141. Backchannel Message From the Under Secretary of the Treasury for Monetary Affairs (Yeo) to Secretary of State Kissinger and Secretary of the Treasury Simon1

  • Subject: Deputies Meeting—Organization Specifics.
Pierre Brossolette is objecting to holding the meeting scheduled for Monday and Tuesday of next week2 in Washington. He argues that it would be more convenient and equitable to hold these meetings in [Page 506] Europe. Hormats has been contacted re this matter and I understand is in the process of straightening it out with Pierre Brossolette.3 No one else in the group is very concerned about this.
Concern on the part of the French, German and English regarding the planned meeting of the four countries represented here plus Japan for Monday. The concern expressed by them centers on the improbability of keeping such a meeting quiet relative to the Italians and the Canadians and the injured feelings that could result. There are three possible solutions: (a) Confine the Monday meeting to a representative from each of the five countries. This would have a greater probability of being kept quiet; (b) Have three representatives from each of the seven countries at Monday’s meeting; and (c) Have one representative each from the five countries meet Monday morning; have a large meeting of three participants from each of the seven countries late Monday afternoon.
Poehl made a strong bid for the Chancellor handling the economic issue at the summit. Giscard, according to de Larosiere, would like to handle North/South issues. While all of this is for later meetings, I indicated to Poehl that it was my understanding that President Ford wished to handle the economic subject and I suggested to de Larosiere that this was not the appropriate time or group to attempt to settle on matters of this sort. Nonetheless, it was recorded that the Italians handled relations with the socialist countries at Rambouillet and the Japanese had international trade.
Concern was expressed regarding the ability to keep the pre-summit dinner of the four quiet. I explained that this would be covered by the people who were working on the scheduling and organizational aspects of the meeting.

After a general discussion, we moved into a review of the agenda on a subject-by-subject basis. What follows is a first draft of the economic section of the communiqué. This beginning effort was useful because it revealed a surprising degree of unanimity re the points to be covered in the economic section of the communiqué. For example, the French were totally willing to accept an objective of eliminating inflation and if anything were as tough as the Germans. The English predictably held out for a specific reference to unemployment and the need to reduce it but all agreed that recovery was stronger than had been [Page 507] anticipated; all agreed that sustained expansion was the objective and the principal threat to achievement of the objective is inflation.

Paragraph following is the economic section of the communiqué as proposed by the Deputies group: “The objective before us is to fashion, each in our individual ways, policies that will provide the foundation for a period of steady and sustained economic growth. Fears about the economic and financial outlook have been replaced by hope and a rebirth of confidence in the future. Our earlier meeting at Rambouillet established economic recovery as a primary goal and identified underlying economic and financial conditions as the sources of the stability we desire. Out of Rambouillet have come a highly developed spirit of cooperation and mechanisms for consultation which have proven invaluable.

“A strong and balanced economic recovery is underway. Before us is a transition from recovery to expansion and further progress in reducing unemployment. This will require that investment in the tools that men and women work with, the plants and factories and other infrastructure of our modern economies, must be forthcoming.

“Most importantly, one fact, a legacy from the early years of this decade, must be stated unequivocally: sustained economic expansion and the resultant increase in individual well-being cannot be achieved in the context of high rates of inflation. In order to accomplish our stated objective of deliberate, orderly and sustained expansion, we must and do commit ourselves to a companion goal—the elimination of inflation.” Section II of this message to follow later.

  1. Source: Ford Library, National Security Adviser, KissingerScowcroft West Wing Office Files, Box 11, Economic Summit Conference, 6/76, Items AA–DD. Top Secret; Immediate. Also sent to Scowcroft, Seidman, Hormats, Sonnenfeldt, and Greenspan.
  2. Monday, June 14, and Tuesday, June 15.
  3. In a June 9 message to Scowcroft, Brossolette suggested that the pre-summit experts meeting should take place in Europe, ideally Paris. In a June 10 message to Brossolette, Scowcroft explained why the meeting would have to be in Washington and expressed the “hope that your officials will join us for the preparatory meetings in Washington.” (Ford Library, National Security Adviser, KissingerScowcroft West Wing Office Files, Box 11, Economic Summit Conference, 6/76, Items AA–DD)