740.00119 Council/3–3148: Telegram
The Acting Secretary of State to the United States Deputy for Austria at the Council of Foreign Ministers (Reber), at London
niact
1116. Ausdel 9. For Reber. Dept inclined to favor position falling between French reaction and AusDel’s suggestions given in telecon Mar 31.1 Not believed here that counter-proposal would lead to speedy agreement in principle re Art 35 and on reference of details to AC. On contrary, believe that specification of conditions suggested by AusDel, together with additional conditions set out below, will require further discussion at London on all important points in Art 35. [Page 1484] While Dept of opinion that basic US position on Aus treaty would be best served by emphasizing differences on such matters as frontiers, reparation and military clauses, Dept does not believe it would be advisable to give any appearance of summary disposition of Art 35. Also feared here that raising issue at this time of reference details to AC might be regarded as deliberate Western effort to combat and delay negotiations.
For same reason, Dept opposed to US Del’s suggested condition re abandonment all reparation claims because feared this would make US vulnerable to Soviet counter-blasts to effect that this condition reveals US unwillingness to conclude agreement on Art 35.
In view foregoing, Dept believes AusDel statement on Soviet proposal should be along following lines:
USDel finds in difficult to see how Austria could pay more than $100 million, particularly in light of Sov attitude on other parts of Art 35 and other arts having an economic impact on Austria, but is prepared to study the possibility of a somewhat larger figure as a part of an entire settlement of problem of German assets in Austria, provided:
- 1.
- Austria has option to pay all or any part of obligation in goods or services on Ital formula.2
- 2.
- Six-year period for payment is preceded by a two-year period of grace to permit re-establishment of Austrian economy upon a basis which would materially assist Austria in meeting the obligation.
- 3.
- Soviet Union waives all Gosbank and German creditor claims against enterprises to be returned to Austria (assumed that Sov Union assumes all indebtedness incurred by enterprises to be retained since date taken into Soviet possession).
- 4.
- In addition to clarification and definition of net profits and other income, Sov Union to recognize obligation to leave available in Austrian economy a portion of Sov oil production determined by applying proportion of Sov oil production in Austria over total Aus oil production to an agreed estimate of Austria’s minimum requirements for petroleum products.
- 5.
- Time period exploration rights may remain outstanding before production to be substantially shorter than concession period for production.
- 6.
- Art 35 formula is accepted by Soviet Union as full and final settlement of all its claims against Austria re German assets.
- 7.
- It is understood unpaid balance of lump-sum does not draw interest (believe this should be used only if Soviets have raised point).
- 8.
- Clearly understood that, except as specifically stated otherwise in Art 35, Austrian law applies.
- 9.
- Satisfactory provision is agreed for settlement of disputes, i.e., Art 57.
In addition to above statement re lump-sum, USRep may say that USDel might consider higher figures (within terms of your previous instructions) than those previously suggested by it re oil production and exploration provided satisfactory solutions are found to problems regarding Austria’s minimum requirements and export of profits. May also state that USDel would consider adding another refinery to Korneuburg and Voesendorf if knew more about Soviet desires and capacity figures.
Sent to London as 1116 Ausdel 9; reptd to Vienna for Keyes and Erhardt only as 298.