THE PRESIDENT'S DAILY BRIEF 15 FEBRUARY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993745
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 15, 1973

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011500010041-4
The President's Daily Brief
15 February 1973
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Exempt from general
declassification uhedule of E.O. 11652
exemption category 5B( I
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
15 February 1973
PRINCIPAL DEVELOPMENTS
Tokyo allowed the yen to float sharply upward, but
the dollar weakened against European currencies in
early, trading today. (Page 1)
The North Vietnamese appear to be flying into the
South near Khe Sanh, apparently to pick up released
Communist prisoners, while in the North they con-
tinue to expand their oil pipeline system. Mean-
while, the South Vietnamese are considering strategy
for talks with the Viet Cong. (Page 2)
Cambodia)
/ (Page 3)
\West Germany(
/tPage 4)
As the first round of the French National Assembly
elections approaches, long-standing strains within
the governing coalition are worsening. (Page ? 5)
Campaign issues in Ireland's general election,
scheduled for 28 February', are beginning to take
shape,. (Page 6)
At Annex, we examine the various possible outcomes
of the French elections and their implications for
the. conduct of French foreign policy.
FOR THE PRESIDENT ONLY
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INTERNATIONAL MONETARY DEVELOPMENTS
The effective revaluation of the yen in early
trading today was about 13.5 percent relative to
the pre-devaluation market rate for the dollar.
The Central Bank of Japan reportedly was permitting
the yen to move with relative freedom in order to
dampen foreign criticism, although the bank purchased
some $75 million to guide the float. Yesterday,
the bank reportedly purchased some $233 million,
an unusually large intervention. Currency traders
apparently ,believe the yen eventually will be re-
valued by at least 15 percent, and possibly as much
as 20 percent relative to the dollar.
Trading was unsettled at the opening of Euro-
pean markets today, with the dollar under attack.
The mark and Swiss franc showed strong early gains,
as traders apparently were still unsure of the dura-
bility of this week's currency settlement. Yester-
day's sharp retreat on Wall Street may also have
been a factor. Trading yesterday on European mar-
kets was extremely cautious. At the markets' open-
ing, the dollar was near to its ceiling against
most fixed currencies, but it declined somewhat
during the day.
? Meanwhile, the price of gold spurted to a
postwar European high of $72.30 yesterday in Lon-
don. The interest in gold buying was worldwide,
and included purchasers from the Middle East who
generally make speculative purchases only in antici-
pation of higher prices.
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Developments in Communist Logistics
1?0' 108
104 I
V ,NAM
?N'irh
inh
etroleum pipeline
Gulf of Tonkin
-.4 "
K:)MZ
cl3.?ang Tri
Hue
CHINA
?22-
South China Sea
?18 -
?14 -
--io-
a
554140 2-73
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VIETNAM
North Vietnamese transport planes appear to
be flying into northern South Vietnam to an air-
field near Khe Sanh, perhaps to pick up released
Communist prisoners. A North Vietnamese message
from the Khe Sanh area stated "there will be a
post to exchange prisoners of war at the airfield."
A North Vietnamese unit is surveying the area for
a suitable radar site, suggesting that the North
Vietnamese intend to continue flights there long
after the prisoners are exchanged.
the petroleum
pipeline system in North Vietnam is being expanded.
About 80 miles of new construction has been noted
between Ninh Binh and Vinh, and a new pipeline is
being built into China from the border. In addi-
tion, the North Vietnamese have also extended the
existing pipeline in southern Laos 50 miles south
from Muong Nong.
The new pipelines in North Vietnam may be
steps toward a system that ultimately
will allow Hanoi to import and ship more
than one type of fueZ. The extension in
Laos will make trucks now being used to
haul gasoline down to the Ho Chi Minh
trail available for other duties.
South Vietnamese Prime Minister Khiem has ap-
pointed a cabinet-level task force to study strat-
egy for the bilateral political talks with the
Viet Cong.
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CAMBOD IA
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WEST GERMANY
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FRANCE
The first round of the National Assembly elec-
tions are now less than three weeks away and the
long-standing strains within the governing coali-
tion are being exacerbated by the prospect of sig-
nificant electoral losses. For example, Giscard
d'Estaing, leader of the Independent Republican
Party, is strongly critical of President Pompidou
for mismanaging the campaign, primarily by neglect.
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4t Annex, we examine the various possible
outcomes of the election and their impli-
cations for the Conduct of French foreign
polic.
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IRELAND
Campaign issues for the, general election on 28
February are just beginning to take shape.
The government is most vul-
nerable to charges that its policies have resulted
in excessive unemployment and inflation, but the op-
position has not yet exploited this weakness.
Under Ireland's complex system of propor-
tional representation, small vote shifts
in a few critical districts could have ma-
jor consequences, and the final outcome
of the election may hinge on local con-
tests between strong opposition candidates
and colorless Fianna Fail incumbents.
Prime Minister Lynch will have to campaign
hard if his own strong popularity is to
rub off on his weaker Fianna Fail col-
leagues.
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NOTES
Uruguay: The appointment of a former military
judge to head the Ministry of Interior, which con-
trols the nation's internal security forces, has
strengthened the military's ability to deal with
corruption and the economic problems that led to
its confrontation with President Bordaberry. With
this gain in power, ?the military has allowed one
of Bordaberry's closest advisers to become minister
of defense. He may have been chosen to help fore-
stall any civilian-military conflict in the new
National Security Council. Another blow up between
the generals and the civilian politicians could well
lead to the ouster of Bordaberry.
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FOR THE PRESIDENT ONLY
THE IMPLICATIONS OF THE FRENCH ELECTIONS
Whatever the outcome of the French elections on
4 and 11 March, it is certain over time to have some
effect on the future French role in Europe and in
the Atlantic Alliance. The Gaullist Party, the
largest component of the governing coalition and the
largest single party in the Assembly, seems due for
some losses, though perhaps not as serious as recent
polls would suggest.
We think, after the dust has settled, President
Pompidou will be faced with one of four basic polit-
ical situations. These, and their implications for
French foreign policy, are described below.
1. The present coalition parties could emerge
with a reduced but working majority in the Assembly.
--Because the Independent Republicans may well
gain seats at the same time the Gaullists suf-
fer losses, Independent Republican leader Val-
ery Giscard d'Estaing would have a greater
voice in government.
--A more even division of power between the
Gaullists and the Independent Republicans would
not, of course, bring major changes. It would
however, dilute the present strong Gaullist
coloration of the government.
--Giscard and his party hold slightly more
favorable attitudes toward the European Com-
munities and the Atlantic Alliance than the
Gaullists, as well as less strident positions
on the Middle East, Vietnam, and other aspects
of foreign policy.
--If the Gaullists suffer heavy losses, the
president could even offer Giscard the prime
ministry. This would give Giscard a better
shot at the presidency in 1976.
2. Secondly, the governing coalition could
lose enough seats to force it to take in some ele-
ments now in the opposition center.
--The president would be likely to seek a new
prime minister and bring the center parties
into his cabinet.
(continued)
Al
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--The immediate impact on government policies
would not be profound but, over time, the in-
fluence of moderate political leaders could
have a favorable effect on Franco-US relations.
--A. government so composed would be more coop-
erative within the Atlantic Alliance, take a
less intransigent stand on many aspects of the
European Communities' relations with the US,
and perhaps eventually take a more positive
line on the Middle East, and other foreign pol-
icy issues.
3. In the third situation, less likely than
the preceding two, the government's losses could be
so extensive that it would have to rally the right
wing of the Socialist Party as well as most of the
centrists to form a majority.
--Edgar Faure, now minister of state for social
affairs and leader of the left wing of the
Gaullist movement, might under these circum-
stances be asked to form a new government.
--Such a government would probably increase
the stress on France's independence of the US
and its "special relationship" with the USSR.
4. Finally, the Communist-Socialist alliance
could win a clear majority in the Assembly--the
least likely of the four possibilities.
--Pompidou would have a wide range of consti-
tutional options to keep the left at bay, and
there is little prospect that the old predomi-
nance of parliament could be revived.
--The Assembly could refuse to pass desired
legislation, but this assumes unity of views
among disparate leftist elements. In any
event, the government can often get along
without the Assembly's concurrence.
--The president's most likely move would be to
name a minority government and challenge the
left to overthrow it by censure. Present rules
make censure a difficult procedure.
--Nonetheless, prolonged hostility between
president and parliament would test the insti-
tutions of the Fifth Republic, and the fallout
would surely weaken the government's conduct
of foreign relations.
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