740.00119 Control (Austria)/11–147

Memorandum by the United States High Commissioner for Austria (Keyes) for the Secretary of State97

top secret

Subject: The Austrian Problem

Objectives

The common objectives of the United States and of the Austrian Government in Austria, in order of priority, are:

a)
The effective participation of Austria in the European Recovery Program.
b)
The maintenance of Austrian territorial, political, and economic integrity.
c)
The withdrawal of occupation troops.
d)
The conclusion of a State Treaty which guarantees a), b), and c).

Discussion

1.
Since the Deputies Meetings in London in January 1947 and the Moscow CFM, the overall strategy for Western Europe has undergone significant changes. Before June 1947 the US was attempting to achieve piecemeal settlement of differences with the Soviets at the best possible individual price, and hence was bending every effort to secure an Austrian treaty at the least cost to Austrian sovereignty and independence. In view of the changed strategy inherent in the European Recovery Program it is deemed advisable to review this policy for Austria, and to consider the solution of the Austrian problem in the framework of the general situation in Western Europe and specifically in relation to the European Recovery Program.
2.
Austria’s participation in the European Recovery Program and in the Interim Aid program over strong Soviet objections and the further consolidation of the U.S. political position in Austria has made that country the easternmost Central European bulwark of the European Recovery Program. Conversely, abandonment of Austria to potentially complete Soviet penetration would drive a wedge between Italy and Western Germany, expose the Southern flank of the U.S. zone of Germany, and threaten the position in depth of the European [Page 796] Recovery Program in France and in England, besides depriving us of a useful wedge between the Slavic states of Jugoslavia and Czechoslovakia and an excellent observation post of Soviet operations in the Balkans.
3.
In view of developments in Western Europe attendant upon the inauguration of the European Recovery Program, it is now, and will be in the future, Austria’s sole hope of survival as an independent state that it be permitted to continue effective participation in the ERP. It is the hope and intention of the present Austrian government and of the vast majority of its people to implement participation in the ERP as a sovereign state, but unless adequate safeguards against Soviet economic domination are provided, it is questionable whether that participation can be implemented, or whether, in fact, the present Austrian government can long survive.
4.
The present Austrian government is so strongly committed to the maintenance of territorial, political and economic integrity that any concessions to the Soviets along these lines would undoubtedly result in the fall of the government. Any cession of territory to Jugoslavia, any infringement of sovereignty, or granting of extra-territorial and extra-legal rights to Soviet holdings in Austria are strongly opposed by the majority of the Austrian populace.
5.
Although the continuance of occupation constitutes a great economic and psychological burden on Austria after 2½ years, it has become clear to a majority of the populace that the presence of troops of the Western Powers has deterred the Soviets from resorting to such overt acts as took place in Hungary and other exclusively Soviet-controlled states. Following the Moscow CFM, Soviet objectives in Austria have emerged more clearly and there has been a marked change in public sentiment in Austria regarding the withdrawal of troops of the Western Powers. The fact that U.S. occupation forces no longer constitute a drain on the economy, but are an economic asset has contributed to this change of opinion.
6.
The Austrian government and the Austrian people most fervently desire the conclusion of a State Treaty and the restoration of their independence and sovereignty. But since the conclusion of the Moscow CFM this wish has been tempered by the realization that a treaty which does not safeguard their sovereignty and economic independence may be far worse than no treaty at all. For obvious reasons, however, the principal and primary efforts of the Austrian government and the U.S. delegation must be directed, at least for public consumption, toward the goal of achieving a satisfactory treaty for Austria which would guarantee the attainment of objectives a), b) and c) above.
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Conclusions

1.
It would be in the best interests of the United States and of Austria to strive for achievement of the above objectives in the order of priority indicated.
2.
For tactical reasons the U.S. Delegation should push in the CFM for the conclusion of a State Treaty, but only on condition that objectives a), b), and c) above are guaranteed.

Recommendations

It is recommended that

1.
The U.S. Delegation at the CFM bend every effort to achieve the conclusion of an Austrian State Treaty which guarantees objectives a), b) and c) above by:
a)
Supporting acceptance of the French compromise proposal at a level which guarantees the attainment of objectives a) and b).
b)
Forcing the Russians into a declaration of their intentions toward Austria and a statement of their claims against Austria.
c)
Proposing that the Austrian Government submit a plan for liquidation and settlement of all German assets claims based on their ability to pay and guaranteeing the objectives set forth above.
d)
Proposing that the Western Powers renounce their claims against German assets in Western Austria, subject to agreement by all four powers on the settlement of the German assets question in Austria as a whole, and of the remaining unagreed articles of the treaty. Safeguards must also be provided to prevent the German assets in Western Austria from falling into Soviet hands by means of trading off against assets in the Eastern Zone.
2.
Failing to secure a satisfactory treaty at the present meeting of the CFM the Secretary consider for approval the plan attached as Annex A98 for achieving objectives a) and b).
3.
Failing to secure a satisfactory treaty at the present meeting of the CFM the Secretary consider for approval the plan attached as Annex B99 for withdrawal of troops.

Geoffrey Keyes

Lieutenant General, USA
High Commissioner in Austria
  1. There are no indications in the source text as to the date and place of preparation of this memorandum. The date enclosure of the Department file cannot be accepted as an indication of the date of the memorandum. General Keyes presumably prepared this memorandum while he was in London as a member of the United States Delegation to the Council of Foreign Ministers. The source text indicates that copies of the paper were distributed to other members of the Delegation.
  2. Not printed.
  3. Regarding the question of a possible withdrawal of Allied troops from Austria, see telegram P–8045, November 10, 1947, from Vienna, p. 1200.