The Administrator of the Economic Cooperation Administration ( Hoffman ) to the Embassy in Belgium
Ecato 120. [Here follow references to telegrams Repto 2305 and Repto 2338 from Paris, neither printed, and information on their distribution.][Page 653]
We are seriously concerned by position Belgian Government against any credits to EPU, presumably reflecting attitude of Frère.1 For your information Belgian proposal that European credits be replaced by drawings on IMF opposed by most of executive branch including Treasury and State as well as much of professional staff of IMF. Therefore U.S. Government agreement most unlikely. Furthermore suggestion possibly sponsored by Frère that existing intra-European payments agreements could be continued with little change not acceptable to ECA. You are therefore instructed to make ECA position known to appropriate Belgian authorities as follows:
- ECA considers establishment of a European Payments Union along lines third draft OEEC financial experts report essential to economic recovery. Under probable terms amendment Foreign Assistance Act now before Congress ECA may be prohibited from disbursing any part of 600 million dollars of its appropriation in event of failure to attain satisfactory EPU or to any country failing to join such an EPU. Whether or not this is provided by law, ECA considers agreement to a satisfactory EPU so important that failure to agree would be cause for reconsideration of any plans to render aid to members of OEEC.
[Hoffman here lists several requirements the EPU plan would have to meet to be considered satisfactory by the ECA. These are treated elsewhere in this compilation.]
Sent Brussels Ecato 120 rptd Paris Torep 3592 The Hague Ecato 254 London Ecato 593.
- Maurice Frère, Governor of the Belgian National Bank, Governor of the International Monetary Fund, and Alternate Governor of the International Bank for Reconstruction and Development (for Belgium).↩