THE PRESIDENT'S DAILY BRIEF 12 JULY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014847
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: July 12, 1975

Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79f00936A012700010027-7
The President's Daily Brief
July 12, 1975
5
t 25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Exempt from general
declassification uhedule of E.O. 11652
exemption category, SBO ).(2).(3)
declassified on15% on approval of
the Director of Central Intelligence
lc ?
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
July 12, 1975
Table of Contents
UK: The Labor government can expect about a six-
month grace period for its program to cut in-
flation. (Page 1)
Portugal: The Socialist Party is waiting for the
ruling Armed Forces Movement's response to
the party's conditions for returning to the
government. The Revolutionary Council began
a nonstop meeting yesterday. (Page 3)
a_rae_nIiLia: President Peron's cabinet changes are
such that it will be difficult for her to con-
vince the opponents of Lopez Rega that he does
not retain a determining influence in the cab-
inet. (Page 5)
Notes: Apollo-Soyuz Project; Cyprus; Philippines-
USSR (Pages 6 and 7)
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-R6P79T00936A012700010027-7
FOR THE PRESIDENT ONLY
UNITED KINGDOM
Prime Minister Wilson Thursday an-
nounced the details of his program to cut
inflation from the current 40-percent an-
nual rate to 10 percent by next summer.
The new policy features a "voluntary"
ceiling on wage increases of $13.20 a
week--about 10 percent--with a wage freeze
for all workers earning more than $18,700
a year.
Nothing in the new policy will di-
rectly reduce Britain's rising unemploy-
ment. Indeed, if it becomes necessary to
enforce sanctions against employers, there
will be more, rather than less, unemployment.
Although formal union support for the program
is problematical, a union-wide confrontation with
the government probably can be avoided. The uni.ons
have achieved their major goal, at least for the time
being, of avoiding statutory limits on wage increases
and legal sanctions against unions that violate the
pay guidelines.
The weaker unions, faced with shrinking employ-
ment, will be willing to trade wage gains of uncer-
tain value for greater job security. Even if mili-
tant unions with strong market positions persist in
outsized wage demands, the new measures will stiffen
employer resistance.
Public opinion is ripe to support the govern-
ment's program. The sharp acceleration in wages and
prices since the first of the year has created wide-
spread feelings that firm government action is re-
quired. Even some unions have come to believe that
unemployment is wiping out the gains their members
have made in keeping wage increases ahead of price
boosts.
The Labor government can expect about a six-
month grace period for its new policy. Major wage
negotiations do not resume until October. By then,
much of the cost pressure built up by past increases
in wages, taxes, and depreciation of the pound will
probably have been translated into higher consumer
prices. Unions, employers, and the government all
realize that the new program will mean that prices
will rise faster than wages for a while at least.
(continued)
1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
By early next year, however, unemployment prob-
ably will have risen to about 6 percent--the high-
est in 35 years--and inflation, while moderated,
still will exceed an annual rate of 10 percent. In
these circumstances, public support for the govern-
ment's policy will erode and the unions are apt to
increase pressures to loosen controls and stimulate
the economy If Wilson gives in too hastily to
avoid a confrontation with labor, he will risk los-
ing whatever gains have been made in controlling in-
flation.
2
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
PORTUGAL
The Portuguese Socialist Party ap-
pears to be waiting to see if the ruling
Armed Forces Movement will respond to
the party's conditions for returning to
the government before moving toward open
opposition. The Revolutionary Council
began a meeting yesterday that continued
into the night.
At a press conference last night, Socialist
leader Soares made no calls for mass demonstrations,
but pointed to Portugal's serious economic condition
and its need for assistance from Western Europe.
Soares noted that the Socialists' withdrawal from
the government would not affect the party's role in
the constituent assembly, which has a clear mandate
from the people. The Communist Party, however, has
reportedly served warning that it may withdraw from
the assembly if the moderates continue to smother
debate on "fundamental questions of the revolution-
ary process."
the Socialists believe
their withdrawal from the government will
strengthen their bargaining position. This is based
on the assumption that military leaders who have
visited other European countries have been convinced
that suppression of the Socialists or the Popular
Democratic Party would eliminate the possibility of
obtaining much needed economic assistance from West-
ern Europe.
25X1
25X1
the Popular Demo- 25X1
crats plan to withdraw from the government, but 25X1
will delay their move in order to avoid charges of
collusion 25X1
A delegation of Popular Democratic
leaders met with President Costa Gomes yesterday
and will now wait until Monday for the Revolutionary
Council to respond to the party's conditions for
staying in the government.
(continued)
3
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
Sources close to Prime Minister Goncalves are
quoted in the press as saying that if the Popular
Democrats withdraw, leaving only the Communists and
their sympathizers in the Popular Democratic Move-
ment in the coalition with the military, Goncalves
could no longer continue. In fact, any reorganiza-
tion of the government as a result of the Socialists'
withdrawal is likely to be used by Goncalves' oppo-
nents in the military to renew their efforts to oust
him.
Soares will have difficulty controlling militant
members of his party if he elects to hold to a soft
line in the hope that he can get the military to re-
verse their decisions on Republica and the formation
of popular assemblies. The Socialist Party
plans to move to a policy of direct opposi-
tion with strikes and mass demonstrations. So far,
Soares has refused to allow the plans to be imple-
mented.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RbP79T60936A012700010027-7
FOR THE PRESIDENT ONLY
ARGENTINA
President Peron yesterday yielded to
strong pressure from the military, poli-
ticians, and labor and removed her con-
troversial adviser, Lopez Rega, from his
posts as welfare minister and presiden-
tial private secretary. She failed to
strengthen her position substantially,
however, because she filled the vacated
posts with men close to the former min-
ister.
Taking over the welfare portfolio is a former
private secretary to Lopez Rega, and more recently
the number-two official of the ministry. The pres-
ident's new private secretary has until now held
a post within the office of the presidency, where
he reportedly was one of Lopez Rega's close asso-
ciates.
The president has retained Economy Minister
Rodrigo, a protege of Lopez Rega and the target of
bitter criticism for his attempts to implement
austerity measures. Several other cabinet officers
who remain in office are said to be linked to the
ousted minister.
It will be difficult, if not impossible, for
the president to convince the opponents of Lopez
Rega that he does not in fact retain a determining
influence on her and the cabinet. Pressure for
more changes and possibly for the exile of Lopez
Rega are likely.
5
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
NOTES
Preparations for the Soviet portion of the
Apollo-Soyuz Project seem to be proceeding smoothly.
Seven ships in the Pacific and four in the
Atlantic are in position for the Tuesday launch.
Tensions on Cyprus are -likely to increase next
week when the two ethnic communities stage mass dem-
onstrations to mark the first anniversary of the
July 15 coup against Makarios and the Turkish inva-
sion of July 20.
Officials on both sides intend to take pre-
cautions to avoid major violence, but some disturb-
ances are likely, and these could escalate into seri-
ous incidents. US officials in Nicosia have already
been informed that a demonstration will take place
in front of the embassy. More than the usual number
of firing incidents along the cease-fire line are
probable during the coming week, but neither side
appears to be considering any major military ac-
tivity. Both sides, however, will probably place
their forces on alert as a precaution. Turkish
Cypriot forces are already on a low-level alert.
(continued)
6
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
FOR THE PRESIDENT ONLY
Philippine President Marcos has decided to
follow up his successful diplomatic mission to
China with a trip to the USSR in late August.
Marcos
wants to move quickly on establishing diplomatic
ties with the Soviet Union and concluding a trade
agreement. He said some time ago that recognition
of the Soviet Union and China would be virtually
simultaneous, and the Soviets reportedly have been
pressing him to keep to this announced timetable.
Most of the preliminary discussions for diplomatic
ties with Moscow were completed over a year ago,
but Marcos delayed taking the final step until he
had things wrapped up with Peking.
7
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012700010027-7