THE PRESIDENT'S DAILY BRIEF 31 JULY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014863
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: July 31, 1975

Declassified in Part- Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
The President's Daily Brief
July 31, 1975
?rreg.25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
Exempt from general
declassification schedule of ED. 11652
exemption category, 5B( I
declassified only on approval of
the Director of Central Intelligence
op-
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
s_
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
July 31, 1975
Table of Contents
Turkeyi
I (Page 1)
Portugal: The new executive triumvirate met yester-
day for the first time. (Page 2)
25X1
Azores-Portugal: The armed forces general assembly
in Lisbon was "shocked" when it 25X1
learned there is a real danger 25)(1
of independence in the Azores. (Page 3)
USSR: The USSR will incur the largest hard-currency
deficit in its history this year. (Page 4)
Notes: South Korea - China - USSR; Saudi Arabia -
France (Page 6)
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
=N.
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
TURKEY
1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
22S*1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A01-2700010043-9
FOR THE PRESIDENT ONLY
PORTUGAL
The new executive triumvirate met
for the first time yesterday following
the return of General Otelo de Carvalho
from Cuba, presumably to discuss the
new government.
The Revolutionary Council, now reduced to an
advisory role, met for 12 hours last night to dis-
cuss Prime Minister Goncalves'proposed cabinet.
The meeting was attended by Foreign Minister Antunes
and other moderates, who had refused to participate
in last week's meeting of the Armed Forces Assembly
that had turned over power to the triumvirate.
A communique ?issued after last night's session
declared that the members of the Revolutionary Coun-
cil have delegated all their powers to the triumvirate.
According to a Council spokesman, the composition of
the new government has not been decided. He said
that because President Costa Gomes is departing for
the Helsinki summit tomorrow, a new government will
not be sworn in for the next few days.
Upon his arrival in Lisbon, Carvalho repeated
comments he made several weeks ago to the effect
that it is no longer possible to carry out a so-
cialist revolution in Portugal by peaceful means
and that he is prepared to use force. Even allow-
ing for his flamboyant personality, Carvalho's re-
marks sound ominous and may intimidate the moderates.
The three-day national labor congress that
ended on Sunday confirmed the determination of the
Communists to retain their grip on the upper eche-
lons of the trade union movement. The congress was
convened at this time in order to install a Commu-
nist-dominated national leadership before the indi-
vidual unions--in which the non-communists have been
showing some strength--could hold their internal
elections.
The congress approved with only minor changes
an "orientation and action" program prepared by
the national confederation and heard a speech from
Prime Minister Goncalves--characterized by the em-
bassy as "ranting"--in which he said that the unions'
struggle is a "fight to the death against capital-
ism."
2
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14: CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
AZORES-PORTUGAL
The military governor of the Azores,
General Magalhaes, reportedly "shocked"
the armed forces general assembly in Lis-
bon when he stated that there
is a real d- anger of Azorean independence.
Azorean
demands for self-rule.
--The majority of the population in the Azores
supports independence.
--The majority of the Portuguese military on
the islands is also sympathetic.
--Establishment of a governing board for the
Azores composed of leftists will be met with
violence.
--The Azoreans identify more with the US than
with Portugal.
The new leadership in Lisbon is unlikely to
go as far as qrantina the Azoreans complete sef-
rule.
Magalhaes is extremely popular in the
islands, but Azoreans fear that Portugal's radical
leaders will try to appoint a majority of local
communist sympathizers and leftist nationalists to
such a board--a move that would almost certainly
be met by a storm of protest. Conceivably it could
trigger a move for independence.
The islands are an important bargaining chip
in Portugal's relations with the US and perhaps
its greatest source of leverage with the West.
These considerations are expected to weigh heavily
in determining Lisbon's response to sentiment in
the islands.
3
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
25X1
25X1
25X1
25X1
25X1
25X1
25)0
,
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
USSR
The USSR will incur the largest
hard-currency de_f_i_c_i_t_i_n_itz_1717-57-67y2
fhis year--perhaps on the order of $3
Imports of Western equipment
and grain will be up substantially,
and export growth will be negligible
because of recession in the West. The
USSR will have no difficulty in financ-
ing this anticipated deficit by gold
sales and credits.
Last year the Soviets incurred a hard-currency
deficit of only $900 million. Higher prices for
Soviet exports--particularly oil and raw materials--
led to a 58-percent increase in hard-currency earn-
ings to $7.6 billion; imports were up 30 percent
to $8.5 billion. In the fourth quarter of 1974,
however, exports went down and Soviet imports rose
rapidly, both developments being a result of the
growing recession in the West.
Since last October, the USSR has incurred
monthly trade deficits with its principal Western
trading partners. Continuation of this pattern
would mean a Soviet deficit of $3 billion or more
in hard-currency trade by the end of 1975.
--Imports of machinery and equipment this
year, based on the large volume of Soviet
contracts for Western plants and equipment
placed in 1973 and 1974, will reach a level
of $3.3 to $3.8 billion.
--Recent contracts for Western grain will
bring Soviet grain imports this year to
roughly $1 billion--double the 1974 level.
Additional Soviet grain purchases are likely,
perhaps some for 1975 delivery.
--Increases in sugar imports will exceed de-
creases in meat imports by about $200 million.
--Imports of steel products will approximate
last year's high level of $1.9 billion.
(continued)
4
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
--The continuing Western recession will make
it difficult for the USSR to increase its hard-
currency exports.
Moscow is in good shape, however, to finance
a deficit of $3 billion in 1975. Its cash position,
improved in 1974 despite the trade deficit. The So-
viets sold roughly $700 million in gold, obtained
a net of $600 million in medium- and long-term
credits, and earned several hundred million dollars
from arms sold to the Middle East after the October
1973 war.
A large part of the Western machinery and
equipment delivered in 1975. will be covered by long-
term credits. Net credits should exceed $1.4 bil-
lion. Moscow has already obtained $350 million in
medium-. and long-term Eurocurrency loans since De-
cember. Western bankers say that the Soviets could
raise substantiall mor the Eurocurrency market.
The USSR-h-as-, o s o gold to sell. It produces
ore thangMktons of gold annually and has more
-Nan-Six timegt at amount in reserves. Sixty-two
tons, worth 325 million, reportedly were sold in
the West_la,the first half of 1975, and an addi-
tionalE7I0i7sale to Arab buyers has been rumored.
-SZViet gold sales during the balance of the year
could rise considerably without depressing prices,
if as we expect, South Africa sells less.
By late 1975 or early 1976, Soviet exports
should resume their growth in response to the ex-
pected recovery of Western economies. To avoid a
further deterioration of its debt position, Moscow
probably will then give priority to cutting the
trade deficit rather than to further expanding im-
ports.
5
25X1
25X1
25X1
25X1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
FOR THE PRESIDENT ONLY
NOTES
25X1
Saudi Arabia
and France
25X1
South Korea's renewal of its application for
UN membership yesterday is likely to present the
Chinese and Soviets with difficult decisions in the
Security Council.
? In the past, Moscow and Peking have supported
North Korea, which has opposed UN membership for
the two Koreas on grounds that this would ratify
the division of the country. This year, South
Korea has linked its application with those of the
two Vietnamese states by getting US agreement to
veto one or both of the Vietnamese applications if
the Chinese or Soviets should veto South Korea's.
The Vietnamese will probably ask the Chinese and
Soviets to avoid taking any action that would jeop-
ardize their applications. The Soviets have been
non-committal; the Chinese would almost certainly
side with Pyongyang if they have to choose between
the Vietnamese and the Koreans.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9
25X1
Declassified in Part -Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936/0;012700010043-9
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010043-9