REPORT OF WHITE HOUSE/STATE USICA MAY 14 PARIS MEETING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R002100110010-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 21, 2016
• Document Release Date: June 24, 2008
• Sequence Number: 10
• Publication Date: May 17, 1982
• Content Type: CABLE

132210 ICA6117
17//9111
...< ...........................................................
INFO DSO-01 /OBI AS
................................................................
D 1711171 "AV 42 IFF-4
FM AMMBASSY PARIS
TO USICA WASHOC NIACT IMMEDIATE 2451
IT
S [ C I [ 7 SECTION 81 Of It PARIS 17403
D'S ICA
FOR DIRECTOR VICK PASS IALOYGA AND SCHNEIDER FROM HEDGES
1. 0. 12165: ROS-1 5/17102 WEDGES, JOHN L, OR-0)
SUBJECTt 'REPORT OF AMITE HOUSE/STATE/USICA MAY 11 PARIS
MEETING
1. .0-ENTIRE TEXT)
12. FOLLOWING IS A REPORT OF DISCUSSION AT THE MAY 14
WHITE MOUSE/STATE/USICA METING HELD AT?AMEMJIASSY PARIS.
IN VIEW OF ITS SENSITIVITY, IT IS SENT IN THIS-CHANNEL FOR
YOU TO DETERMINE FURTHER DISTRIBUTION.
3.? DISCUSSIONS WERE HELD FROM 0900 70 1230. PARTICIPANTS
WERE: USICA/WASHINGTON--DIRECTOR WICK, MICHAEL SCHNEIDER,
MICHAEL EISENSTADT; WHITE MOUSE--HENRY MAU; STATE
DEPARTMENT --ROBERT NORMATS; PUBLIC AFFAIRS OFFICERS--
PANS TUCK tUNNI, PHILIP ?RNDLD iLONUDNI, JOHN HEDGES
'PARIS), STANTON SU;.IIETT IR0ME), DELL PENDERGRAST QLSEC),
MERRY GRADY 0)510), ROBERT VDZNIAN (USNATO), AURELIUS
FERNAKDEZ RISOEC0). OBSERVERS WERE: MICHAEL ELY,
CHARGE ?D'AFFAIRES, AMERICAN EMBASSY, PARIS; ?ACAO'SNERIDAN
BELL ? MOTE TAKER).
4. M. VICK'?VELCOMED MESSRS. NORMATS?AND MAU AIM THANKED
SRE11'1011 AGREEING TO BRIEF ON TME'PRESSINB ECONOMIC ISSUES
OF?TME VERSAILLES SUMMIT AND HOPED THEY WOULD ADDRESS ..ALSO
SNE?LONG-TERM ECONOMIC GOALS OF THE U. S. NE EXPRESSED
RPPRECIAT ION FOR THE ROLE OF MESSRS. RDRIIATS 'AND PALMIER
OF'-STATE 10 THE SUMMIT YOUTH EXCHANGES PROJECT.
:.? `IIR. RORMATS SAID THAT WHAT WE-ARE?TRYING TO DO IS VERY
!IMPORTANT. A FEELING EXISTS IN EUROPE THAT THE US IS MOT
EITIVE TO ITS CONCERNS. THIS IS NOT TRUE. WHILE IT 13
CORRECT THAT THE ADMINISTRATION HAS SPENT A LOT OF TIME
SETTING OUR OWN ROUSE IN ORDER, WE ARE NOV TRYING TO
STRENGTHEN INTERNA71011AL ECONOMIC COOPERATION. AS AN
EXAMPLE OF OUR CONCERN, NE MAD A BRO1DER ANO NIGHER .LEVEL
RTTRESEIRATION THAN ANY OTHER DELEGATION AT THE RECENT DECO
KMISTERIAL MEETING, SHOVING ME. ARE DEEPLY CONCERNED.
6.?'T1E.SOMM17 IS EXTREMELY IMPORTANT; TOR THERE IS A SENSE
OF'CRGENCY ABOUT ECONOMIC ISSUES IN AN INTERNATIONAL.
ECONOMIC SITUATION MORE COMPLEX THAN EW BEFORE. MAJOR
TNEIIES"TO BE TREATED WILL BE MONETARY. 00PERATION, MEDIUM-
TERM?ECONONIC OBJECTIVES, ST'RENGTRE'ING THE TRADING STSTEM
AKD4NE WESTERN CONSENSUS ON CREDITS *10 THE SOVIET -UNION.
* OBJECTIVE IS ROT}ECONOMIC VARFARE.SUT TO PUT INTER.
NATIONAL RELATIONS WITH THE SOVIET ONION OH A'ZOUNO ttONOM-
It-FOOTING. VE DD'1'T SUBSIDIZE CREDITS AMONG OURSELVES,
SD AMY SHOULD WE DO 11 OR' THE SOVIETS! WE'ARE TRYING TO
0SE ENERGY, NOT AS A DIVISIVE ISSUE. BUT AS A UNIFYING 011,
POINTING OUT, FOR EXAMPLE, SOV USE OF I10RE COAL CAN BENEFIT
ILLL OF MIS.
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0 J OGA 111 G
Jtl,tlt I
INTERNATIONAL TELEGRAM
COMMUNICATION AGENCY
132211 ICAI$1
AND $0 WE USE TRADE AND INVESTMENT. SOME DEVELOPMENT ODES
RELY ON AID, AND WE :MOULD PROVIDE AID TO THE POORER
COUNTRIES, BUT OTHER COUNTRIES MUST RELY MORE ON TRADE AND
INVE".IMENI.
1. DIRECTOR VICK HAS SPEARHEADED THE ATLANTIC-PACIFIC
YOUTH INITIATIVE, WHICH RESPONDS TO SEVERAL ELEMENTS:
FIRSit THE DRIFTIII6 APART OF CONTACTS AMONG US. WE
SHOULD ATTEMPT TO REFORGE A CONSENSUS ON SNARED VALUES.
SECOND, YOUTH IS CONSIDERED A 116 PROBLEM IN EUROPE, AND
WE'SHOULD BE CONCERNED ALSO. MR. MORMATS COMMENDED MESSRS.
WICK AND 4HAPMAN FOR THEIR SPECIAL AND UNIQUE CONTRIBUTION
TO THE YOUTH EXCHANGE INITIATIVE.
1. AFTER EXTENSIVE DISCUSSION AMONG THE MEETING PARTICI-
PANTS, IT VAS AGREED THAT YOUTH EXCHANGES, WHICH FIT IN
WELL WITH SHARED VALUES, SHOULD BE MENT.I0UED EVERYWHERE
POSSIBLE--IN PRESIDENT REAGAN'S DEPARTURE STATEMENT FROM
THE U.S., IN PRESIDENT MITTERRAND'S SATURDAY STATEMENT,
AND ESPECIALLY IN THE SUNDAY COMMUNIQUE IF AT ALL POSSIBLE,
FOR IT WOULD THEN BE A LASTING SPARK, A THEME TO CARRY
THROUGH. DIRECTOR VICK STATED THAT THE LANGUAGE CONCERNING
THE YOUTH EXCHANGE INITIATIVE WAS LESS THAN OPTIMAL AND.
SHOULD RE IMPROVED.
it. IN CONTINUED DISCUSSION OH SUMMIT ECONOMIC ISSUES,
M. MAU EMPHASIZED DOMESTIC ECONOMIC, TRADE, AND BASIC
=ATTITUDES TOWARD MONETARY ISSUES. 'MR. NORMATS SAID THAT ON
THE MACROECONOMIC SIDE, IT IS HARD TO KNOW EXACTLY WHERE WE
.:STAND. ON TRADE PROBLEMS, THE U. S. PUTS EMPHASIS ON THE
~-.lEED FOR CORRESPONDING DOMESTIC POLICIES AS OFFSETS, WHILE
':OTHERS EMPHASIZE THE IMPACT OF EXCHANGE RATES. THE FRENCH
ARE PARTICULARLY INTERESTED IN CONDITIONS AFFECTING MONE-
..-?ARY STABILITY AND EXCHANGE RATE REQUIREMENTS. WE NEED
IT CO
..%87433 T-
DIE
FiG
0,
?
I.-VI IORTN-SOUTH ISSUES, WE -RDtONCEII-HAVE A LOT Of AID,
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
SECRET
INTERNATIONAL
COMMUNICATION AGENCY
012711 IC~G5$
PAGE It 17/1 121
._??.? ....................?-----?._..-----...-----------_.~'...
INFO QSQ'81 /001 AS .......
0 1719671 MAY $2 IFF-4
FM AMEMBASSY PARIS
TO USICA VASNDC NIAtT IMMEDIATE 2452
Bi
S E C R I I SECTION $2 OF 11 PARIS 17493
USICA/DIRDIS
FOR DIRECTOR WICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
MORE CODPERAj10N, MORE EFFECTIVE CONSULTATION, MORE FOCUS
ON REAL ISSUES AND POLICIES, SUCH AS NOW TO REDUCE BUDGET
DEFICITS AND INFLATION RATES. MR. ARNOLD STATED THAT IN
LONDON, THE THREE QUESTIONS ON EVERYONE'S MINDS ARE HIGH
U.S. INTEREST RATES, PROTECTIONISM ISUMMED UP BY WHAT
MARGARET THATCHER REPORTEDLY TOLD HAIG: 'AL, GET THE
DAPS'), AS WELL AS CREDITS AND NIGH TECHNOLOGY SALES TO
THE SOVIET UNION.
11. MR. NORMATS SAIb THAT EUROPEANS ARE ASKING WHY
INTEREST RATES ARE GOING DOWN NOW, SUSPICIOUS THAT WE ARE
INTERVENING 10 FORCE THE RATES DOWN BECAUSE OF THE APPROACH-
ING VERSAILLES SUMMIT. HIS RESPONSE IS TO TELL THEM THAT
VITN INFLATION GOING DOWN AND WITH THE EXPECTATION OF
INFLATION DIMINISHING FURTHER, INTEREST RATES ARE HEADED
DOWN AND, OVER THE MEDIUM TERM, THE DOLLAR IS GOING TO
STRENGTHEN. IF THE INTEREST RATES CONTINUE TO FALL, IT
WILL BE BECAUSE THERE ARE LOWER INFLA'110NAHY EXPECTATIONS.
PRESIDENT REAGAN WILL SAY THAT HIS OBJECTIVE IS TO GET
I NCOM-1I NG.
TELEGRAI
NOT WANT TO DISCUSS THIS ISSUE AT VERSAILLES, AND SO
MR. NORMATS IS TELLING THEM THAI IF THE ISSUE IS DECIDED
BEFOREHAND, THEN GREAT, IT WON'T BE NECESSARY TO DISCUSS
IT AT VERSAILLES. BUT HE IS NOT SURE THAT IT WILL BE
DECIDED BEFORE.
13. MR. TUCH SAID THAT AMBASSADOR BURNS EXPLAINS OUR
POLICY AS LETTING THE MARKET REGULATE ITSELF AND THAT
GOVERNMENTS SHOULD NOT INTERFERE WITH THE WORKINGS OF THE
MARKET. MR. NORMATS POINTED OUT THAT IRIS ARGUMENT IS NOT
ACCEPTED BY WILLY BRANDY AND THOSE WHO CARRIED OUT OST-
POLITIK. WE SAY THAI IT DOESN'T HELP TO HAVE LARGE
VULNERABILITY. MOST OF THE GERMANS UNDERSTAND ARGUMENTS
WHICH ARE COMMERCIALLY SOUND. DIR. HORMATS DEPARTED FOR
A SHERPA MEETING.)
14. DIRECTOR WICK SAID THAT PADS ARE SENSITIVE TO
ATTITUDES IN THEIR COUNTRIES, AND THEIR VIEWS DEMAND
POSITIVE ATTENTION. MR. HEDGES STATED THAT THE FRENCH
PERCEPTION IS THAT THE AMERICAN ECONOMY IS OUT OF WACK,
THREATENING THE ECONOMIES OF WESTERN EUROPE. DURING HIS'
EUROPEAN VISIT, THE PRESIDENT SHOULD ADDRESS THAT SUBJECT
IN HIS DEPARTURE STATEMENT FROM THE U. S. AND ELSEWHERE.
HE SHOULD REFER TO THE HEALTH OF THE AMERICAN ECONOMY,
FOR THERE ARE LOTS OF REASONS FOR HOPE, ESPECIALLY WITH
THE REDUCTION IN THE INFLATION RATE, WHICH HAS NOT RECEIVED
AS MUCH POPULAR ATTENTION AS IT SHOULD.
15. MR. PAU SAID THAT SOME EUROPEANS IDENTIFY THE
ADMINISTRATION WITH THE WESTERN COWBOY WHO SHOOTS FROM THE
NIP AND WITH CALIFORNIA, WHICH HAS A SUPERFICIAL CHARACTER
IN THE EYES OF MAkt OF THE EUROPEANS. EUROPE FOR THE REST
INFLATION RATES DOWN, AND THAT INTEREST RATES VILL THEN . 07433
FOLLOW 10 A DEGREE, BUT NOT NECESSARILY POINT TO POINT.
THERE IS NO MAGICAL ANSWER TO THE PROBLEM OF NIGH INTEREST
RATES, EXCEPT, THROUGH REDUCED INFLATION AND REDUCED
BUDGET DEFICITS. MR. MAU ADDED THAT THE U. S. HAS TO
EXERCISE FISCAL DISCIPLINE. 110W THERE IS AGREEMENT
BETWEEN THE ADMINISTRATION AND THE REPUBLICANS IN THE
SENATE, AND WE VILL TRY TO SET AGREEMENT WITH THE DEMO-
CRATIC ROUSE. AT WORSE, IF THERE IS A STALEMATE, THE
ISSUES WILL BE PLAYED OUT IN THE NOVEMBER ELECTIONS, AND
UNLESS THE ELECTIONS PRODUCE A TOTAL STALEMATE, THERE VILL
BE A RESOLUTION OF THE DEFICIT fROBLEM.. HE SAID WE NEED TO
KEEP REMINDING THE EUROPEANS THAT WE ARE NOT PURSUING HIGH-
INTEREST POLICIES. WHEN WE HAVE INTERVENED THROUGH MONE-
fhRY POLICY TO TRY TO REDUCE INTEREST RATES, WE NAVE
GOTTEN THE OPPOSITE EFFECT. MR. NORMATS,ADDEO THAT WHEN
WE REDUCE INFLATION. WHEN WE GET THE BUDGET "DEFICIT DOWN,
THEN INTEREST RATES VILL COME DOWN. THEY ARE BEING HELD
UP BY PSYCHOLOGICAL FACTORS. IN THE fIEDIUM-TERM, WE CAN
ENCOURAGE COUNTRIES JO KEEP THEIR DEFICITS DOWN, AND
THROUGH MUTUAL COOPERATION WE CAN MADE PROGRESS.
12. CONCERNING TRADE, OUR AIM IS TO IMPROVE THE TRADING
SYSTEM. MR. NORMATS RECOMMENDED REVIEWING SECRETARY
ST
LE WHICH
BROLK'E STATEMENTS IN THE MAT 14 WIRELESS FI
DESCRIBES OUR POLICY. THE EUROPEAN COMMUNITY 15 VERY
CAUTIOUS GES, AND THE FRENCH DON'T WANT TO
00 VERY MUCH AT ALL. THE JAPANESE, HOWEVER, ARE MUCH MORE
SUPPORTIVE ON IIULITtTERAL' ISSUES. VNEN ASKED WHETHER
'THERE-1S 'A CONSENSUS ON TRADE-WITH THE-SOVIET UNION.1
M7I. RORMATS REPLIED THAT THE IS NOT.AT THIS=POINT # WE
ARE MOT AFTER A TRADE VAR OR,ECONOMIC WARFARE WITH THE D
FUSSIANS. THE WEST IRS AN.11 BILLION DOLLAR EXPOSURE IN
THE EAST, AND POLAND AND ROMANIA ARE BIG PROBLEMS. THEY
NAVE GAINED REVERSE LEVERAGE, AND 00 WE WANT THAT? PUT
IN STRICTLY ECONOMIC TERMS, IT IS LUDICROUS TO SUBSIDIZE
THE SOVIET ECONOMY W17H WESTERN CREDITS. THE FRENCH 00
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
132214 ICA660
17/1$142
DSO'Q4 /BD4 A6
0 171{671 MAY III ZFF-4
FM AMEMBASSY PARIS
10 USICA WASHDC NIACT IMMEDIATE 2453
It
E C R g .T SECTION 93 OF 11 PARIS 17493
USICA
DIRDIS
FOR DIRECTOR VICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
OF THE DECADE HAS TO COME TO TERMS WITH WHAT IS NEEDED FOR
EUROPEAN FOREIGN POLICY. MR. MAU S1A0 THAT HE HAD BEEN
ASTOUNDED BY THE GREAT ATTENTION GIVEN IN EUROPE TO
REAGAN AS A CANDIDATE AND THEN BY THE EXTENSIVE COVERAGE OF
THE NEW ADMINISTRATION. THIS IS ONE OF THREE BACKGROUND
FACTORS. TO AFFECT EUROPEAN ATTITUDES, IT IS IMPORTANT
TO NAVE DIALOGUE WITH ALL ELEMENTS OF EUROPEAN OPINION;
WE CAN'T NAVE THEM FOCUSED 700 NARROWLY: FOR INSTANCE, THE
GERMAN MARSHALL FUND OF TOE UNITED STATES CONCENTRATES ON
MOST OF THE SAME EAST COAST GROUPS TRADITIONALLY INTER-
[STEP IN FOREIGN POLICY. WE NEED MUCH BROADER EXCHANGE AT
16. THE SECOND ISSUE IS IN THE SECURITY FIELD, ABOUT THE
N OF THE U. S. AND THE SOVIET UNION IN
RELATIVE POSITi6.'
MILITARY AND STRATEGIC POWLN. WE SHOULD NOT FOCUS ON IMO
IS AHEAD OF WHOM. IN THE PAST DECADE THE GAP HAS CLOSED
RAPIDLY, AS THE SOVIETS HAVE BUILT UP ARMAMENTS, AND
NAVE PROJECTED POWER ACROSS THEIR BORDERS. IT IS LESS
IMPORTANT WHO IS AHEAD THAN THE CLOSING OF THE GAP,
WHICH OAS RATTLED EUROPEAN PERCEPTIONS. WE NEED TO TRY TO
SETTLE DOWN, DEVELOP A COMMON PERSPECTIVE. IN THE PAST 2-
3 YEARS, SINCE THE NATO 1379 SESSION, THERE HAS BEEN
PROGRESS ON THE SECURITY ISSUE BUT NOT ON THE ECONOMIC ONE.
THE EUROPEANS ON THE ECONOMIC FRONT DON'T KNOW WHERE THEY
ARE GOING, AND FEEL THEY NAVE LOST THE CAPACITY:TO COMPETE.
ON THE SECURITY ISSUE THEY KICK AND SCREAM, BUT THEY ARE
MOVING. THE OTTAWA POLITICAL DECLARATION WAS REMARKABLE
FOR TOE COMMON VIEW OF THE BASIC SECURITY PROBLEM. NE
EXPECTS A SIMILAR STATEMENT 3OK THIS SUMMIT. THE FIRST
STEP IS TO GET A COMMON ANAL t~SIS. THE U.S. PRIVATE
OBJECTIVE (NOT A PUBLIC ONE) IS TO MOVE TORWARD DEFENSE
AND DETERRENCE. THE EUROPEANS SHOULD RECORIZE THAT
WITHOUT DEFENW AND DETERRENCE THEY CANNOT EXPECT RESTRAINT x-
ON DEFENSE.* IN PUBLIC, WE VILL EMPHASIZE SNARED VALUES,
WHAT IT IS THAT TIE ARE DEFENDINe AT THE BONN SUMMIT WITH
THE SPANISH ACCESSION TO NATO WE NAVE THE OPPORTUNITY TO
ACCENT SNARED FUNDAMENTAL DEMOCRATIC VALUES.
15. ON THE ECONOMIC FRONT, MR. NAU CONTINUED, THERE IS NOV
IN THE WORLD A MUCH MORE EQUAL DISTRIBUTION OF ECONOMIC
POWER, WHICH UNDERLIES THE TRADE PROBLEM WITH JAPAN. IT IS -
MOST DIFFICULT TO COME TO GRIPS VITN THIS CHANGED RELATO-
SHIP IN THE U. S. OUR ECONOMY IS STILL THE MOST IMPOR-
TANT IN THE WORLD, BUT OTAERS IN THE WORLD ARE NOV MUCH
MORE IMPORTANT. OVER TIM WE NEED'TO DEVELOP A MORE '
COOPERATIVE ECONOMIC MECHANISM. WE PRODUCE ONEJUARTER
(ABOUT THREE TRILL EON DOLLARS) OF THE WORLD'S WEALTH,
AND THE DOLLAR AFFECTS ANOTHER ONE-QUARTER OF INTERNATIONAL
PRODUCTION. WHEN ASKED NOW.WE DEVELOP MORE COOPERATION
WHEN TIE PERCEPTION IS THAT WE ACT 'IN FACT WITHOUT THE
APPEARANCE OF CONSULTATION, MR. NAU REPLIED THAT,
PRIOR TO OTTAWA, OUR ECONOMIC PROGRAM WAS NOT IN PLACE. ON
THE ISSUE OF EXCHANGE MARKETS, WE NOW MAY BE ABLE TO TAKE
SECRET
INTERNATIONAL
COMMUNICATION AGENCY
INCOI-IIII1IG
TELEGRAM
16. MR. SCHNEIDER ASKED IF THERE IS SOMETHING THE U. S.
COULD DO WHICH, WOULD BE CONSTRUCTIVE AND CONCRETE. MR. NAU
REPLIED THAT THERE COULD BE A COMMON RESOLVE TO DO JOINT
STUDIES ON KEY ASPECTS. MR. SCHNEIDER OBSERVED THAT IF
THAT IS ALONE FORTHCOMING, IT MIGHT GET A CYNICAL RECEP-
TION. MR. NAU SAID THAT WE SHOULD NOT OVERLOOK THE
IMPORTANCE OF PERCEPTIONS, OF THE VALUE OF THE COMMUNIQUE
IN PROJECTING SENSITIVITY 10 EUROPEAN PROBLEMS AND
COMMITMENT TO THEIR SOLUTION. A PERCEPTION NOV 1S THAT
WHILE THE U. S. HAS GOTTEN OUR HOUSE IN ORDER, IT DOESN'T
GIVE A RAP ABOUT ANYONE ELSE. MR. SCHNEIDER QUESTIONED
WHETHER OR NOT THEY DO PERCEIVE OUR HOUSE AS IN ORDER.
17. MR. NAU REPLIED THAT WE ARE MAINTAINING OUR POLICIES.
AT THE OECD MINISTERIALS, ONLY THE DANES SAID SOMETHING
CRITICAL ABOUT OUR MONETARY POLICIES; THEY ALSO WANT FIS-
CAL DISCIPLINE. WE HAVE SAID THAT WE WOULD INTERVENE
ONLY IN DISORDERLY MARKETS, AND WE INTERVENED ONLY AT
THE TIME THE PRESIDENT WAS SHOT, ALTHOUGH WE NAVE BEEN
CLOSE TO INTERVENING AT OTHER TIMES. AT VERSAILLES THERE
COULD BE A COLLECTIVE STATEMENT NOT 10 EXCLUDE INTER-
VENTION IN EXCHANGE MARKETS, TAKING THE UNILATERAL
APPROACH AND WRAPPING IT IN A COLLECTIVE STATEMENT.
PERHAPS WE CAN NAVE MORE EXTENSIVE CONSULTATIONS.
it. MR. FERNANDEZ ASKED ABOUT STUDIES ON EXCHANGE RATE
INTERVENTION. MR. NAU REPLIED THAT OUR TREASURY PEOPLE
ARE CONVINCED THAT INTERVENTION DOES LITTLE GOOD; THE
BUNDESBANK IS PRIVATELY IN AGREEMENT ALTHOUGH IT CARRIES
OUT MORE INTERVENTION THAN WE 00. THERE IS NO STATISTICAL
EVIDENCE THAT SHOWS THAT SMOOTHING WORKS. BUT WE ARE
By
17433
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 SECRET
INTERNATIONAL
COMMUNICATION AGENCY
032216A661
17 19162
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
0 1711071 MAY 12-IFF-4
IM AMEMBASSY PARIS
TO USICA WASHOC NIACT IMMEDIATE 2454
01
S E C R E T SECTION 14 OF 11 PARIS 17491
USICA
DIRDIS
FOR DIRECTOR VICK PASS SALOYGA AND SCHNEIDER FROM HEDGES
WILLING TO NAVE A MEETING WHERE WE ASK THE EUROPEANS TO PUT
ON THE TABLE THE RESULTS OF IN[ EUROPEAN MONETARY SYSTEM,
AND WE WILL PUT ON THE TABLE RESULTS OF ANALYSIS BY THE
FED OR ANOTHER INDEPENDENT SOURCE. WITH A FOCUS ON THE
RECORD OF PERFORMANCE, MAYBE WE CAN COME TO A GREATER
COMMON UNDERSTANDING. THERE ARE MANY FACTORS 'THAT
INFLUENCE PEOPLE'S PERCEPTIONS. IT IS 700 EASY TO ASSUME
THAT GREAT THINGS CAN HAPPEN AT THE SUMMIT--WE SHOULD BE
CAREFUL, CAUTIOUS AND CONSERVATIVE. WE DO NOT EXPECT
MtJOR STEPS; WE NEED TD BE CAREFUL AND GO (LOWLY. THE
EXPERIENCE SINCE RAMBOUILLEI SHOWS THE NEED 10 GO SLOWLY;
AFTER RAMBOUILLET PEOPLE EXPECTED GREAT PROGRESS AND THERE
WASN'T ANY.
IS. TO SUMMARIZE ATTITUDES, MOST PEOPLE SCREAM AT OUR
MONETARY POLICY AS THE CULPRIT FOR HIGH INTEREST RATES.
IRIS IS BECAUSE, FIRST, THE PERCEPTION SINCE THE ARRIVAL
OF THE THATCHER GOVLNNMENT THAT A 700 STRICT MONETARY
POLICY WAS NOT GOOD. SECOND, LAST YEAR THEY SAW NIGH
INTEREST RATES AS THE DIRECT CONSEQUENCE OF A DELIBERATE
MONETARY POLICY. THEY ASSUMED THAT THE U. S. LIKE THEM NAD
A LARGE EXTERNAL SECTOR, WHICH THE U. S. DOES NOT HAVE.
IT PAS TAKEN A YEAR 10 CONVINCE THEM THAT THE U. S. IS NOT
TRYING TO AFFECT INTEREST R THAT WE ARE ,MOT TANIPULA-
TING MONETARY POLICY 10 T2Y VE CERTAIN TARGETS ON
INTEREST RATES. A VIEW EX1RE SECRETARY REARN IS
- 71117w_
THAT MONETARY POLICY HAS BEEN? 11210 OVER THE PAST
YEAR. THE ORIGINAL PROJECTI "'PNE ADMINISTRATION WAS
FOR REDUCTION OF TOE MONEY SUPPLY'S GROWTH FROM S PERCENT-
7 PERCENT4 PERCENT-S PERCENT-4 PERCENT FROM 1939-94,
THUS A 1 PERCENT LOWERING OF'TSE RATE OF INCREASE PER YEAR.
INSTEAD, THE FED VENT FROM S PERCENI-IN 1911 TO 5 PERCENT
IN 1991. SOME PEOPLE BELIEVE THIS-DRASTIC REDUCTION
BROUGHT THE DEEP RECESSION.
21. MR. NAU SAID WE NAVE CHANGED THE WAY WE OPERATE
AND NOW WE WORK WITH. AGGREGATES. HE
MONETARY POLICY
,
DOESN'T CLAIM TO YNDERSIAND ALL THE TF'HNICAL ASPECTS, BUT
IF ONE LOOKS AT THE SHORT-TERM PERFORMACE OF THE FED, IN
THREE QUARTERS LAST YEAR MONEY SUPPLY GROWTH VARIED FROM
17 PERCENT TO ! PERCENT TO 11 PERCENT--A VERY ERRATIC
PERFORMANCE. SOME PEOPLE FEEL. THAT THE LONG-TERM TREND
AND THE SHORT-TERM VOLATILITY NAVE RESULTED II RAISING
INTEREST RATES ABOVE WHAT THEY WOULD NAVE BEEN OTHERWISE.
IN ADDITION TO 'MONETARY POLICY, WE HAVE THE ]PROBLEM OF THE
BUDGET DEFICIt, AND SOME PEOPLE FEEL THAT IF IT IS
IMPOSSIBLE TO REDUCE THE BUDGET DEFICIT, THE FED WILL
THEREFORE NAVE TO R(LAX THE GROSQH OF THE MONEY SUPPLY
AND THAT INFLATION WILL THEN TAKE OFF.
40
21. DIRECTOR VICK SAYD THAT ONE OF THE KNOTTIEST PROBLLMS
13 THE NUCLEAR ONE. VE NAVE'LOST GROUND SINCE '79 IN
RESOLVE IIKD POLITICAL CAPACITY AND ABILITY TO CONVINCE
ELECTORATES. THE COMMON PERSUASIVE THEME OF THE OPPONENTS
IS IF THERE ARE ENOUGH MISSILES TO KILL 6-7 TIMES OVER,
WHY NOT FREEZE ALL NUCLEAR WEAPONS. IF YOU READ EUGENE
I UUUE1111G
TEL EG At
ROSTOW, YOU $E[ THAT RUSSIA'S FIRST-STRIKE CAPACITY IS
SUCH THAI WE WOULD NOT BE ABLE 10 USE OUR MISSILES.
22. MR. NAU SAID THAI THERE IS A DISIINCIION BETWEEN THE
VIEWS OF GOVERNMENTS AND PUBLIC OPINION. IN WORKING WITH
THE POLICIES OF GOVERNMENTS THERE HAS BEEN REAL PROGRESS
SINCE 1979, ESPECIALLY WITH SCHMIDT. THIS RESULTED IN THE
MAY NATO AND IN THE OTTAWA DECLARAT1011S. HOWEVER, SOME
FEAR THAT WE GO TOO FAR AND IGIIORE ARMS CONTROL AND
DIALVGUE..'VE'WItt;~CONTINUE TO SEE IN THE WORK OF NATO
EVIDENCE THAT THE PROBLEM IS RECEIVING SERIOUS ATTENTION.
23. BUT WE HAVE TO CONTEND WITH PUBLIC OPINION AND THE RISE
OF CONCERN ON NUCLEAR POLICIES. THAT IS A FACTOR IN OUR
OWN ELECTIONS THIS FALL. MR. NAU SAID HE FEELS THAT THE
PRESIDENT'S SPEECH AT EUREKA IS A GOOD SCENE-SETTER FOR THE
EUROPEAN TRIP., THAT SPEECH HAD BEEN IN THE WORKS FOR A
WHOLE YEAR. OUR FEELING IS THAT WE NEED 10 HAVE A
BALANCED APPROACH WHICH CAN EMPHASIZE SHARED VALUES AND
ACCOMPLISHMENTS IN EUROPE. IN THE EUREKA SPEECH SENSITIVE
POSITIONS ARE STATED IN REGARDS TO ARMS CONTROL. WITH
A SENSIBLE AND BALANCED POSITION WE BELIEVE WE CAN GET
THROUGH THE TRANSITION PERIOD. SINCE THERE HAS BEEN IN
EUROPE A PERCEPTION OF A CLOSING GAP, THEY ARE RATTLED
AND NOT SURE IF WE ARE, FIRST, STRONG ENOUGH; SECOND,
COMMITTED, AND THIRD, THEY ARE ALSO FEARFUL THAT THERE IS
PERHAPS MORE DANGER NOW THAN BEFORE.
87493
24. MR. ARNOLD REITERATED HIS UNDERSTANDING THAT PRIVATELY
AT BONN THE ADMINISTRATION VILL BE EMPHASIZING DETERRENCE.
MR. SUCH STATED THAT THE PUBLIC EMPHASIS ON SHARED VALUES
FOR THE PRESIDENT'S TRIP IS AN IMPORTANT AND 600D CONCEPT.
THERE IS A SIGNIFICANT MINORITY OF PUBLIC OPINION WHICH IS
YEARNING FOR PEACE AND ECONOMIC SECURITY,- AND THEY SEE
THAT THESE PARTICULAR VALUES ARE NOT SHARED BY US. THEY
SEE US AS PRINCIPALLY DESIRING TO WIN A CONFLICT WITH THE
SOVIET UNION--THESE ARE OVERSIMPLIFICATIONS, BUT ONE HAS TO
OVERSIMPLIFY IN DEALING WITH 'PUBLIC PERCEPTIONS. THEY
THINK WE ARE CONCERNED WITH THE ECONOMIC SECURITY OF THE
BT + z'
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
SECRET INC O MIN G
INTERNATIONAL TELEGRAM
COMMUNICATION AGENCY
112223 ICAGGS
1T/19202
----------------------------------------------------
INFO 0S0.V4 /001 A6
0 1711172 MAY /2 ZFF-/
FM AMEMBASSY PARIS
TO USICA WASHDC NIACT IMMEDIATE 2457
11
S [ C A E T SECTION 67 OF 11 PARIS 17493
- IKTCA -
DIRDIS
SHE DOLS IN THE STATES THAT IT WOULD BE VERY VALUABLE.
MR. HEDGES SAID THAT ONE -PARIS-MATCH' PICTURE STORY
ON ROTH REAGANS, WITH OUESTIOIIS DIRECTED TO THE PRESIDENT,
WAS HOPEFULLY IN THE WORKS. THE DIRECTOR EMPHASIZED THE
NEED TO OPTIMIZE THE IMPACT OF THE PRESIDENT'S VISIT. HE
THEN TOLD MR. NAU THAT HE WAS IN PARIS FOR A MEETING ON
THE YOUTH EXCHANGE PROPOSAL AND MAD DECIDED TO COME A DAY
EARLIER FOR NAU'S MEETING, AND ASKED NAU EXACTLY WHAT WERE
THE INSTRUCTIONS HE HAD RECEIVED IN WASHINGTON FOR THIS
11EE11NG. MA. NAU REPLIED THAT, AS A'RESULT'OF THE USICA
FOR DIRECTOR WICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
TION OF INJUNCTIONS TO OTHER ORGANIZATIONS TO PRESERVE
AND EXPAND THE TRADING SYSTEM OF.THE 19105, FOR
INSTANCE, ALTHOUGH THE FRENCH 'HAVE NOT INTEREST IN PLAYING
THIS OUT BEYOND A CERTAIN POINT.
$9. MR. TUCK SAID THAT THE QUALITY OF THE RHETORIC WOULD
BE EXTREMELY IMPORTANT, AND THAT THE PRESIDENT'S NOVEMBER
It SPEECH MAD EXACTLY THE QUALITY NEEDED, ON THE ONE NAND
STATESMANLIKE AND ON THE OTHER HAND PERSONAL. IN HIS
PRESS CONFERENCE THE PREVIOUS NIGHT THE PRESIDENT STATED
PERFECTLY, -1 HAVE LIVED THROUGH TWO WORLD WARS, AND I
WANT MY CHILDREN NOT TO LIVE THROUGH THE SAME.'
36. MR. HEDGES SAID THAT THE AUDIENCE AIMED AT BY THE
PRESIDENT SHOULD BE THE GENERAL EUROPEAN PUBLIC, NOT ITS
INTELLECTUALS. SHIN THE PRESIDENT GOES TO SEE THE MAYOR
OF PARIS, THERE WILL BE A LOT OF PARISIANS WHO WILL WANT
TO CHEER RIM; DESPITE SECURITY CONSIDERATIONS, PEOPLE
SHOULD KNOW THE PRESIDENT'S ROUTE. AT LEAST IN FRANCE
THERE ARE A LOT OF PEOPLE.WHO WANT TO EXPRESS THEIR
SYMPATHY FOR THE U. S. MR. TUCK SAID THAT THE LIVE
PRESS CONFERENCE IN GERMANY WOULD BE THE OPPORTUNITY
10 TALK TO THE PUBLIC AS ONLY HE CAN 00; NE CAPTURED
711 IMAGINATION Of THE WORLD ON NOVEMBER 18. MR. ARNOLD
SAID THE PRESIDENT NEEDED TO MAKE PUBLIC STATEMENTS IN A
CONTROLLED FASHION. MR. NAU SAID THEY WANTED TO MAXIMIZE
SPONTANEITY. SECRETARY HAIG UNDERSTANDS EUROPE AND TRIES
TO CONVEY COMPLEX IDEAS. THE SECURITY CONSIDERATION 13
PARAMOUNT BUT WE HOPE TO ACHIEVE A BALANCE. WE CAN'T
BRING THE PRESIDENT OVER HERMETICALLY SEALED. WE WANT TO
CONTRAST WITH THE WAY BREZHNEV CAME TO WESTERN EUROPE.
DIRECTOR WICK DID NOT AGREE, AND SAID THAT HE WOULD
EXPRESS THE MEREST THAT THE IDEA THAT ONE NEEDED TO APPEAR
PHYSICALLY BEFORE THE PUBLIC WAS A HOLDOVER BEFORE THE AGE
OF THE IMPACT OF TELEVISION, AND THAT TENS OF MILLIONS OF
TELEVISION VIEWERS WOULD NEVER KNOW IF THE PRESIDENT WAS
APPEARING BEFORE A LIVE AUDIENCE OR NOT.
31. M. BURNETT SAID THE MOST IMPORTANT SPEAKING DATES
WOULD BE THOSE WITH TOE MEDIA, AND THAT TOE PRESIDENT'S
MESSAGE SHOULD BE THAT 4OF PEACE, NOT DETERRENCE, NOT
DEFENSE, NOT CRUISE HISSSLES. THE DIRECTOR SAID WE ARE
THE PEACE MOVEMENT. MR. HEDGES ADDED YES, BUT NOT AT ANY
PRICE. THE DIRECTOR ASKED WHAT MRS. REAGAN'S PUBLIC
ACTIVITIES WOULD BE. MR.-HEDGES MENTIONED THE PETIT
PALAIS, 61VERNY AND NORMANDY EVENTS--BUT EMPHASIZED THAT
NORMANDY WOULD NAYE'THE BIG IMPACT. MR. ARNOLD IDDED
THAT THE FIRST LADY CAN PLAY A USEFUL AND SUBSTANTIVE
ROLE, AND THAT IT WAS WORTH IT TO PUT-THAT BUS'IN
':a a
39. MR. NAU ASKED IF INEP.E WAS MUCH COMMENTARY IN EUROPE
ON TOE CLOSENESS IN A HUMAN WAY OF THE REAGANS; THE
DIRECTOR REPLIED THAT SHE WAS NOT SEEN ON TELEVISION AS
MUCH IN EUROPE AS IN THE STATES, AID ADDED THAT IF MRS.
REAGAN COULD PROJECT THE SAME IMPRESSION OF WARMTH THAT
REQUEST, THEY WERE DIRECTED TO CONDUCT A BRIEFING ON SUM-
MIT ISSUES FOR CONCERNED FADS AND THEY HAD DECIDED ON
PARIS SINCE THEY WOULD It COMING HERE. MR. NAU WONDERED
'IF THE WHITE MOUSE ADVANCE TEAM HAD ADDRESSED THE PUBLIC
RELATIONS ASPECT. BUT WAS TOLD THAT THEY HAD BEEN
INTERESTED IN THE LbGISTICAL ASPECTS OF THE TRIP. MR.
HEDGES SAID THERE HAD BEEN NO OPPORTUNITY FOR THE PADS TO
COMPARE NOTES COLLECT1V~ N ORDER TTOO Cu- i____m^
BHESIA1l1L0 JMPACT:' DIRECTOR K SIC TATED THAT THE PADS'
ASSESSMENT WAS VERY IMPORTANT SINCE THE PRESIDENT WOULD
ADDRESS THE MARKET WHICH THE PADS KNEW BEST. MR. NAU -
SAID THAT MR. HORMATS KNEW BEST THE ISSUES AND THE CONTEXT,
SINCE THE KEY MEETINGS WERE WHERE HE MET HIS COUNTERPARTS
IN RESTRICTED LUNCHES AND DINNERS, AND THAT HORMATS
COMMUNICATES DIRECTLY TO CLARK AND DEAVER DN SUBSTANCE.
MR. TUCK ASKED IF SUBSTANCE FOR THE PRESIDENT'S SPEECHES
WAS DETERMINED BY THE NSC, MR. NAU REPLIED THAT MESSRS.
NORMATS, SPRINKEL AND HIMSELF 00 AFFECT THE SUBSTANCE OF
THE PRESIDENT'S SPEECHES AS WELL AS MR. GERGEN. MR.
BURNETT SAID THAT IT WAS EXTREMELY VALUABLE TO H-11FIPRF.
VIEW OF WHAT WAS GOING TO BE SAID
TO BE PREPARED TO i
,
IT
11/93
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 132225 ItA669
17/19722
DSO 81 /OD4 A6
0 1719972 MAY $21FF-4
FM AMIMBASSY PARIS
tO USICA VASNDC NIACT IMMEDIATE 2159
/T
S I C R E I SECTION? $ OF 11 PARIS 17492 -
USICA
DIRDIS
FOR DIRECTOR VICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
99. DIRECTOR WICK ASSED THE PADS TO ADDRESS THE PUBLIC
AFFAIRS SITUATION IN THEIR COUNTRIES. MR. HEDGES SAID
THAT THERE WERE NOT 100 MANY PROBLEMS FORESEEN IN
FRANCE IN BILATERAL EVENTS SINCE THERE WERE FEW PUBLIC
PRONOUNCEMENTS SCHEDULED. IN THE PRESIDENT'S ONE-ON-ONE
VITN MITTERRAND, THE FRENCH WERE NERVOUS, FOR THEY DID
NEI WANT iT 10 APPEAR TNHT MITTERRAND WAS GIVING
SPECIAL TREATMENT TO ONE READ OF STATE AA THE EXPENSE OF
THE OTNERS ATTENDING THE SUMMIT. AFTEE MEETING MITTERRAND,
THE PRESIDENT WOULD BRIEFLY SEE THE PRESS. OTHERWISE
THERE WOULD BE PHOTO OPPORTUNITIES PRIMARILY. MR. NAU
ASKED IF THERE WERE ANTHING TO REINFORCE IN THAT MEETING
WITH THE PRESS. BEARING IN MIND THAT WE DID NOT WANT 10
PRECOOK THE OUTCOME OF IRE SUMMIT IN THE PUBLIC MIND.
41. MR. HEDGES SAID THAT THE MAJOR PROBLEM WAS THE WAY
TO ANNOUNCE THE MEETING. . MR. ELY ADDED THAT PRESIDENT
MITTERRAND WAS GLAD TO NAVE THE OPPORTUNITY TO MEET WITH
THE PRESIDENT, BUT THAT HE WAS PREOCCUPIED WITH THE SUM-
MIT AND DID NOT WANT TO CAUSE PROBLEMS WITH THE OTHER
CHIEFS OF STATE. THUS, THE FRENCH DID NOT WANT TO CALt
IT AN OFFICIAL OR'WORKING VJSIT. THn GAVE IN ON THE
VISIT TO THE MAYOR OF PARIS, PROVIDED LT BE VIEWED AS
A PRIVATE VISIT. MR. RIDGES SAIDfHE PRESIDENT'S'
REMARKS 10 CHIRAC SHOULD EMPHASIZE THE SPECIAL AFFINITY
OF AMERICANS FOR PARIS UP THE PEOPLE OF FRANCE. MR. MAO
ASKED IF THERE WOULD BE A STATEMENT AFTER THE LUNCH WITH
MITTERRAND AND MR. KEDGES REPLIED THAT THERE COULD It A
BRIEF COMMUNIQUE. MR. ELY NOtED THAT THE TWO PRESIDENTS
WOULD COME OUT TOGETHER ON THE STEPS OF ELYSEE PALACE,
AT WHICH TIME THERE WOULD BE A PHOTO OPPORTUNITY. MR.
NAU ASKED WHETHER THE SECRETARY OF STATE SHOULD GIVE A
SUBSTANTIVE BRIEFING ON BACKGROUND AFTER THE MEETING OF
THE TWO PRESIDENTS, AND MR. HEDGES SAID THAT IT WAS HARD
TO TELL, OUT THAT IN CASE THE FRENCH GAVE US THE SHIV,
WE MAD TO BE READY . MR. MAU SAID THAT HE ASSUMED THAT,
IRE FRENCH WOULD NOT GIVE US THE SHIV, AND THEN IT WOULD
If AN OPPORTUNITY FOR THE SECRETARY TO UNDERSCORE TAE
EXCELLENT RELATIONS BETWEEN FRANCE AND THE U. - S.
41. MR. SCHNEIDER ASKED IF THERE WOULD BE SUBSTANTIVE
MEDIA PROBLEMS AT VERSAILLES. MR. HEDGES SAID THERE
WOULDN'T BE BECAUSE OF THE VERY CONTROLLED PROGRAM. THERE
On SOME TECHNICAL, LOGISTICAL PROBLEMS, WHICH ARE BEING
TREATED. IT IIAS MENTIONED THAT THE U. S._GLANKET
BRIEFINGS AT OTTAWA RAO CAUSED MUCH CRITICISM; MR.
ARNOLD SAID THAT TIE BRITISH BAD BEEN FURIOUS, AID TRAY
WE BAD BEEN 100 CLEVER. MR. NAU REPLIED THAT TIE CANA-
DIENS MAD by REEK ALL THAT UPSET. HOWEVER, HI AREJIIOW
CONCERNED IOW VERSAILLES COMES OUT. NEVERTHELESS, WE .
WOULD NOT HOLD BACK BUT VOULD CONTINUE 10 DO TNINGt AS
WE NORMALLY DO. MR. NAU ASKED WHETHER THE FRENCH LIRE
WORRIED THAT WE WOULD TRr TO UPSTAGE THEII SHOW, MEDIA-
WISE. MR. HEDGES REPLIED THAT AS FAR-AS THE PRESIDENT
132225 ICA661
WAS CONCERNED, NO SUCH WORRY WAS APPARENT NOW. MR. NAU
MENTIONED THAI NO DIRECT CONTACT BY THE LEADERS WITH THE
PRESS OUTSIDE THE PRESS CONFERENCE WAS FORESEEN. MR.
HEDGES SAID THAT THE VISIT TO THE MAYOR OF PARIS WAS A
SALUTE TO THE PARISIANS AND AN OPPORTUNITY TO TIP IRE
AMERICAN NAT TO THE FRENCH PEOPLE, A STRICTLY NON-
SUBSTANTIVE EVENT BUT REAL OPPORTUNITY FOR WARMING FRENCH
HEARTS. MR. ELY SAID THAT THE VISIT WAS NICELY FRAMED,
AND THAT THE PRESIDENT WOULD GO FROM CITY HALL DIRECTLY
TO VERSAILLES.
42. MR. BURNETT SAID THAT THE DETAILS OF THE ROME VISIT
WERE WITH MR. DEAVER. ITALY WOULD BE VERY MUCH AFFECTED
BY WHAT WAS SAID IN THE OTHER COUNTRIES. THE PRESIDENT
WOULD MAKE A STATEMENT BEFORE LEAVING. HE POINTED OUT
THAT THERE WOULD BE AN ENORMOUS DEMONSTRATION"'TWO DAYS
BEFORE THE PRESIDENT'S ARRIVAL. HE FURTHER STATED THAT
THE ITALIANS ARE FOCUSSING ON THE MISSILE INSTALLATION
AND ON PEACE. HE STATED THAT WE CAN'T HOPE TO CAPTURE
THE HARD-CORE MEMBERS OF THE PEACE MOVEMENT, WHO ARE
COMMUNIST, BUT WE CAN HOPE TO CAPTURE THOSE AROUND THE-
EDGES OF THE PEACE MOVEMENT. WE SHOULD EMPHASIZE THAT
NATO HAS KEPT THE PEACE AND HAS BROUGHT THE SOVIETS TO
THE BARGAINING TABLE. THE RESPONSE TO WESTERN WEAKNESS
WAS THE SOVIET BUILDUP, WHILE THE RESPONSE TO THE WESTERN
BUILDUP IS NEGOTIATIONS. THERE IS GREATER PUBLIC AWARE-
NESS THAT THE CONTINUED WORK ON THE MISSILES IS RELATED
TO PEACE AND TO ARMS REDUCTIONS. FINALLY, THE SIMPLER AND
MORE FREQUENT THE PRESIDENT'S MESSAGES, THE BETTER.
43. MR. ARNOLD SAID THAT ONE COULD NOT FORESEE THE
IT
07499
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-i
SECRET NC 0111) IJ G
INTERNATIONAL TELEGRAM
COMMUNICATION AGENCY
 Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
SECRET INCOMING
INTERNATIONAL TELEGRAM
COMMUNICATION AGENCY
831116 1 A671
17/ 9131
INFO Dso_e4 /084 A6
r .....................................................
0 1711171 MAY 11 ZFF-4
FM AMEMBASSY PARIS
10 USICA WASMDC NIACT IMMEDIATE 1451
IT
S E C R E T SECTION 19 OF 11-PARIS 17493
USICA
DIRDIS
FOR DIRECTOR WICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
SITUATION CONCERNING THE FALKLANDS IN ANOTHER THREE
WEEKS.' THE BRITISH PUBLIC HAD BEEN INITIALLY ANGRY ABOUT
THE U. S. POSITION, ALTHOUGH THE GOVERNMENT KNEW WHERE
WE STOOD. IN HIS 36 HOURS IN LONDON, THE PRESIDENT WOULD
BE WITH OUEE TLES--BAD FOR PUBLIC REL4iIONS-r
BUT HE HAD BEEN INVITED BY THE QUEEN AND WOULD STAY IN
THE PALACE. THE PRESIDENT WILL MAKE TOASTS AT BANQUETS
AND, WITH MRS. THATCHER, MEET THE PRESS OUTSIDE 11
DOWNING STREET. THERE WOULD BE ONE SUBSTANTIVE SPEECH
AT WESTMINSTER WHICH WOULD BE TELEVISED, AND THE FOCUS
SHOULD BE TO CAPTURE THE PEACE MOVEMENT, WHICH IS LARGE
AND MOVEABLE. A RESIDUAL IMPRESSION IN BRITAIN IS OF
THE PRESIDENT AS A COWBOY--IS THIS THE MAN THE BRITISH
CAN TRUST WITH THEIR FATE? THE PRESIDENT'S SPEECH SHOULD
BE JUST THE OPPOSITE OF THE KENNEDY BERLIN SPEECH: THAT
IS, IT SHOULD NOT BE HISTRIONIC. THE CORE OF WHAT THE
PRESIDENT SAYS SHOULD REFLECT QUIET CONFIDENCE, SATIS-
FACTION WITH THE 35 -YEARS OF PEACEMAKING OF NATO. WE
SHOULD NOT BE AFRAID OF THE COMMUNISTS, BECAUSE THEY
HAVE A FAILED IDEOLOGY AND A FAILED ECONOMIC SYSTEM, BUT
NE SHOULD ONLY MENTION THIS AND NOT DWELL ON IT. HE
SHOULD EMPHASIZE PLACE AND SHARED VALUES. MR. NAU ASKED
INTELLECTUAL STRUCTURE. HR. ARNOLD REPLIED THAT THAT
APPROACH IS VERY EUROPEAN--WHAT THEY LOVE--AND THAT THAT
IS IKE REASON THEY LIKED KISSINGER. MR. HEDGES INTER-
JECTED THAT THE IMAGE OF THE COWBOY HAD MORE POSITIVE
IRAN NEGATIVE CORN07ATIONS FOR THE FRENCH. WHILE IT
COULD BE THAT OF A SUN-SLINGING COWBOY, THE POSITIVE
IMAGE OF JOHN WAYNE OR THE PRESIDENT CRACKING JOKES AFTER
BEING SHOT PREVAILS IN FRANCE. .THE DIRECTOR SAID THAT TOE
PRESIDENT- 13 A MAN OF THE PEOPLE. WITHOUT INTELLECTUAL
PRETENSE, AND THAT THERE IS NOTHING MORE PERSUASIVE THAN
VINTAGE RONALD REAGAN. HR. NAU POINTED OUT THAT THE
PRESIDENT ALWAYS HAS PAD A STRONG PHILOSOPHICAL SENSE,
WHICH COULD BE INCLUDED NATURALLY IN HIS SPPECHES. TWO
PARTICIPANTS SAID IT WOULD BE NECESS9RY TO STAY AWAY
FROM PURELY AMERICAN CONTEXT NOT UNDERSTOOD IN EUROPE,
I.E., THE LOCKER ROOMS AT EUREKA COLLEGE.
44. THE DIRECTOR MENTIONED THAT IN THE U. S. ONE OF
THE PRBLIC IMAGE PROBLEMS OF THE PRESIDENT IS THE IMPRES-
SION THAT HE RAS ONLY RICH FRIENDS. HR. ARNOLD SAID THAT
THEY WERE TRYING TO COUNTERACT THIS IMPRESSION IN
-ACTIVITIES WITH MRS. REAGAN, BUT THAT SECURITY REASONS
MADE IT DIFFICULT TO DO VITO THE PRESIDENT. HR. NAU
POINTED OUT THAT SINCE THE PRESIDENT WAS RIDING VITH THE
QUEEN, BALANCE WAS NEEDED.
45. MR. TUCH SAID THAT, IN TERMS OF GERMANY, THE WHITE
MOUSE PRESS PEOPLE FIRST SHOULD CONCENTRATE O"OMMUNICA-
TING WITH THE EUROPEAN PRESS AND NOT GIVE THE WHITE ROUSE
PRESS THE USUAL PREFERENCE. AT LEAST THE EUROPEAN PRESS
SHOULD NOT BE DISCRIMINATED AGAINST IN BRIEFINGS AND POOL
ARRANGEMENTS. IN EUROPE THE BEST WAY TO COMMUNICATE WITH
EUROPEANS 13 THROUGH THEIR PRESS. SECOND, ON THE
SUBSTANTIVE LEVEL, THE U. S. IS SECOND 10 NONE IN THE
QUEST FOR WORLD PEACE, ECONOMIC SECURITY AND JUSTICE,
AND IN THAT EFFORT, WE INSIST ON BEING NUMEIR ONE. THE
PRESIDENT SHOULD TREAT IN SYMPATHETIC AND POSITIVE TERMS
THE HOPES AND FEARS OF THE CRITICAL YOUNGER GENERATION
OF GERMANS 10 GIVE THE LIE TO THE CANARD THAI THE U. S.
GIVES ONLY A MILITARY EMPHASIS WHILE THE SOVIETS ARE THE
DEARER OF PEACE. THE PRESIDENT SHOULD SUSTAIN AND GIVE
ENCOURAGEMENT TO THOSE ELEMENTS IN GERMANY WHICH ARE
SUPPORTIVE TO THE U. S. AND OUR GOALS, UNDERSCORING THE
SHARED PHILOSOPHICAL AND ETHICAL PRINCIPLES THAI FORM
THE FOUNDATION OF THE U. S.- GERMAN RELATIONSHIP, TO
CHAMPION MANKIND'S ASPIRATIONS FOR PEACE AND PROSPERITY.
U.' S. FOREIGN POLICY SEEKS TO ESTABLISH AN INTERNATIONAL
ORDER THAT ENCOMPASSES FREEDOM, AND 18 NOT AIMED ONLY
AGAINST AN ALIEN IDEOLOGY OR SOVIET IMPERIALISM.
46. DIRECTOR WICK SAID THAT THE PRESIDENT SHOULD CON-
CENTRATE ON THE POSITIVE. NEVERTHELESS, NO MATTER WHAT NE
DOES, THERE IS A GROWING WAVE OF OPINION WHICH WANTS A
FURTHER REDUCTION IN NUCLEAR WEAPONS BY THE U. S. EUGENE
ROSTOW OAS POINTED OUT THAT WE MUST ENSURE THAT WE NOT
REMAIN IN THE POSITION WHERE ANY NATION WITH A FIRST
STRIKE COULD DESTROY OUR MISSILES. THE DIRECTOR SAID
THAT HE CONSIDERED HIMSELF A HAWK, ALTHOUGH HE FOUND HIM-
SELF PERSUADED BY MUCH OF THIS TALK OF THE REDUNDANCY OF
DESTROYING THE RUSSIANS MANY TIMES OVER. WHEN WE GET TO
THE UNCLOUDED BOTTOM LINE, THE ISSUE IS SURVIVAL. MR. NAU
SAID THAT HIS SENSE WAS THAT THE VISIT TO BONN WOULD BE
THE TOUGHEST VISIT. THERE WOULD BE A DIFFERENCE IN WHAT
TOE PRESIDENT DOES AT THE NATO SUMMIT WHERE SPAIN JOINS,
AND WE EMPHASIZE SHARED VALUES AND THE VITALITY OF THE
17
?7453
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
 PAGE BI
832227 IC 672
17/L*'2S1
------ -----------------------------------------------------r-..
INTO OSO-04 /001 A6
................................................................
0 1711171 MAY t2 ZFF-1
FM AMINBASSY PARIS
10 USICA VASHDC NIACT IMMEDIATE 2461
17
S E C R E I SECTION E1 OF 11 PARIS 17493
USICA
DIRDIS
FOR DIRECTOR WICK PASS BALDYGA AND SCHNEIDER FROM HEDGES
ALLIANCE. WE MUST SHOW OUR DETERMINATION 10 MOVE AHEAD
ON THE STRATEGIC SIDE. THE DIFFICULTY IS 70 DIFFERENTIATE
BETWEEN THE ADDRESS AT THE BUNDESTAG AND WHAT GOES ON AT
NATO. IF WE ASSUME AN EASY ESCAPE BY DEFINING MANAGEMENT
OF WEAPONS AS BEING PEACE, THEN WE ALLOW A POTENTIAL
AGGRESSOR TO ESCAPE THE FEAR OF NUCLEAR WEAPONS. MR. ?UCH
INTLRJICIJD THAT IT WAS TERRIBLY DIFFICULT TO MANAGE
NUCLEAR WEAPONS BUT WE HAVE DEDICATED OURSELVES TO ARMS
NEGOTIATIONS AT GENEVA, THE STARLiALKS
ALTERNATIVES TO MMANING TNE NUCLEAR WEAPONS 'ISSUE WOULD
DE 10 TIE A CHAIN AROUND OUR NECKS AND LIE DOWN OR
ELSE TO RIDE THE NEUTRON BOMB DOWN WITH DR. STRANGELOVE.
DIRECTOR VICK STATED THAT IF WE PERMIT THE SOVIETS TO HAVE
A FIRST STRIKE CAPABILITY 70 RENDER OUR MISSILES USELESS,'
THEN WIIUWBVAO ULO BECOME LINE LZECNOSLOVANIA,
AFGHANI RMANY, WITH ALL THE FERMENT
AGAINST MISSILE DEPLOYMENT, POLLS SHOW THAT THE GERMANS
WOULD STILL RATHER FIGHT THAN BE EITHER RED-OR-DEAD.
N. ARNOLD STATED THAT IT WAS CRITICAL TO UNMAST THE
VERY JINILATERAL PEACE MOVEMENT WHICH WAS TOTALLY QUIET
WHEN THE SOVIETS WERE INSTALLING THE SS-20S. THEY ARE
ASKING FOR SLOW SITEP-1Y-STEP SURRENDER AND THEIR BLUFF
SHOULD BE CALLED:' DIRECTOR WICK SAID THAT PERHAPS THE
PRESIDENT COULD USE A CHART SHOVING SS-21 DEPLOYMENT; MR.
NAU POINTED OUT THAT NATO HAD ALREADY DONE THIS. THE
DIRECTOR SAID THAT THE CHART WOULD SHOW GRAPHIC SYMBOLS
TARGETING EVERY MAJOR WEST EUROPEAN CITY, THE IDEA BEING
THAT TILE UTILIZATION OF THESE WOULD RENDER ANY COUNTER-
FORCE TOTALLY INEFFECTIVE. THE PEACENIKS SAY THAT WITH
ALL THE MISSILES DEPLOYED IN THE LAST 35 YEARS, WHY ARE
MORE NEEDED? THE SIMPLE FACT 1S 4NAT IF THEY ARE UN-
AVAILABLE, THEN EUROPE IS AT THEIR MERCY, WHICH SEEMS
CRYSTAL CLEAR. MR. ARNOLD COMMENTED THAT THE PRESIDENT'S
SPEECH THEN WOULD BECOME TOTALLY DIFFERENT FROM WHAT HAD
BEEN DISCUSSED FOR TYE PREVIOUS THREE HOURS. TOE DIRECTOR
STATED THAT IF WE CAN'T ACHIEVE DEPLOYMENT OF THE CRUISE
AND PERSHING', THE PROBLEM OF SPLITTING THE U. S. AWAY FROM
EUROPE VILL APPEAR. .
17. MR. NOZNIAK POINTED OUT THAT PEACE DOES NOT EXIST
IN A VACUUM, OUT THAT WE LIVE IN THE REAL WORLD. MR.
ARNOLD SAID THAT THERE IS A PROBLEM OF CREDIBILITY ON THE
FIRST STRIKE ARGUMENTS, BECAUSE MANY CONSIDER THE SUB-
MARINES INVULNERABLE, AND THAT THE ARGUMENTS ARE VERY
COMPLICATED.
18. OR. ?UCH STATED THAT THE PROBLEM IS THAT WE ARE NOT
DEALING WITH A RATIONAL AUDIENCE; THAT THE PRESIDENT HAS
TO AM AL TO EMOTION WITH NATIONALITY. FIRST OF' ALL,
WE ARE NUMBER ONE IN PEACE,`IUT BEING RESPONSIBLE PEACE-
NiKS, WE NAVE TO DEAL VITN THE COMPLICATED ISSUES OF
VERIFICATION. WE NAVE TO MAKE THE GERMANS AWARE THAT WE
WILL DO EVERYTHING IN OUR POWER T01AKE RATIONAL STEPS
TOWARD DISARMAMENT. IN THE AUDIENCE ARE THOSE WHO BELIEVE
11 IS BETTER TO BE RED THAN DEAD, WHO ARE FOR UNILATERAL
DISARMAMENT, WHO HAVE LIVED ALL THEIR LIVES IN A FREE
SOCIETY AND DON'T KNOW WHAT IT IS LIKE 10 LIVE IN POLAND
OR CZECHOSLOVAKIA. THE PRESIDENT HAS 10 SAY THAT WE WILL
NOT NAVE A NUCLEAR HOLOCAUST, THAT WE WILL WORK TOWARD
A WORLD AT PEACE. MR. EISENSTADT POINTED OUT THAT MANAGE-
MENT OF PEACE is DIFFICULT FOR DEMOCRACIES BUT THAT WE
SHOULDN'T TAKE A NEGATIVE TACK. MR. GRADY SAID THAT WE
SHOULD NOT OIILY SAY ALL THESE THINGS, WE SHOULD ALSO SHOW
WE MEAN THEM; WE SHOULD POINT OUT THAT, IN FACT,
SERIOUS NEGOTIATIONS ARE TAKING PLACE. MR. NAU SAID THAT
THE GERMAN-VISIT WOULD BE THE-MOST DIFFICULT, SINCE-AN
IMAGE EXISTS OF THE PRESIDENT AS A COWBOY AND AS NOT A
PEACE-SEEKER. THREE THINGS TO CONSIDER ARE: THE
CONCEPTION THAT THE BALANCE HAS CHANGED OVER THE PAST 11
YEARS, THAT WE CAN'T HANDLE THE PROBLEMS, AND THAT THE
GERMANS NAVE. MEMBERS OF THEIR FAMILIES IN EASTERN EUROPE.
MANY GERMANS ARE READY TO ACCOMMODATE HUMAN CONTACTS
IN ALTERNATIVE SOCIETIES MUCH MORE THAN WE OR THE FRENCH
ARE. MR. NAU SAID THAT NE UNDERSTOOD THIS, ESPECIALLY
BECAUSE HIS FATHER HAD BEEN AN IMMIGRANT TO THE U. S. FROM
GERMANY AND THAT HE HIMSELF VISITS HIS RELATIVES IN
GERMANY. MANY GERMANS DO NOT THINK THAT ALL IS REPUGNANT
IN EASTERN EUROPE AND POINT OUT NOW MUCH PROGRESS HAS
BEEN MADE IN CERTAIN ASPECTS OF EAST GERMANY SOCIETY. THE
DIRECTOR AND MR. EISENSTADT SAID THAT WEST GERMANS WEREN'T
WILLING TO GO TO EAST GERMANY AND LIVE THERE AND THAT
THERE ARE NO EXAMPLES OF GERMANS CROSSING THE BERLIN WALL
FROM WEST TO EAST.
11. MR. TUCH SAID THAT THE PRESIDENT SHOULD ADDRESS THE
'HOPES AND FEARS OF THE YOUNG. AMBASSADOR ARTHUR BURNS
BT
87493
- } s
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0
SECRET i NC014 111 G
INTERNATIONAL T E L E G i AM
COMMUNICATION AGENCY
 Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0i NC? ? NG
INTERNATIONAL TELEGRAM
COMMUNICATION AGENCY
PAGE 81 032221 1CA673 93722/ ICA673
17/1!252
...............................................................
INFO OSO-01 /004 A6
0 1711172 MAY 12 IFF-/
FM AMEMBASSY PARIS
TO USICA WASHDC NIACI IMMEDIATE 2461
IT
S E C R E 1 SECTION 11 OF 11 PARIS 17113
UTICA
DIRDIS
NAS SAID RECENTLY THAT WE-'HAVE GOTTEN NOTHING OUT OF
DETENTE, THAT 11 HAS BEEN A NEGATIVE EXPERIENCE FOR THE
U. S., BUT WE RECOGNIZE THAT THE GERMANS HAVE BEEN ABLE
TO NAVE A CERTAIN EASING OF THE SITUATION AROUND BERLIN,
CERTAIN CONTACTS WITH FRIENDS AND RELATIVES IN THE EAST,
AND ARE INTERESTED IN MAKING THEIR LIVES EASIER.
MR. EISENSTADT STATED THAT IT IS TO OUR ADVANTAGE TO
ENCOURAGE EASTERN EUROPEAN VESTED INTERESTS IN HAVING
CONTACTS WITH THE WEST, AS IN HUNGARY. MR. TUCH SAID
WE NAVE TO RECOGNIZE WE NAVE DIFFERENT INTERESTS AND
DIFFERENT PERCEPTIONS OF THESE INTERESTS. THE WEST
GERMANS CAN VISIT, SEND PACKAGES, A MOTHER CAN COME FROM
EAST GERMANY AND LIVE IN INC VEST, AND ONE CAN'T SAY THAT
NOTHING HAS BEEN ACHIEVED. IT COULD BE EPHEMERAL, BUT
Al THIS POINT IT IS REAL. MR. SCHNEIDER SAAD THAT TO
PROTECT THE PEACE ONE HAS TO HAVE REALISTIC GOALS IN
MIND. MR. NAU SAID THE TASK IS DIFFICULT; WITH THEIR
EMPHASIS ON ARMS CONTROL MAYBE WE CAN MENTION DETENTE.
MR. TUCH DISAGREED AND SAID TO STAY AWAY FROM IT. MR.
MAU MUSED ABOUT NOV TO TOUCH THE UNDERLYING CURRENT IN
GERMANY, WHERE RELATIONS EXIST WITH THE EAST. NE WONDERED
NOV THIS ASPECT COULD BE TAPPED. MR. TUCH SAID THAT THE
PRESIDENT CAN SAY THAI. VE,UNDERSTAND THURRjONCERNS ABOUT
TIE WELFARE OF THEIR RELATIVES. DIRECTOeVICK ASKED IF -
THERE WERE ADDITIONAL COMMENTS.' MR,. -1NDERGRAST
MENTIONED AGAIN THE COMMENT BY SCHMIDT ON THE SERIOUS
ECONOMIC MALAISE AND CRISIS THAT THE WORLD IS GOING
THROUGH AND THAT THE ECONOMIC DIMENSION NEEDED A GREAT
DEAL OF EMPHASIS; BE THOUGH THAT ECONOMIC SECURITY AND
PROSPERITY ARE FAR MORE IMPORTANT THAN THE PREVIOUS
DISCUSSION HAD INDICATED.
U. MR. FERNANDEZ AGREED WITH PENDERGRAST'S POINT AND ITS
IMPACT ON YOUTH. ON THE ECONOMIC SIDE, WE MUST REMEMBER
NOV SERIOUS UNEMPLOYMENT IS AND CONSIDER A DANGER ALSO
THAT THE EUROPEANS VILL THINK THAT PUTTING THE U. S.
HOUSE IN ORDER VILL BE A PANACEA FOR THEIR PROBLIMS.
$1. MR. NAU REMARKED THAT THAT IS THE LINE THAT SECRETARY
REGAN NAS RECENTLY TAKEN--THAT THEIR OWN DOMESTIC POLICIES
AFFECT THEIR OWN INTEREST RATES, THAT THEIR -INTEREST
RATES MAY NOT FALL AS MUCH AS OURS AND THAT THE DOLLAR
WOULD STAY STRONG. NE SAID THAT THE DISCUSSION HAD BEEN
EXTRAORDINARILY HELPFUL TO HIM AND THAT NE WANTED TO
ENCOURAGE EVERYONE TO CONTINUE PRESENTING THEIR
IDEAS, AS THE JOB OF THE PRESIDENT'S COMMUNICATING NEEDS
MUCH MORE ATTENTION. IT IS HARD FOR US IN OUR FREE
SOCIETY TO 00 $0. ALL OF DS IN GOVERNMENT ARE FRUSTRATED
MST OF TIE TIME, BECAUSE VE DON'T FEEL THAT OUR INPUTS
ARE BEING CONSIDERED? RUT IT IS IMPORTANT FOR US'TO ?
CONTINUE MAKING TM ANDJOT TO GET DISCOURAGED. THE
DIRECTOR PRAISED NAU-FP NIS COMPETENCE AILD CREDIBIL-
ITY AND HIS PARTICIPATION IN THE MEETING. HEDGES
IT
$7433
Approved For Release 2008/06/24: CIA-RDP83M00914R002100110010-0