Foreign Relations of the United States, 1969–1976, Volume XXXVII, Energy Crisis, 1974–1980

42. Notes of a Meeting Between Secretary of State Kissinger and French President Giscard d’Estaing¹

Paris, February 19, 1975.

NOTES FOR THE SECRETARY—BREAKFAST MEETING WITH PRESIDENT GISCARD D’ESTAING

1. February 19 breakfast meeting included President Giscard d’Estaing, Foreign Minister Sauvagnargues, Secretary Kissinger and myself. Atmosphere was relaxed and friendly. A broad range of subjects was covered, with particular emphasis on the Middle East and energy.

[Omitted here is discussion unrelated to energy.]

6. Turning to the question of energy, the Secretary and the President agreed from their recent meetings with the Shah² that he presently is more cooperative than was the case last November. He was more worried about the West’s economy, and much less assured that all factors, including the pricing of oil, were under his control. The Secretary said that last November the Shah believed he was in complete control of the pricing situation. He is now less sure and may even be receptive to lowering prices. The President said the Shah was not even excited about the so-called “guaranteed price” now under discussion among the consumers. Secretary Kissinger explained that by “floor price” we mean a guaranteed price established below the current price. The producers, in order to protect themselves, might want to have long-term contracts which would include such a floor price. Americans and Europeans alike seem to be thinking in terms of $6.00 or $7.00 a barrel. Prices could be raised unilaterally by each country, but an agreement in principle among consumers not to go below the floor price should be reached in order to protect needed new investment. Chancellor Schmidt and Prime Minister Wilson seem to agree with this formula.

7. Replying to a question from the President, the Secretary said he had not thought through just how France could participate in guaranteed price procedures, but that this question should not present insurmountable problems.

8. The President noted that the French press had characterized Secretary Kissinger’s introduction of the floor price proposals³ as “confrontation” and as a repudiation of important aspects of the Martinique understanding. The Secretary replied that this obviously was not the case and by way of analogy pointed out that the U.S. press always attempted to portray events or statements as being confrontational. The Business Week article⁴ was also brought up by the President, who noted that the French had not reacted adversely. The Secretary expressed appreciation.

9. Returning to the Middle East, the President said there are credible reports that the U.S. is increasing its military strength in the area. The Secretary replied that we did have an additional aircraft carrier there and some other vessels. Responding to the President’s inquiry, he then outlined what he had meant in the Business Week article about the use of military force. The circumstances under which we would use force would have to be a massive onslaught on the economy of the West, and Europe would be very deeply affected. The US, of course, would not use military force without consultation. As of now, the Secretary could see no conceivable circumstances where the use of force would even be considered. Replying to the President’s inquiries, he stated that it would be feasible to carry out military action and that in such an event he did not believe the USSR would react seriously.

10. With regard to the proposed consumer/producer conference, it was agreed that an attempt should be made to keep participation as presently envisioned, at least for the first round, that the Yamani list of countries looked about right, and that the conference should be restricted to the energy problem. The President said that prestige was not an issue, as far as France is concerned, in the conference; rather what is desired are substantive results. He said the Shah seemed to think the Saudis had agreed with the U.S. line and would be a stalking horse for the United States. To this the Secretary replied that we have no understanding with the Saudis concerning the line to be pursued at the conference and that the United States would speak for itself.

11. Concerning the question of when the conference should be convened, the Secretary pointed out that some work remains to be done.

(a) Guaranteed Price. What is wanted is a general agreement in principle. There is no requirement that a price be fixed precisely. A general range ($6 to $7) could be used. It would seem that this requirement could be quickly met.

(b) A date. Secretary Kissinger suggested the date for the preparatory meeting be April 10, rather than the latter part of March, as he will be in the Middle East in late March and will need some time after his return to help prepare the U.S. position. The President replied that this would pose no problem. The date is not a matter of principle, but he would like to send the invitations as quickly as possible.

(c) Level. It was agreed that participation in the preparatory conference should be at a high expert level. Secretary Kissinger said the U.S. delegate would probably be the new Under Secretary for Economic Affairs, Mr. Robinson, although it possibly might be Mr. Enders. The President said that the French representative would probably be M. de Guiringaud and agreed that this was the proper level.

12. With regard to the IEA being a participant in the meeting, President Giscard did not think that this would be advisable. The EEC, OECD, OPEC would be represented and Davignon could be physically present but not as a representative of the IEA. Secretary Kissinger will discuss this in Washington and will inform the President or the Foreign Minister as to our decision next week.⁵

13. The President said that he had understood that Secretary Kissinger had suggested to the Irish Foreign Minister that the conference be held in Dublin. The Secretary replied that this was not the case, that he had not made any such suggestion but that something might have been said in jest. The meeting should be in Paris, with the French taking the chair at the beginning and thereafter the chairmanship should rotate.

[Omitted here is discussion unrelated to energy.]

1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL 140, Geopolitical File, France, February–March, 1975. Secret; Nodis. Drafted by Rush on February 19.
2. Kissinger met with the Shah in Zurich on February 18.
3. See footnote 4, Document 39.
4. See Document 30.
5. In a February 26 letter to Sauvagnargues, Kissinger wrote: “Now after careful examination of the question I wish to express to you my firm conviction that the IEA should be represented at the preparatory meeting. Such participation corresponds to the hopes we both have that the conference succeed. We both envision a serious conference to deal with issues of grave importance to the world economy. We will not be able to deal with these issues effectively if the oil consumer organization, the IEA, is not present. The OECD simply cannot fill this role. Although the OECD provides a framework for the IEA, it has not been the locus of consumer cooperation.” (Telegram 43054 to Paris, February 26; Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, Box 4, France—State Department Telegrams from SECSTATE–NODIS (2))