THE PRESIDENT'S DAILY BRIEF 10 MAY 1971

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005992655
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 10, 1971

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The President's Daily Brief
10 May 1971
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
10 May 1971
PRINCIPAL DEVELOPMENTS
There is still no progress on the problem of repa-
triating diplomatic personnel from Calcutta and
Dacca. (Page 1)
Results of the Brussels meeting on the monetary
situation are assessed on Page 2.
Paris has promised to propose a solution to the
problem of London's contribution to the EC budget
at today's ministerial session. (Page 4)
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INDIA-PAKISTAN
There has been no progress since the first of
the month on the problem of repatriating diplomatic
personnel from Calcutta and Dacca. Pakistan insists
that its specially assigned representative in Cal-
cutta be allowed individual interviews with those
members of the staff of Pakistan's Deputy High Com-
mission who have opted for Bangla Desh. Indian of-
ficials, however, claim they have no. power to force
the disaffected Pakistanis to meet one-by-one with
Islamabad's representative. Until such interviews
take place, the Pakistanis refuse to schedule the
reciprocal exchange of personnel.
New Delhi alleges that Sen Gupta, its deputy
high commissioner in Dacca, and his staff are still
being subjected to severe restrictions on movement
and communication and that some of the staff may now
be running out of food. Consul General Blood tried
Saturday to call on Sen Gupta, but was turned away
by.a Pakistan Army officer. The officer said he
had orders not to allow the Indian diplomat to leave
his. residence-.
The two countries thus continue to behave
toward each other with accustomed irasci-
bility. Relations between them may soon
become even more strained over the massive
influx of East Pakistani refugees into In-
dia.
This problem may be aired today in the UN
Economic and Social Council (ECOSOC) if
India obtains permission to speak on the
situation in East! Pakistan. Islamabad is
expected to insist that the issue is an
internal matter, not subject to debate
before ECOSOC or any other, international
body. The Indians plan to charge the
government of Pakistan with committing
"atrocities and barbarities" that have
resulted in massive numbers of refugees
fleeing across the border of East Pakistan
into neighboring Indian states. According
to a senior Indian official, the Indian
representative will also demand that a way
be found to relieve the East Pakistanis
from the "oppression" they currently suf-
fer. The same official claims that a
"conservative" estimate of the number of
refugees presently in India is 1.8 million
and that the influx continues at a rate of
50-60,000 a day.
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INTERNATIONAL MONETARY SITUATION
At the Brussels meeting yesterday, the Germans
initially proposed that all European Community cur-
rencies be permitted to float in relation to the dol-
lar, and offered monetary support to keep them within
agreed margins. Although this would have been a step
toward monetary union, the other members--France and
Italy in particular--were not prepared to go, this far
and the proposal was rejected.
The compromise that was finally worked out will
permit only Bonn to allow the mark to float, appar-
ently within limits and for an unspecified period of
time. At a press conference last night, Economics
Minister. Schiller said it remains his government's
"present aim" to return eventually to the prefloat
rate of exchange.
Of the four other countries that joined West
Germany last week in discontinuing official trading
in dollars, only the Netherlands is again following
the German lead in allowing its currency to float
against the dollar. Switzerland and Austria have
revalued their currencies outright, and Belgium evi-
dently intends to rely on its dual exchange rate
system. The French and Italians have announced their
intention to maintain their present parities.
The stopgap of floating rates will have to
be supplemented by additional measures.
Floating of the mark will be accompanied
by a renewal of domestic controls on the
inflow of foreign funds into Germany. It
may be difficult for the community to
agree on how to control capital movements
and to regulate the Eurodollar market.
If the float of the mark is held to about
2.5 percent on either side of parity in
order to limit the adverse effects on the
Common Agricultural Policy, speculators
may still believe that the mark is under-
valued. On the other hand, a wider f7,22c-
tuation would cause measures to be taken
to compensate the German farmer, who will
receive less as the mark floats upward.
Bonn nevertheless has agreed not to take
unilateral measures to help its farmers
pending an attempt by the ministers to
find a community solution at a meeting
tomorrow.
(continued)
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French Finance Minister Giscard d'Estaing
has publicly acknowledged that the meas-
ures approved yesterday will make it im-
possible for the Six to narrow their ex-
change rate margins on 15 June as they
had intended to do in keeping with the
projected plan for monetary union.
Whether the delay will be a prolonged one
will obviously depend on how the money
markets respond to the various stabiliza-
tion measures.
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EC-UK
At.a meeting of the EC ministers todayt:Paris
has promised to propose a solution to the problem
of Britain's contribution to the community budget
which may open a drive to settle by summer the main
issues involved in London's bid for Common Market,
membership.
The negotiations have been deadlocked on
this issue since last December, and if
France's proposal is approved by the other
five members, it will be considered when
they meet with the UK tomorrow and Wednes-
day. The French proposal on financing
will apparently be a'formula rather than
a precise figure. The fact that Paris is
taking the initiative marks a change from
its earlier position which left the next
move up to London.
The problems of continued access to an enlarged
community for New Zealand dairy products and Common-
wealth sugar will also be discussed at the EC-UK
meeting.
Following a talk with President Pompidou
last week, New Zealand Prime Minister
Nolyoake confirmed that Paris may also
suggest that the dairy and sugar problems
simply be set aside until after British
entry, with the understanding that they
then would be dealt with fairly.
It is doubtful that any of these issues
can be settled in a two-day meeting--the
Six had already agreed with the British
in March that an additional session coul4
be held later this month. The other EC
members, however, have strongly urged
Paris to be more forthcoming, and its
new proposal on financing may be a sign
of increased flexibility.
Over the weekend Prime Minister Heath reversed
his previous position and announced that he will
discuss the accession issue when he meets with Pres-
ident Pompidou in Paris on 20-21 May.
(continued)
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It has long been speculated that at such
a meeting Pompidou might seek to extract
concessions from Heath in return for en-
try, but the international monetary crisis
of the past week--in which German economic
pre-eminence was once more apparent--may
have made Britain's accession seem politi-
cally more desirable to Paris than before.
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