No. 494


Memorandum by the Officer in Charge of Italian and Austrian Affairs ( Colladay) to the Director of the Office of Western European Affairs ( Byington)1


Subject: Austrian Aid Figure for Fiscal 1952

ECA has informed us that they now consider the figure of $145 million for Austrian aid in fiscal 1952 as a ceiling figure and that $100 million is a more realistic estimate. This drastic change, which is predicated upon ECA’s expectation that Congress will demand a cut in Austrian aid and upon ECA’s dissatisfaction with Austrian performance, is in sharp contrast to ECA/W’s previous position (namely, that Austria’s aid figure would be “somewhat lower” than the $185 million figure suggested by the Vienna Mission and OSR and that the “illustrative” figure of $145 million could be revised in the interests of preserving U.S. policy objectives). It is significant that so far as we know, ECA/W did not seek [Page 1048] to communicate this apparent policy change on the recent occasions of Mr. Foster’s recent visit to Vienna or Ambassador Donnelly’s call on Mr. Paul Porter.

WE has taken the position that sufficient aid should be furnished Austria in 1952 to maintain political stability. There is a strong presumption that this cannot be done if ECA goes ahead with this new “get-tough” policy and if the Austrian Government is requested to put into effect at once the large-scale reform program which would be necessary to keep to this low aid figure. It is likely, therefore, that a high level meeting between Department and ECA officers will be required to resolve this difference of opinion on the execution of U.S. policy.

  1. Drafted by Rutter.