Back To the Berlin Wall

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Reagan was more optimistic at his Venice press conference, indicating that "there is an increased opportunity for a summit" and giving Gorbachev credit for wanting a missile pact. Said Reagan: "He is faced with an economic problem in his country that has been aggravated by the military buildup . . . and I believe that he has some pretty practical reasons for why he would like to see a successful outcome."

But when the subject turned to economics, Reagan blundered. After speaking in favor of stable monetary exchange rates, the President offhandedly observed that nonetheless "there could still be some lowering of the ((U.S. dollar's)) value." Money traders interpreted that as a renewed attempt to talk the dollar down in order to reduce the U.S. trade deficit, and the greenback promptly sank. White House Spokesman Marlin Fitzwater issued two clarifications asserting that the President wanted the dollar to stabilize. Reagan will have to do better than that at a summit with Gorbachev, lest the Soviet leader steal all the credit for the missile agreement that should be the proudest international achievement of the Reagan presidency.