Conference files, lot 59 D 95, CF 97

Decision on German Financial Contribution to Defense 1

secret

[PAR D–9a]

1. The Federal Republic should undertake to make a total contribution to the costs of defense representing a use of German resources comparable to the use by the other principal Western countries of their resources for defense (including expenditures outside Europe.) The contractual arrangements should establish the amount of such total contribution for the German financial year 1952/53.

The three Ministers approve the conclusions of the Tripartite Group on the total contribution to be sought from the Federal Republic (estimated at DM 13 thousand million for the N.A.T.O. year 1952/53).2 The High Commission should use these conclusions as a basis for the negotiation.

The Federal Republic should in addition undertake to re-examine with the three Governments the figure agreed for its contribution in the first year if, as a result of a general agreement among the N.A.T.O. countries, these countries increase their defense efforts.

2. Further, the negotiations with the Federal Government should aim at obtaining an undertaking from the Federal Republic to cover the costs for the German financial year 1952/53 of the support of Allied forces stationed in Germany, it being agreed that these costs will be confined to defense costs and reduced to the minimum comparable with military efficiency. The methods to be adopted to achieve the necessary reductions and economies will be worked out by the Allied High Commission in consultation with the Allied military authorities concerned.

The amounts to be paid by the Federal Republic during the German financial year 1952/53 for the support of forces of each of the Allied Powers, as thus established, will not be subject to reduction. The procedure [Page 1686] by which the amounts for the support of the forces of the Allied Powers not members of the Community will be paid after the entry into force of the Treaty setting up the European Defense Community, and in particular the question whether they will be paid through the European Commissioner for Defense, will be worked out at the appropriate time by agreement among the parties concerned. After the entry into force of the Treaty establishing the European Defense Community the costs for the support in Germany of the forces of countries belonging to the Community, will be paid through the common budget.3

3. The Federal Republic will pay, as its contribution to the European Defense Community, the amount established as its total contribution to defense, less the agreed amounts for the costs of the support of Allied forces stationed in Germany (unless it has been agreed that these payments shall be made through the Commissioner), and less costs borne by the German budget which may be considered to be defense costs under N.A.T.O. criteria but are not included in the budget of the Community (police, military pensions, etc.).4

4. Discussions with the Federal Government on the German financial contribution should begin at once and be concluded as rapidly as possible. In these discsusions, it would be useful for the Federal Government to know the main lines of the first budget of the Community, regard being had to the German contribution established in accordance with paragraph 3 above. Accordingly, the French Government will request the Paris Conference to prepare as soon as possible, so that use can be made of it before the 31st December, 1951, an appropriate estimate of the expenditures and receipts of this common budget for the first year.5 In the preparation of this estimate, use will be made of the reports to be drawn up by the Allied High Commission as a [Page 1687] result of the request of the Temporary Council Committee, regarding the German capacity for meeting industrial and infrastructure requirements (EB–D/44 of 14th November, 1951), insofar as the contents of these reports make it possible.

5. For the period beyond the first year, the contractual arrangements should provide a continuing obligation on the part of the Federal Republic in respect of the support of the Allied forces in Germany, and of its contribution to the European Defense Community. The terms of this obligation should be worked out by the Allied High Commission in the course of the negotiations.6

  1. Attached to the source text was a cover sheet, not printed, which stated that this decision had been approved by the Foreign Ministers on November 27 and was designated PAR D–9a in the records of the delegation. The earlier draft of this decision, PAR D–9, also dated November 27, which is referred to in PAR M–3. supra, is indicated in the following footnotes.
  2. For the text of TGG (FD) P 35, see p. 1670.
  3. In PAR D–9 this paragraph read:

    “The amount to be paid by the Federal Republic during the German financial year 1952/53 for the support of forces of each of the Allied Powers not members of the European Defense Community, as thus established, will not be subject to reduction. The procedures by which these sums will be paid after the entry into force of the treaty setting up the European Defense Community, and in particular the question whether they will be paid through the European Commissioner for Defense, will be worked out at the appropriate time by agreement among the parties concerned.” (Conference files, lot 59 D 95, CF 97)

  4. In PAR D–9 there was an additional sentence to this paragraph which read: “After the entry into force of the Treaty establishing the European Defense Community the costs for the support in Germany of the forces of countries belonging to the Community will be paid through the common budget.”
  5. In PAR D–9 the first part of this paragraph read:

    “4. The three Governments recognize that it will be necessary for the Federal Government, during the course of the negotiations on the contractual arrangements, to know the main lines of the first budget of the Community, regard being had to the German contribution established in accordance with paragraph 3 above. Accordingly, the French Government will request the Paris Conference to prepare as soon as possible, and in any case before December 31st, 1951, an approximate estimate of the expenditures and receipts of this common budget for the first year.”

  6. On November 28 a copy of this decision was transmitted to McCloy as an enclosure to a letter from Byroade. McCloy was informed that the decision completed paragraph 12 of the Foreign Ministers instruction to the Allied High Commission, dated September 13, 1951 (see WFM T–5a, p. 1197 and footnotes thereto) and that the Foreign Ministers agreed that negotiations with the West German representatives “should begin at once on the basis of this decision.” (740.5/12–351)