CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022200070001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: December 14, 2016
• Document Release Date: June 9, 2003
• Sequence Number: 1
• Publication Date: June 30, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N! 42
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No. 0156/72
30 June 1972,
Central Intelligence Bulletin
WEST GERMANY - FRANCE: Assessment of forthcoming
Brandt-Pompidou meeting. (Page 1)
SOUTH VIETNAM: Situation report (Page 5)
SINGAPORE: Currency pegged to US dollar (Page 5)
WEST GERMANY: Economy recovers (Page 6)
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WEST GERMANY - FRANCE: The EC summit and
monetary policies will be principal topics in talks
between Chancellor Brandt and President Pompidou on
3-4 July in Bonn.
Foreign Ministers Scheel and Schumann on 23
June sought common ground on as many issues as pos-
sible in an effort to smooth the way for the semi-
annual Brandt-Pompidou session. With national elec-
tions approaching in both West Germany and France,
Brandt and Pompidou have an interest in a successful
meeting of the six present and four incoming members
of the EC. The West Germans and French now appear
willing to postpone a decision on an issue that has
been clouding summit prospects--the creation of an
EC political secretariat. Scheel and Schumann also
coordinated policies on preparations for the Confer-
ence on Security and Cooperation in Europe and on
the inter-German talks.
Brandt and Pompidou may have more difficulty
reaching an understanding on how to deal with prob-
lems generated by the weakness of the dollar in
European money markets and the British decision to
float the pound. Schumann advanced the French de-
sire for greater coordination and the urgent need
for a European monetary union as a way of preserving
European identity against the encroachment of Amer-
ican economic power. Brandt also hopes to focus on
West European economic integration, in part to off-
set criticism that he has been too preoccupied with
Ostpolitik, but he is likely to resist French de-
mands for the creation of a European monetary zone
and insist that any agreement on monetary matters
not be at the expense of US-EC relations.
Some of the German-French differences in the
monetary field, however, probably have been narrowed
by a cabinet decision in Bonn on 29 June. In a
30 Jun 72 Central Intelligence Bulletin
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significant move toward instituting monetary con-
trols--a point long insisted on by France--measures
were announced to tighten controls over the inflow
of capital by placing restrictions on the sale of
f
German securities to foreigners and the purchase
foreign capital by German businessmen.
30 Jun 72 Central Intelligence Bulletin
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SOUTH VIETNAM: The government's counter-
offe save into Quang Tri Province is encountering
only moderate resistance. Two South Vietnamese
Marine brigades have advanced from the My Chanh
defense line to a point northeast of Quang Tri
City. In addition, two marine battalions have
been lifted by helicopter into positions east of
the city. The airborne units operating west of
Route 1 have made less progress, but they re-
portedly have killed several hundred troops.
Communist units have often been slow in reacting
to South Vietnamese offensive thrusts, but once
they have determined the best way to counter the
current drive, it seems likely that enemy resist-
ance will stiffen. In spite of heavy losses in
recent months, the Communists still have a sub-
stantial force of infantry troops, along with
artillery and mor, in the area.
SINGAPORE: The government has decided to peg
its currency to the US dollar rather than sterling
in order to protect itself against higher import
costs resulting from the UK's de facto devaluation
of the pound. Singapore's imports of heavy machjn-
ery have been increasing rapidly to support its
industrialization program, and this trend probably
will continue for some time. If the US dollar does
not weaken significantly, Singapore will realize
substantial savings from this measure. The govern-
ment is required by an agreement with the UK to
hold at least 36 percent of its reserves in sterling.
For several months, however, it has been reducing
these holdings and probably will seek to abrogate
the UK agreement in order to reduce them even fur-
ther.
(continued)
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WEST GERMANY: Bonn's trade performance in
May is further evidence that West Germany is re-
covering from the economic doldrums of late 1971.
Exports were up 14 percent from May of last year,
and imports rose 15 percent. The export surplus
for last month exceeded US$400 million, up slightly
from a year earlier. Although the upward trend
in exports largely reflects orders placed some
time ago, the recent rise in new export orders is
an encouraging sign to the business leaders that
Germany's competitive position was not as seri-
ously hurt by last year's revaluation as they
initially feared. Because prices in some key for-
eign countries are rising faster than in Germany,
German industry should regain much of its competi-
tive edge.. With economic growth in Germany's
major trading partners accelerating, export demand
now will provide a greater stimulus for the domes-
tic economy than West German officials had antici-
pated earlier.
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The United States Intelligence Board has ap-
proved the following national intelligence estimaep:
NIE 28-72 "Prospects and Problems in
NATO's Northern Region"
NIE 94-72 "Chile: The Alternatives
Facing the Allende Regi te"
30 Jun 72 Central Intelligence Bulletin 7
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