128. Minutes of a National Security Council Review Group Meeting1
SUBJECT
- U.S. Policy Toward Post-De Gaulle France;
- U.S. Policy Toward Peru
PARTICIPATION
- Chairman—Henry A. Kissinger
- State
- Arthur Hartman
- Donald McHenry
- Charles Meyer (Peru only)
- Charles Tanguy (France only)
- Defense
- G. Warren Nutter
- CIA
- R. Jack Smith
- JCS
- Lt. Gen. F. T. Unger
- OEP
- Haakon Lindjord
- USIA
- Henry Loomis
- Treasury
- Anthony Jurich
- NSC Staff
- Helmut Sonnenfeldt (France only)
- Viron Vaky (Peru only)
- Arnold Nachmanoff (Peru only)
- Morton Halperin
- Winston Lord
SUMMARY OF RESULTS
France
The paper was considered good and will be forwarded, with some minor changes, to the President.2 The Volcker Committee will send over, within the next week or so, some policy options for short-term monetary problems in France. There will also be further consideration of broader monetary questions. NSSM 47, U.S. Military Relations with France,3 will be broadened to include political and monetary issues,4 with the target date for submission remaining August 1, on the understanding that this could slip if there is a major political realignment in France.
[Omitted here is a summary of the Peru discussion.]
FRANCE5
Kissinger noted that the President has requested a paper on the short-term problems in our French policy caused by the de Gaulle resignation. He believed this State paper was very good. As previously agreed, it did not include a discussion of the monetary issues.
Hartman expressed State’s concern with the monetary area as the one most likely to require action. He did not believe that the Volcker group was addressing the specific French situation over the coming months. Kissinger added that Richardson had expressed this concern to him, and he noted that monetary issues were the only French problems coming to the White House since the de Gaulle resignation.
Jurich confirmed that the Volcker Committee had not yet treated this problem and said that he would get from it a presentation of the options.
Kissinger stated that the President is often asked to decide on monetary questions that have a high political content. He had agreed to separate handling of monetary problems, but it was becoming clear that the domestic political situation is more crucial for this issue than the strictly technical and financial factors. Here, as elsewhere, he wished to give the President real choices before his options were closed. He said that we might expect another financial crisis in August if any party except the CDU were to win the German elections.
[Page 473]Jurich noted also a possible crisis with the U.K. and the pound.
Hartman said that we had to consider the following type of issue. Suppose that the French government were faced with a monetary crisis, but were reluctant to move toward exchange rate adjustments (because of symbolic considerations left over from the de Gaulle era): we would want to see what is in the U.S. interest. For example, if we placed higher priority on revaluing the mark than devaluing the franc, how would this affect the general international situation and how might it help our French relations?
There was further discussion on the type of studies needed. It was agreed that the Volcker group would forward shorter-term options in the context of the French paper currently being discussed, but that there would then be a further look at the broader questions, including the choices between revaluation and devaluation, whether or not to pursue a multilateral solution, etc. Jurich thought that a new French President might want to move quickly to devalue and blame the action on the previous regime. Tanguy disagreed and did not think that a French President could get away with this. Hartman stressed that these issues have to be looked at in a broader political framework, both in France and in Europe generally; we cannot discuss them purely in a monetary context.
Kissinger noted, and there was agreement, that the paper’s language implying past U.S. political coordination with France on Biafra was exaggerated. He suggested that the paper was basically sound, did not require a NSC meeting, and could be forwarded to the President with minor changes. The group concurred.
Hartman said that State would like a feedback on the President’s reaction so that they would have general guidance on how to play the French situation in the near future. Kissinger agreed to supply this information.
Smith noted that some minor points had been ironed out between CIA and State, but that there remained disagreement on the likelihood of de Gaulle’s returning to play a role, at least behind the scene. CIA believed, and Loomis noted USIA concurrence, that de Gaulle will stay aloof, and that in any event a behind-the-scene involvement would not have a direct bearing on our policy. Tanguy believed that we would have to take account of this in dealing with him as an individual. Smith noted that the implication would be that we should not dance on de Gaulle’s grave, a poor policy under any circumstances.
In response to Kissinger’s query, Tanguy said that he believed Poher would probably win on the second ballot. He and Smith confirmed that a Washington assessment of Poher had not yet been prepared.
[Page 474]Jurich noted a mixing of short and long-term French economic problems on page 2 of the paper which it was agreed would be clarified.
Kissinger then discussed the question of NSSM 47, Military Relations With France. He believed that a treatment of military relations alone would give too narrow a focus. Closer military relations with France (except for certain NATO aspects) really rested on political grounds. He therefore suggested that the NSSM become a broader study, merging military and political relations, especially in light of the elections outcome. In response to Loomis’ suggestion, Kissinger confirmed that he believed that monetary questions should also be treated in the paper. In every conversation with Debré, he gives highest priority to these questions. The short-term Volcker Committee paper on monetary questions, previously discussed, could serve as a building block for the fuller treatment.
There was some discussion of timing, after which there was agreement to Kissinger’s suggestion that we hold August 1 as the target date, with the understanding that this could be slipped if there is a major political realignment in France.
Sonnenfeldt stated that no matter what regime emerges, the military questions in the study raise technical considerations that can and should be studied in the coming weeks, even though the political issues would have to be delayed.
Kissinger noted Presidential interest in looking at various military proposals, e.g. Anglo-French cooperation. Sonnenfeldt and Unger confirmed that NSSM 47 would cover such problems.
Kissinger repeated that this paper was very good and said that a new directive would be sent out broadening the terms of reference for a follow-on study on France.
Sonnenfeldt said that General Goodpaster wants guidance on how to deal with the French and others over the coming weeks, and it was agreed that the paper should be sent to him once the minor changes in it were made.
[Omitted here is discussion of Peru. See Foreign Relations, 1969–1976, volume E–10, Documents on American Republics, 1969–1972, Document 599.]
- Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–111, Senior Review Group, SRG Minutes Originals 1969. Secret; Nodis. The meeting was held in the White House Situation Room.↩
- The Review Group was considering the NSSM 55 Response, Document 127. The revised paper and a memorandum from Kissinger to Nixon dated May 27 summarizing the study and requesting approval of NSDM 14 (Document 129) is in the National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–153, National Security Study Memoranda, NSSM 60.↩
- Document 123.↩
- See Document 129.↩
- This part of the discussion lasted from 2:15 to 2:30 p.m.↩