No. 134

755.5 MAP/5–3151: Telegram

The Administrator for Economic Cooperation ( Foster ) to the ECA Mission in Belgium 1


Ecato 263. Toisa. Reference Toeca 181, rptd Torep 181;2 Repto 2355, rptd Brussels Repto 143.3

1. Having considered reftels ECA/W decision is to accept recommendations Mission and OSR and to make no further allotments econ aid to Belg this FY. Figures presented Congress will reflect this decision.

2. Bissell has carefully reviewed his conversation with Ockrent here and is clear no commitment was made and no basis given Belgs to count on additional allotment. Nevertheless, believe it most important avoid misunderstanding, appearance of any difference of opinion between ECA/W and Mission, or any accusations of bad faith by Belgs. Accordingly, believe it essential send personal letter from Bissell to Ockrent to explain decision.

3. Text of letter is as follows:

“You will recall that in the course of our recent conversations in Washington,4 I told you that I would initiate an examination of the facts of the current Belg econ situation, and that I expected that results of this examination would indicate the need for an additional allotment of program funds to Belg.

“An appraisal of the econ situation has now been completed by my staff here which indicates clearly that Belgs external financial position at this time is highly satis and that prospects, at least for immed future, also appear to be very favorable. It is therefore necessary to draw the conclusion from the evidence of Belg econ progress that an additional allotment to Belg this year will not be required. This decision is totally unrelated to issues arising out of the Socobel case.

“I might take this occasion to restate present ECA policy with regard to the criteria for justifying econ aid to NATO countries. As in the past, the limits on the provision of available econ aid continue to be determined by balance of payments requirements. However, since the beginning of the year, ECA has had to give primary [Page 283] consideration to the effect of national defense programs upon the balance of payments of NATO countries. To the extent that the existing or prospective level of military effort in a country gave reasonable indications of a deterioration in its external financial balance, ECA has made available an appropriate amount of supporting econ aid. In the case of Belg, the present level of rearmament does not appear likely to have an unfavorable impact upon the balance of payments nor to result in deterioration in internal financial stability.

ECA will shortly place before the United States Congress a request for appropriations for further assistance in 1951/52 to those NATO countries, including Belg, whose military programs may be of a magnitude which would impose an undue burden on their balances of payments. The details of the relationship between a given level of defense expenditure and the appropriate amt of econ assistance to be extended to each country is, of course, a subject for further negotiation.

“You may feel assured that our Mission in Brussels is ready, as always, to discuss with you further the matters raised in this letter.”

4. Please note following points about this draft. (a) Purpose is to suggest that final review Belg position and final decision made in ECA/W so as avoid any impression that ECA/W favored further allotment and that Mission held contrary view, (b) Text deliberately omits reference to relationship between reduced Belg allotment for year and Belg initial position in EPU. We believe this matter should be discussed and settled between Mission or OSR and Belgs as OSR may direct. As to substance of question we believe every effort shld be made to dissuade Belgs from seeking adjustment of their initial position.

5. Suggest following procedure. Letter signed Bissell now enroute Mission via air pouch. Request Mission delivery to Ockrent upon receipt, unless Mission or OSR see compelling reasons to contrary. Pls cable exact time proposed delivery to permit us inform Jaspar, Belg rep here, simultaneously.5

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6. Upon delivery Bissell letter to Ockrent, Mission may wish to supplement Bissell statement on I.P. with emphasis following points. (a) Belg have received 74.3 mil from ECA in 50/51, incl loan to Congo. This amt greater than Belg requirements in light EPU earnings which actually represent another form US aid. (b) Belg insistence on right to reduce I.P. would make most unfavorable impression on Congress. This particularly significant at time when ECA engaged in seeking funds for next FY. Critics of US foreign aid may be expected seize on this issue to disadvantage not only Belg but entire Eur community.

  1. Sent also to Paris as telegram Torep 3674. Drafted by R. E. Lippincott and A. Weininger of ECA and cleared in ECA by the Deputy Administrator for Economic Cooperation, Bissell, and Assistant Administrator for Programs Porter.
  2. From Brussels, May 22; it raised questions concerning the inconsistency of a proposed $10 million additional allotment of economic aid to Belgium in the light of concern over the Belgian defense effort as expressed in telegram 1466, Document 131. (ECA message files, FRC 53A278, Paris)
  3. Not found in Department of State files.
  4. Ockrent had visited Washington to discuss the Socobel case.
  5. The decision to deliver the Bissell letter to Ockrent, as transmitted in telegram Ecato 263, was altered in succeeding weeks by discussions in OSR and in Brussels. Telegram Toeca 375 from Brussels, August 27, suggested that the letter be recast to request further discussion with Belgium based upon an updated analysis of the Belgian defense effort and deliberations by the NATO Financial and Economic Board on the distribution of economic aid among the NATO participants. The proposed redraft made it clear that U.S. willingness to enter into these discussions would in no way imply that economic aid to the Belgo-Luxembourg economic union for 1951–1952 would be forthcoming. (755.5–MAP/8–2751) In telegram Ecato 483 to Brussels, September 5, the ECA and Department of State approved the new approach but instructed the mission to delay conversations with the Belgians until establishment of a U.S. position. (755.5–MAP/9–551) Telegram Toeca 405 from Brussels, September 13, stated that the revised letter with oral comment had been delivered to Ockrent on that date together with word that the latest illustrative figures submitted to Congress on the possible division of economic aid contained no allocation for Belgium-Luxembourg. (755.5–MAP/9–1351)