military and political benefit from its
association, at the least possible cost.
(continued)
Al
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The other NATO members have opted to deal
cautiously with Athens in the hope of wooing the
Greeks back into the fold. It will be difficult
for several Alliance members to accept the Greek
thesis that Athens should be permitted to partici-
pate only in those activities it desires.
Turkey, the NATO member most directly affected
by Greece's actions, would have major reservations
about approving selective Greek participation.
Other allies will be concerned that the Greek exam-
ple might be cited by still other NATO states to
justify attempts at disassociation.
Meanwhile, despite its year-long dispute with
Greece over the Aegean and Cyprus, and the US em-
bargo on arms sales, Ankara retains a basically
pro-Western foreign policy and commitment to NATO.
Turkey has warned, however, that the arms embargo
could force it to review its obligations should
materiel shortages substantially reduce the effec-
tiveness of its armed forces. Nationalistic pride
is now coming to the fore, and it is likely that
Prime Minister Demirel will feel himself increas-
ingly vulnerable unless he directly addresses the
issue of the embargo.
25X1
Demirel doubtless wishes to 25X1
discuss the arms embargo issue at the summit.
Italy's severe economic problems have weakened
its ability to fulfill its military commitment to
the Alliance. Military leaders are concerned that
the armed forces will not only be unable to meet
NATO standards but that they will not even be capa-
ble of fulfilling their basic mission of defending
Italian territory.
As a result of the economic situation, the
Italians have made significant reductions in the
strength of their army. NATO-committed units are
being maintained at levels far below NATO standards.
Moreover, due to rising costs and domestic political
pressure, fewer conscripts are being drafted, and
the period of service for conscripts will soon be
shortened. In addition, all services are short of
equipment, spare parts, and ammunition.
(continued)
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An imbalance between operating costs and capital
expenditures is likely to continue over the next
several years, forcing Italy to stretch out needed
programs for modernizing equipment. Plans for re-
structuring the army and for cutting nonessential
spending have been considered, but these plans could
take several years to implement.
Portugal's removal of its authoritarian regime
and its decision to divest itself of its African
colonies was generally applauded by the NATO allies.
As the new regime has moved to the left, however,
the allies have become increasingly uneasy. The
presence of communists in the Portuguese government
prompted the Alliance to cut off the flow of nuclear
information to Lisbon and to ease the Portuguese
out of the Nuclear Planning Group.
Portuguese spokesmen have stressed that Lisbon
will honor all its international obligations, in-
cluding those to NATO, and the Portuguese have in
fact carried on in a business-as-usual fashion.
This does not mean that Portuguese participation
in NATO is assured for the longer term. For the
present, there are few signs that Lisbon's some-
what truncated role ?is causing them much discomfort.
Nonetheless, over the coming months, the Portuguese
will be asking themselves what advantages they de-
rive from continued participation.
Lisbon may see advantages to remaining in NATO
if Portuguese leaders perceive some allied sympathy
for what they are attempting to accomplish. If,
on the other hand, they see a prevailing attitude
of hostility and suspicion, they are likely to
reciprocate. In the latter case, Lisbon might pre-
fer to avoid a precipitous withdrawal, but its
membership in the Alliance might become little more
than minimal.
The Economic Pinch
NATO's troubles are by no means confined to
the political sphere. A recent study of the polit-
ical and security implications of the world eco-
nomic situation pointed out that the NATO countries
face in varying degrees:
--economic stagnation, accompanied by a high
level of unemployment;
--high rates of inflation;
(continued)
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--balance-of-payments problems aggravated by
the need to pay high oil prices; and
--dependence on outside suppliers for oil and,
in Europe, for other strategic raw materials.
Economic pressures have already caused not
only the Italians but also the British and Dutch
to cut both their armed forces and military budgets.
Should economic problems worsen, still other allied
governments will find it difficult to resist domes-
tic political pressures to reduce defense expendi-
tures. Such retrenchments would be psychologically
debilitating, hamper force-improvement programs,
and even strain the ability of the West to maintain
a unified position in the force reduction talks.
The Generation Gap
NATO's quarter century now spans a generation,
and the younger opinion makers, political leaders,
and voters in Europe have a different perspective
on history and current events than their elders.
The younger people have few or no memories of
World War II or of early postwar Europe, and many
of them question the necessity to maintain large
standing armies. Many also regard NATO as an anach-
ronism and do not necessarily perceive the Soviet
Union as a threat to Europe, especially in a period
of detente.
The influence of the younger generation varies
from country to country, but it is clear that Euro-
pean governments must take their views into account.
Political pressures have already led to decisions
by Denmark to reduce the period of time conscripts
must serve, by Belgium to modify conscription laws,
and by the Netherlands to reduce its armed forces.
Some NATO observers are concerned that such deci-
sions may establish dangerous precedents that will
be cited by other governments when they are faced
with demands to retrench.
Reviewing East-West Issues
The summit will focus on the European security
conference and the force reduction talks. The Euro-
peans will be deeply interested in hearing US views
and in learning of US perceptions of the Soviet at-
titudes toward these talks.
(continued)
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The major question for the Europeans concerning
the European security conference in Geneva is how
hard they should push the Soviets to make compro-
mises before the allies accept Moscow's proposal to
conclude the conference this summer with a summit
meeting. The Soviets apparently have revised their
timetable for holding the summit meeting, but--un-
less Brezhnev's health problems make it impossible
for him to attend--they probably will continue to
push for a conclusion before August.
Although many of the Western delegations have
grown weary of the conference and desire to end it,
they still wish to obtain something, if only to
justify attending a summit. In particular, the West
Europeans hope to obtain some measures to facilitate
the freer movement of people and ideas between East
and West. It is on this issue that the Soviets have
been most inflexible. In essence, the allies will
be asking whether the US wants to wait out the So-
viets on the issues of most interest to them, and if
the US will support them in this endeavor.
The major question for the allies on the force
reduction talks is whether the US will seek to end
the stalemate in Vienna by recommending use of the
so-called Option III--the offer to withdraw US nu-
clear warheads and delivery systems in return for
the Soviet Union's withdrawing armored forces. All
the NATO allies probably expect the US formally to
propose the use of this option, and they will sound
you out on this issue.
The British and West Germans have already com-
mented on a US paper addressing the possible with-
drawal of nuclear forces. The British have no ob-
jections in principle to making the nuclear offer,
but both they and the West Germans do have some res-
ervations.
Some of the other allies--the Netherlands for
instance--believe the nuclear offer must be made,
and the others, despite their reservations, will
probably not oppose it. Several of the allies will
probably insist on a thorough discussion within NATO
on the implications of the offer. .
The allies were briefed by Ambassador Johnson
on May 7 on the current status of the Strategic
Arms Limitation Talks, but the leaders might ask
for your views on SALT and again express their con-
cerns about the talks. In general, the Europeans
(continued)
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want the US to reject any Soviet attempt to discuss
non-central or "forward-based systems," and to
avoid measures that might restrict NATO's flexibil-
ity.
The Europeans will wish to exchange views on the
Middle East. They will particularly be interested in
Secretary Kissinger's recent discussions with Soviet
Foreign Minister Gromyko and in learning the US as-
sessment of the prospects for renewed peace negotia-
tions.
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