Off to the Summit

Hoping for a show of unity, Reagan takes his record on the road

It is the sort of sentimental journey most tourists can only dream of: the successful American’s triumphal visit to the land from which obscure forebears set out for the New World generations ago. And so Ronald Reagan’s four-day visit to Ireland was carefully planned as a kind of televised wish fulfillment, especially on Sunday in the village of Bally-poreen (pop. 350). There the President was scheduled to pray in the Church of the Assumption of Our Lady, look up in the baptismal book the record of Great-Grandfather Michael’s baptism on Sept. 3, 1829, and wander over to the Ronald Reagan Lounge at O’Farrell’s Pub for a lunch of ham and cabbage.

But unlike Presidents Kennedy and Nixon when they visited the Old Sod, Reagan had to contend with demonstrators who also had an acute sense of what would play on American TV. On Saturday, shortly before Reagan received an honorary doctor of laws degree at University College of the National University of Ireland, 2,000 faculty, students and other protesters attended a rival “deconferring ceremony” at which Marian Robinson, a visiting American professor who happens to be a cousin of Nancy Reagan’s, read a citation denouncing the President’s nuclear arms policies; three holders of honorary doctorates returned their degrees in protest. The demonstrators were peaceful, and they aimed their Irish ire at the Administration’s foreign policy rather than at America. When someone set fire to a U.S. flag, other protesters rushed to put out the blaze and apologized to American reporters. “Our affection for America is as deep as ever,” explained John Murphy, a former member of the Irish Senate. “But Reagan’s nuclear and Central American policy is an unacceptable way of thinking.”

The scenes were a kind of visual metaphor for Reagan’s foreign policy these days: placidity and fellowship front and center, tension and turmoil in the background. The trip to Ireland opened a ten-day tour filled with the kind of ceremony—visits to castles, palaces and battlefields—at which the President excels.

After a private lunch with Queen Elizabeth II and Prince Philip on Tuesday at Buckingham Palace, he will officiate in Normandy at observances of the 40th anniversary of Dday, including a wreath-laying ceremony at Omaha Beach. At week’s end he will attend the annual economic summit meeting in London of seven of the world’s major industrial powers (the U.S., Britain, France, West Germany, Italy, Canada and Japan).

Throughout, Reagan will be trying to portray himself as the leader of an alliance that is enjoying a rare period of relative prosperity and solidarity. White House aides are quick to admit that one purpose is to impress the voters at home.

Says an adviser: “I would assume that the President would get some sort of a blip on his job rating.” But the display is by no means all show: visits by NATO foreign ministers and Israeli Defense Minister Moshe Arens to the U.S. last week produced genuine accommodation between Washington and its major allies. The possibility of some arrangement with an important adversary arose too, as Secretary of State George Shultz took off with no advance fanfare on a journey to Nicaragua, then proceeded on to Galway to brief the President (see WORLD).

Still, cacophonous notes of political strife and financial anxiety keep rumbling amid the harmony. Repeated attacks on shipping in the Persian Gulf pose a delicate problem of how to protect Western oil supplies without risking U.S. involvement in the Iran-Iraq war. America’s relations with the Soviet Union keep hitting new lows. There are indications that the London summit may not be quite the feast of self-congratulation over economic growth that had been expected. France, Germany and Britain, disturbed by tremors in the American banking system, are voicing renewed criticism of U.S. policies toward budget deficits, interest rates and Third World debt.

Reagan’s reply to all these concerns was to strike an attitude of poised calm, even when taking firm action. The President last week invoked his emergency powers to sell Saudi Arabia 400 shoulder-fired Stinger antiaircraft missiles and to provide a fourth aerial tanker, a KC-10, that can refuel Saudi fighters in flight. The moves were intended to help the Saudis protect shipping from Iranian air assault in the Persian Gulf. Kuwait promptly made an unofficial request for Stingers; the U.S. suggested it turn to European suppliers.

Reagan made it clear that he does not believe a real emergency exists in the gulf, at least not yet. He used his extraordinary powers principally to avoid the delay that would have ensued if he had asked Congress to approve the Stinger sale to the Saudis. Noting a respite in the attacks on gulf shipping, the President told foreign TV correspondents, “It appears that, rather than getting worse, the situation has quieted somewhat. So maybe it’s going to turn out all right.” Washington officials emphasize that the U.S. would be extremely reluctant to use its own air and naval power to protect shipping in the gulf unless 1) Arab states offering the use of bases on their territory publicly request such assistance, and 2) British and French forces cooperate in this defense effort.

In Europe, Reagan will urge his fellow leaders to remind their own citizens that the West is far less dependent now on oil shipments through the Persian Gulf than it was in 1973-74 and 1979, when supplies ran seriously short. His point: the biggest threat to Western economies is not a real shortage of oil but an unjustified surge of panic buying and price boosts.

Reagan took pains to cool his rhetoric toward the U.S.S.R., despite continuing provocation from Moscow. Soviet President Konstantin Chernenko stepped up the war of words with the U.S., telling young Soviet servicemen at a Kremlin ceremony that they had to be prepared to deal with “political forces that are deaf to good will and the arguments of reason.” The Kremlin even launched a campaign to discredit the Normandy invasion, outrageously contending that it had been botched, while the war was actually won on the Eastern front. Pravda accused Reagan personally of going to the anniversary ceremonies “to exploit the glory of the dead.”

Reagan nonetheless voiced only gentle criticism of the Soviets last week. In a talk to U.S. Olympic athletes in Colorado, he derided the “political machinations of . . . countries that are less than free,” but did not specifically mention the Soviet pullout from the Games. In the major speech of his European tour, which he was to deliver before the Irish parliament in Dublin on Monday, Reagan planned to stress a “two-track” approach to Moscow: military strength combined with willingness to resume negotiations on arms control and other issues whenever the U.S.S.R. is ready for serious discussions.

Foreign ministers of the 16 NATO countries, meeting last week in Washington and at Wye Plantation, an 18th century mansion on Maryland’s Eastern Shore, heartily endorsed this approach. Some of the ministers who had recently visited Moscow ventured several explanations for Soviet surliness. They theorized that the U.S.S.R. is on the defensive because of such incidents as the shooting down of the Korean airliner last summer and the failure of the European peace movement to stop the deployment of U.S. missiles in Europe. The ministers speculated that the Kremlin is deliberately fanning anxiety in the hope of causing splits in NATO and that it is trying to influence the U.S. presidential election. There was little indication that the ministers blamed Washington for the icy state of superpower relations.

Indeed, if any nation came under pressure at the NATO meeting, it was The Netherlands. The Dutch government, skittish about public opinion, has waffled on accepting 48 U.S. cruise missiles as part of NATO’s five-country deployment. Dutch officials last week sounded out their alliance partners about scaling back the missile quota. The response: sympathy, but no deal. At week’s end the Dutch announced a decision that pleased neither the U.S. nor the peace movement: if the Soviets add even a single SS-20 missile to their present arsenal, The Netherlands will accept the full complement of cruises, but in 1986 and 1987, a year and a half behind schedule. The Dutch reserved the right to deploy fewer if there is some sort of superpower arms-control agreement before then, none if the Soviet missile force is reduced. NATO’s retiring secretary-general Joseph Luns insisted that the Dutch disagreement would not affect the missile deployments elsewhere.

Moshe Arens had encouraging words for Washington. The Israeli Defense Minister made the expected protest that Stinger missiles supplied to Saudi Arabia might wind up in the hands of anti-Israel terrorists. But he raised the point only during the last two minutes of his 37-minute talk with his American counterpart, Caspar Weinberger. Otherwise, Arens told reporters, “in my judgment [U.S.-Israeli relations] have never been better.” Arens may have been laying it on a bit thick to impress voters in both the U.S. and in Israel, which goes to the polls in July. But relations have indeed improved since Arens and Prime Minister Yitzhak Shamir replaced the prickly duo of Menachem Begin and Ariel Sharon last year.

Reagan and his aides expected only mild criticism of the U.S. at the London summit. None of the heads of government want to embarrass the President in an election year, and anyway there seemed to be little to argue about. The recovery that last week pushed the American civilian unemployment rate down to 7.5%, barely above the 7.4% level when Reagan took office, has begun to take hold in the rest of the industrial world, and in most countries it has been accompanied by relatively low inflation. One White House staffer predicted with satisfaction that the summit would be “dull.”

That is no longer the way Europeans are talking, however. They have been shocked by recent hikes in American interest rates, which they see as a threat to economic growth in both the U.S. and Europe. They are concerned that the rising rates will make it ever more difficult for Third World countries to repay their gargantuan debt and that their inability to do so will threaten the stability of Western banks that hold the loans. The near collapse a few weeks ago of the Continental Illinois Bank of Chicago, a major international lender, sharpened their fears. A bad omen: Bolivia last week suspended repayment of $3.4 billion in foreign loans (see ECONOMY & BUSINESS).

At a Franco-German meeting in the chateau of Rambouillet outside Paris last week, West German Chancellor Helmut Kohl called the Third World debt “one of the most important [problems] before the London summit” and grumbled about “how deeply we feel the danger of this situation.” Seated beside him, French President Francois Mitterrand nodded assent.

He assailed “the noxious effects of high interest rates” and pledged, “Germany and France are very decided to appeal to the parties concerned.”

Precisely what the Europeans will ask Washington to do is uncertain. U.S. Treasury Secretary Donald Regan is bracing himself and the President to resist a demand that they press U.S. banks to put a “cap” on interest rates, at least on loans to the Third World.. Some European financial officials want Washington to urge U.S. banks to face the fact that there are Third World debts that will never be repaid and to set aside larger reserves to cover the losses. The major debtor-nations in Latin America have scheduled a meeting in Buenos Aires after the London summit. They threaten to take drastic action of their own: the joint withholding of interest payments on their loans.

Reagan is not likely to give much ground in London. Speaking with reporters before leaving Washington, he defended his budget policy in a way calculated to deflect criticism at the summit.

Said the President: “I will be talking to people who also have deficits at pretty much the same percentage rates of their gross national products as ours.” Using an argument that the other heads of government are most unlikely to accept, he insisted that interest rates are “not connected to the deficit [but] are tied to the lack of confidence of so many in the market, as to whether we are determined to hold down inflation.” Aides note that high interest rates are not all bad; they indirectly help produce a huge trade deficit that hurts the U.S. but helps other countries because it means they are selling more goods and services to American customers.

Chances that the London summit will resolve these disputes are slim. The previous economic summits have concentrated on building a spirit of cooperation and have rarely achieved specific agreements on complicated financial matters. Looking back on the eight economic summits he attended as West German Chancellor, Kohl’s predecessor, Helmut Schmidt, once reflected that the meetings were valuable not so much for what they accomplished as for what they avoided. He had in mind primarily resistance to curbs on free trade. Still, political harmony and economic discord are not an enduring combination—a point which the London gathering may well impress on the U.S. President.

— By George J. Church. Reported by Douglas Brew with the President and Mary Cronin/Galway, with other bureaus