THE PRESIDENT'S DAILY BRIEF 18 JULY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993878
• 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 18, 1973

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The President's Daily Brief
18 .1;4 1973
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Exempt from general
declassification scheduk of E.O. 11652
exemption category 513(15.12).1.31
declassified only on approval of
the Director of Central Intelligence
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THE PRESIDENT'S DAILY BRIEF
18 July 1973
PRINCIPAL DEVELOPMENTS
On Page 1 we discuss the deteriorating military
situation in Cambodia.
The EC Commission is considering contingency plans
in case the monetary situation continues to erode,
but it is powerless to act as long as member coun-
tries remain divided on basic issues. (Page 2)
The French have reversed their previous opposition
to dealing with defense issues in a forum that is
community-related, but separate from NATO. (Page 3)
Libyan President Qadhafi, badly stung by differences
with the Egyptians over the proposed merger, is
sponsoring a "march on Cairo" to demand his own
formula for union, (Page 4)
The new leader in Afghanistan is unlikely to make
any major shifts in present policies, but there
could be changes in emphasis. (Page 5)
Peron's efforts to form a national unity government
in Argentina are stirring up opposition among.lead-
ers of the Peronist left, who fear a shift to the
right. Peron's strategy is likely to combine do-
mestic policies designed to attract moderates with
an "anti-imperialist" foreign policy. (Page 6)
A note on East Germany - Berlin also appears on
Page 7.
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CAMBODIA
Since late May, the Khmer Communists have shifted
their attacks from isolated provincial capitals and
distant stretches of key highways to the Phnom Penh
area. According to the latest estimate of the US de-
fense attache, 57 enemy battalions totaling 17,000
men are now located within a 25-mile radius of the
capital.
The bulk of these units are concentrated south
and southwest of Phnom Penh, but sizable forces are
also operating north and northwest of the city. De-
spite continued heavy air strikes, the insurgents
have gained ground against numerically superior gov-
ernment defenders, increasing the flow of refugees
toward the capital.
Barring major manpower and supply problems
or unusually early flooding during the
present rainy season, the insurgents in
the Phnom Penh area should be able to sus-
tain their attacks for the next few weeks.
Prospects for any dramatic improvement in
the Cambodian Army's performance are bleak.
It is beset by poor leadership and by
slackening morale. The recent steady
fighting has severely sapped government
strength and only intense US air support
has limited insurgent gains. Few units
remain in the capital's general reserve,
and each new threat prompts a complex jug-
gling of units from less active fronts.
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EC-MONETARY
The EC Commission is considering contingency
plans in case the monetary situation deteriorates
further. Among the plans being examined, one calls
for stronger capital controls within the EC, and
another for US-EC cooperation to reduce surplus dol-
lars held outside the US.
Should the European joint float collapse, the
Commission would consider calling an EC summit meet-
ing to discuss major steps toward European economic
and monetary union.
The Commission apparently is under strong
pressure to show some community-level re-
sponse to recent events, but it is power-
less to act as long as member countries
remain divided on basic issues.
Some additional tightening of capital con-
trols is possible, but the community has
not found a set of workable measures on
which it can agree. Moreover, additional
controls would run counter to one of the
main purposes of monetary union, the free
movement of capital within the EC.
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FRANCE-EC
? A French Foreign Ministry official has suggested
that the political directors of the EC foreign minis-
tries could begin discussing defense issues as part
of their overall work program. He contended that
such talks could be kept separate from talks on mil-
itary matters in the Eurogroup of NATO.
Heretofore, the French have opposed such
discussion. Their new willingness to
deal with defense issues in a forum that
is community-related, but separate from
NATO, is another sign that Paris is ac-
tively reviewing its position on intra-
European issues--particularly those af-
fecting relations with the superpowers.
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LIBYA
President Qadhafi, deeply frustrated by the
negative Egyptian attitude toward his concept of
union and the cultural revolution, apparently hopes
to counter with a dramatic show of popular support
for his position. Several thousand Libyans report-
edly are to depart for Egypt today in a motorcade
scheduled to arrive in Cairo on July 23--the anni-
versary of the Egyptian revolution. The demonstra-
tors intend to present President Sadat with a charter
charging him to establish a "complete" union based
on "popular" and Islamic principles.
Qadhafi presumably hopes that the rally
will force Sadat to abandon his gradualist
approach to merger. The march, however,
is likely to run into difficulties before
it ever reaches Cairo. The logistical
problems of transporting the demonstrators
across the Libyan desert will be formidable,
and the march could run into trouble when
it reaches the Egyptian border.
Should the cavalcade
ever reach its destination, it could prove
very embarrassing to President Sadat.
Whatever its impact on the Egyptians, the march
is certain to contribute to turmoil in Libya. Qa-
dhafi's prolonged absence from Tripoli--he is now
in Benghazi--has caused a serious leadership vacuum.
Qadhafi apparently is not yet ready to
put his own house in order, nor is he
willing to moderate his position on union,
despite considerable pressure from the
Revolutionary Command Council and President
Sadat. His decision to sponsor the march
clearly indicates that he is willing to
place his prestige and perhaps his leader-
ship on the line.
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AFGHANISTAN
Former prime minister Daud appears to be in con-
trol in Kabul, although the situation in the rest of
the country is still unclear.
Judging by Daud's performance during his ten
years as prime minister--1953 to 1963--he will make
no major shifts in Afghan policies, but there could
be changes in emphasis.
Some regard him as a Soviet stooge
Daud is, in fact, probably more re-
sponsible for the present close relation-
ship to Moscow than any other Afghan, but
he is likely to retain Afghanistan's tra-
ditional policy of trying to play the
great powers against each other.
In Pakistan, Daud is remembered as a long-
time advocate of independence for the coun-
try's two frontier provinces, whose inhab-
itants are closely related to the Afghans.
Independence for Pushtunistan is the only
specific foreign policy issue the new gov-
ernment has mentioned publicly, and rela-
tions with Pakistan could deteriorate.
For the US, Daud may be harder to deal
with than the previous prime minister or
the King. He is likely to be more suspi-
cious of US motives, generally less coop-
erative, and somewhat more pro-Soviet.
Nevertheless, there is no reason to think
he will reverse present Afghan foreign
policies.
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ARGENTINA
Preparations are under way to install Juan Peron
in the presidency, and a date should be set shortly
for elections--August 26 has been mentioned most fre-
quently. Efforts are continuing to establish an
electoral alliance between the Peronists and the
middle-of-the-road Radical Party by bringing Radical
leader Ricardo Balbin onto the ticket as Peron's
vice presidential candidate.
It is doubtful that Peron will face any
significant opposition, although an attempt
might be made to organize a leftist elec-
toral front.
The Peron-Balbin alliance could run into oppo-
sition from Peronists who fear that Peron, who is
77 years old and has several health problems, will
not live out a full term. More important, leaders
of the Peronist left are concerned that the proposed
alliance, which has the blessing of the military,
signals a shift to the right.
To contain this rising opposition, Peron
appears to be trying to isolate the extrem-
ists while attracting a broad spectrum of
political moderates into his government
of "national unity." This tactic is likely
to include a tough Zine against extremists
and terrorists, combined with moderate
economic policies. To maintain the sup-
port of the moderate and nationalistic
left, Peron will probably emphasize an
anti-imperialist" foreign policy and
make a concerted drive for "Third World"
leadership.
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NOTES
East Germany - Berlin: The East Germans have
reversed themselves and are again issuing entry per-
mits for West Berliners who wish to visit between
July 28 and August 5. Earlier, they had sought to
restrict the entry of West Berliners severely for
fear that the Soviet-sponsored World Youth Festival
would be disrupted by uninvited hecklers. A combina-
tion of bad publicity, informal Western protests to
the Soviets, and perhaps a touch of Soviet pressure
seem to have caused the East Germans to change their
minds.
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