762A.5/10–3151: Telegram

The Ambassador in France (Bruce) to the Acting Secretary of State 1

secret   priority

2544. Re Deptel 2403, Oct 24.2 During past few days I have had members my staff make strong representations to FonOff, FinMin and Monnet that discussions on financial arrangements for EDF shld not be permitted to delay agreed discussions on contractual arrangements. As far as we can ascertain, inability of French delegation in London to proceed appears to arise from a lack of agreement in French Govt on appropriate French position in London talks and not on an alleged inconsistency with EDF altho situation is also complicated again by a misunderstanding or inaccurate reporting on part of French delegation in London. In any case above three French groups now seem to accept view that an interim common budget for EDF does not prevent three OCC govts from agreeing on a common position to initiate discussion with Federal Republic on size and nature of its defense contribution. Monnet, Alphand and Guindey have told us separately that they wld like to discuss question with French delegate Lavergne who is returning from London today before giving us final views. If answer is not satisfactory in these conversations scheduled for tomorrow, I will take question up with Schuman.

I am still not clear on what you mean by an “interim solution” to problems of finance in EDF. It is certain that a special procedure for common financing in initial period must be worked out analogous to interim solutions being adopted for other issues arising in creation EDF. Nevertheless, such initial financing arrangements must be consistent with common budget principle from outset. As a minimum, central EDF institutions shld be responsible for expenditure of funds altho for a time appropriations, credits, and contracts existing in defense [Page 1661] programs now drawn up on national basis may guide expenditures. An initial common budget which is in a sense an addition of national budgets with sufficient flexibility to permit gradual development of single defense program shld be adequate and shld be possible of solution in brief time. Perhaps also final division of burden between participating states cld later be evolved by common EDF institutions.

On other hand, any “interim solution” which wld involve expenditure by Federal Republic directly for support of German forces wld bo inconsistent with establishment of European defense community and wld be seriously detrimental to prospects for its creation. French, in particular, wld no longer consider EDF to provide the guarantees against creation of German national force which they seek and wld be less likely to agree at outset to status of equality that Federal Republic requires if it is to obtain necessary support for new contractual arrangements and contribution to defense.

I recall that this very question was discussed by Dept officials with McCloy and myself in preparation of briefing paper for the Secretary at time of tripartite discussions in Washington and that it was resolved in this sense for that document on EDF.

  1. Repeated to London for Reinstein and to Frankfurt. Secretary Acheson had sailed for Europe on October 28 for the sixth regular session of the General Assembly and for talks with Foreign Ministers Schuman and Eden; for documentation on the tripartite Foreign Ministers discussions, see editorial note, p. 1312.
  2. Supra.