Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

31. Draft Memorandum From President Nixon to the President’s Assistant for National Security Affairs (Kissinger)¹

March 10, 1973.

After our discussion on the telephone today,² I have come completely around to the view that Connally so eloquently expressed a year ago³ and which we rejected for what then appeared to be good reasons.

The way the Europeans are talking today, European unity will not be in our interest, certainly not from a political viewpoint or from an economic viewpoint. When we used to talk about European unity, we were thinking in terms of the men who would be at the top of Europe who would be in control. Those men were people that we could get along with. Today, however, when we talk of European unity, and when we look far ahead, we have to recognize the stark fact that a united Europe will be led primarily by Left-leaning or Socialist heads of government. I say this despite the fact that Heath is still in power in Britain and Pompidou probably will retain power by a narrow margin in France.⁴ Even in Britain and France we have situations where the media and the establishment pull strongly to the Left at this point, and also where the media and the establishment take an increasingly anti-U.S. attitude.

In other words, what we have here is a situation where the Germans are totally pulled to the Left because of a Socialist government being in power, and where the other leaders will be pulled in that direction by their internal political situation. This means that, whether it’s in the economic field, the political field, or eventually even the military field, we will find that Europe will be in increasing confrontation with the United States rather than joining with us to present a united front against Soviet encroachment.

Under these circumstances, political considerations must completely override economic considerations in monetary and trade talks.⁵ This is going to be a bitter pill for Shultz to swallow but he must swallow it.

Also, the Connally view with regard to building our own bloc which would be made up of the United States, Japan and the under-developed⁶ countries of Latin America, Asia and Africa to the extent that we can mobilize them, must now become our objective.

Needless to say, these thoughts must not get into the bureaucracy and must also not be discussed in any public forum. What matters now is what we do and we must act effectively and soon or we will create in Europe a Frankenstein monster, which could prove to be highly detrimental to our interests in the years ahead.

1. Source: National Archives, Nixon Presidential Materials, White House Special Files, Staff Member & Office Files, President’s Personal Files, Box 4, Memoranda from the President, Memos—March 1973. No classification marking. The memorandum contains minor non-substantive handwritten revisions by the President. President Nixon spent most of March 10 at Camp David, Maryland, returning to Washington that evening. (Ibid., White House Central Files, President’s Daily Diary)
2. The President spoke to Kissinger by telephone from Camp David from 11:40 a.m. to 12:08 p.m. and from 5:36 to 5:43 p.m. (Ibid.) The transcript of the morning telephone conversation contains no mention of the monetary crisis. (Ibid., Kissinger Telephone Conversations, Box 19) No other record of the evening conversation has been found.
3. John B. Connally, Jr., was Secretary of the Treasury from February 1971 until May 1972. This is possibly a reference to Connally’s March 15, 1972, address to the Council on Foreign Relations, in which he noted the United States’ “close interest in whether [EC] monetary unity is a potentially liberalizing and stabilizing force in world financial affairs or will be converted into a vehicle for promoting an inward-looking, defensive bloc.” (The New York Times, March 16, 1972, p. 69) The text of Connally’s speech is in Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1972, pp. 411–416. See also Foreign Relations, 1969–1976, volume III, Foreign Economic Policy, 1969–1972; International Monetary Policy, 1969–1972, Document 226.
4. Nixon crossed out the word “majority” and replaced it with the handwritten “margin.”
5. Nixon added “& trade” to this sentence.
6. Nixon crossed out the word “other” and substituted it with “under.”