CFM files, lot M–88, box 253

Memorandum by the Deputy Assistant Administrator for Program in the Economic Cooperation Administration ( Cleveland )
secret

U.S. Position at Ottawa

i

At Ottawa, the irresistible force is about to meet the immovable body. All of our Yankee ingenuity is going to be directed toward the job of convincing the Europeans that the military requirement for defending Western Europe is larger, and costs more, than the sum total of all national efforts by the NATO countries. The Europeans, at the same time, are getting ready to counter our story about the MTDP gap with a unanimous view that they cannot do more than is now planned.

If these two sets of opinions are allowed to come into direct conflict, without a pretty clear understanding ahead of time as to how the resulting dog fight is going to be resolved, we will have produced a major international crisis, in which the Europeans including the U.K. are lined up against the United States. Moreover, the fracas will be public, and will be accompanied by a rash of statements and more or less authorized leaks to the press justifying the respective American and European positions.

The preliminary bouts have pointed up very clearly the nature of the real conflict. At London, Ambassador Spofford presented to the Council of Deputies, and later to the Inter-NATO Working Group, the U.S. view about the MTDP gap. According to all reports, it fell pretty flat. The Europeans did not, as we had hoped, agree that there was a gap that needed to be filled by future national commitments. Instead, they made sure that the North Atlantic Council did not receive a briefing on the gap from any multilateral body. At the same time in Paris, the Europeans (under British leadership) were engaged in making sure that the FEB interim report would be limited to a [Page 647] discussion on present defense programs and commitments, and that it would not identify any margin of resources that could be devoted to picking up any part of this gap between national commitments and total military requirements.

These events have made it necessary for the United States to place the problem of the MTDP gap before the North Atlantic Council at Ottawa as a unilateral statement. Yet it is clear that, without careful preparation of the ground, any such presentation will be met with chilly silence. If the U.S. is to avoid both the actuality and the appearance of a deep schism in the Atlantic alliance, it will be necessary for the U.S. to go to Ottawa with a plan for action on this subject that takes into account the known feelings of the Europeans as well as the present U.S. position.

ii

The opinions of the Europeans on this subject are now pretty well known, and are becoming better known as Ministers of Finance from the various European countries arrive in Washington.

Our discussions with the British have highlighted their view that their presently announced defense program (£4700 million over the period of the MTDP) is going to be very hard to achieve, given the deterioration in Britain’s external economic position, both on dollar and non-dollar account.

The Italians have said that they are not inclined to ask for a supplemental defense appropriation this year (as we have been urging them to do), and that next year’s defense budget will be about the same size as prospective defense expenditures for the current year.

The French have been hinting broadly in the public press that their defense program may have to be reduced from presently announced levels.

The Dutch have been very conservative about making commitments at all, and are very quick to point out the real economic difficulties which a large defense program would bring in its wake.

And the Belgians have spent several months justifying a small defense effort by claiming that they were fulfilling their total commitment and steadfastly refusing to admit that they are financially capable of taking on a large commitment.

These attitudes on the part of the Europeans are reinforced by the treatment which Congress has given to the estimates for European economic aid in fiscal year 1952. The Europeans have always been fully aware of the great importance of the economic aid portion of the total U.S. assistance program. That same multiplier that we have been using to buttress our case for economic aid on the Hill is now operating in reverse as European Ministers cut back their estimates of what is financially feasible to a degree that reflects in a disproportionate manner the effect on economic aid of the Congressional meat ax.

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iii

There is not much encouragement, then, in the assets side of our NATO balance sheet, either in Europe or on Capitol Hill. What about the requirement side?

The whole discussion in Washington of the MTDP gap rested on a military statement of the military requirements. By and large, those parts of the U.S. government concerned with political, economic, and financial matters have taken as given data the military judgments that went into the Medium Term Defense Plan. Moreover, this same attitude has carried over into the NATO itself, so that judgments by the Standing Group have not really been reviewed by the people concerned with political possibilities, production capabilities, and the provision of the necessary funds.

Thus, in the ISAC Study about the MTDP gap, we started with the requirements as a given factor, and tried to figure out ways and means of covering the total requirement. The civilian members of ISAC did not really review the requirement as such, nor did any civilian agency (within the U.S. government or multilaterally in the NATO organization) even participate in the costing process.

When you stop to look at it, this is a pretty remarkable state of affairs. Normally, within any government, a military judgment as to what is required to do a military job is never fully accepted by the people responsible for budget decisions and the raising of revenue. Indeed, the military planners are often given a ceiling figure against which to make their budget, and the cloth of “military requirements” is cut accordingly. The amount of water in U.S. military requirements estimates has historically been large, particularly during World War II, so that the pulling and hauling between the military planners and the people holding the budgetary purse strings has been a healthy administrative tension. It is therefore quite extraordinary that in the case of the Medium Term Defense Plan, no civilian budget or finance people, in any of the individual NATO governments or in the NATO organization as such, really had a chance to screen the military requirements and argue about the size of the total requirements with the people responsible for planning under the Standing Group.

Looked at this way, it is easy to see one reason why the Medium Term Defense Plan is larger than the sum of NATO government plans for carrying it out. This reason is that most of all of the European governments do not believe that the total military requirement is as large as the military planners (including their own military people) say it is. This attitude on the part of precariously balanced Cabinets is normal, natural, and understandable. It does not, of course, mean that they could not take on a larger total defense load. But it does explain what they mean when they react so strongly and so uniformly against “buying the gap unseen”.

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The requirements picture is further complicated now by the submission of a SHAPE requirement that, in effect, competes with the MTDP for acceptance as the requirements side of the NATO balance sheet. The fact that the SHAPE plan is not costed, and that its impact on present national commitments and the country distribution of further defense loads is uncertain, simply adds to the difficulty of arriving at a firm NATO military requirement which the member Governments will agree is financially feasible. The SHAPE plan makes it difficult for the U.S. to put all its chips, in the Ottawa presentation, on a “gap analysis” based on the Medium Term Defense Plan that is already nearly two years old.

iv

Viewed in the light of these comments, the biggest task which NATO must now undertake is to develop and adopt a realistic military requirement which (a) gives promise of building the defenses of Western Europe to a point where the Russians can be fought effectively on the European continent, (b) is agreed by the whole group of NATO nations to be economically and financially feasible, and (c) is composed of identifiable tasks allocated to individual countries (and to the European Defense Force on the continent when it is created).

It is clear from the experience of NATO so far that a military requirement answering to this description will never be produced by separate international groups of military experts, production experts, and financial and economic experts, all sitting separately in more or less water-tight compartments. A realizable military plan must involve a combined judgment as to what is necessary from a military standpoint, what is physically possible, and what is financially and politically practical. This kind of plan will, of course, be a compromise. Presumably it will involve a larger total of national commitments than the sum of present national commitments against the MTDP. Equally probably, it will involve a total load which is less than the present estimated cost of the MTDP. It should represent the practical limit of European contribution to the defense of Europe, plus a judgment as to how much of the total U.S. security budget can and should be devoted to that same purpose. It would represent, in the last analysis, a political judgment as to what relative weight should be given to military and economic situations. It would not wholly satisfy defense ministers, chiefs of staffs, financial ministers and foreign ministers. But NATO would have, for the first time, a central plan and a common guide for the whole NATO effort—not just another “exercise”.

How can such a plan be developed, and on what schedule? Two factors stand out as of special importance:

(a)
It must be a joint production of military and economic planners, and
(b)
it should be adopted this fall if it is to have any influence on national defense budgets for fiscal years beginning variously on January 1, April 1, and July 1, 1952.

v

The following plan of action would fit these specifications. It might produce the kind of plan described above, and on the necessary schedule. There are, no doubt, other ways of getting it done, but this seems a practical one.

1.
As now intended, the U.S. would make at Ottawa a full presentation of its conclusions about the gap, followed by a discussion of the need for a military plan which is regarded by all the NATO partners as financially feasible.
2.
After the necessary diplomatic preparation with the other delegations at Ottawa, the U.S. would propose (or get another delegation to propose) that a special group of high-level government experts be designated to work out and present to the Rome Council meeting a military/financial plan for the defense of Western Europe. These “experts” would be drawn as individuals primarily from the larger countries with perhaps a very few from the smaller NATO partners. In the case of the U.S., U.K., and France, at least, both a senior military and a senior economic person would be drawn into the group. General Bradley is the obvious example of a military officer for this purpose. Sir Edmond Plowden is an obvious example of an economic officer with the necessary rank and experience. (Perhaps the level should be raised still further, to include such people as Mr. Harriman.)
3.
This group would consider itself responsible both for developing a practical plan and for getting it sold, at least to the executive sides of the larger governments, prior to the Rome meeting.
4.
The group might well take the SHAPE plan as a military basis, and the present national commitments as a starting point for adding to total financial commitments.
5.
A summary of their report would be published at some stage, presumably after the Rome meeting, so that the peoples of the NATO countries could get some idea, in broad outline, of the total military, financial and political plan to which they are being asked to contribute in their own defense.

Obviously, the important thing is not the particular mechanism by which such a plan gets put together, but the principle that the plan must be a military-cum-financial plan, not a military judgment in a vacuum which is then reviewed by financial experts in a vacuum. However, it is reasonably clear from the brief experience so far with the Inter-NATO Working Group that this task cannot be undertaken by a group which is three of four levels down from the top, and which has little real power to influence the participating governments.

Planning on the present basis is now bogging down in NATO. But the emergence of SHAPE as a headquarters with ideas of its own makes realistic NATO planning possible. And the certainty of an [Page 651] impasse between the U.S. and the Europeans if we proceed along present lines makes a New Look necessary to the political health of the Atlantic alliance.