740.5/2–1252: Telegram
The Ambassador in France ( Bruce ) to the Department of State 1
4927. USDel/TCC 92. EB members held second mtg with Ger Ministers Bluecher, Erhard and Schaeffer Feb 10 at request FedRep.2 Attended by Harriman and Draper, Monnet and Roll representing Plowden.
Ger reps furnished copies of Bonn res of Feb 8 setting forth conditions on Ger participation in defense and specific res on financial contribution.3 (Assume Bonn has telegraphed texts.) They stated Bundestag had not made any specific demands or concrete proposal, but resolutions stated the conditions on which those members of the Parliament supporting the Ger contribution to defense wld approve it.
Ger reps then reviewed their presentation in light of Bonn resolution, noting they had raised most points at previous session. They again defended Ger proposal, adding arguments to those made previously. Schaeffer stated Gers had made maximum offer and cld make no further concrete proposal. Erhard said offer was maximum and if Gers had to make contribution only out of their own resources.
Ger reps stressed negative attitude of opposition, which has ear of labor, and need for getting mass support for defense from Ger population. This wld be difficult if workers felt their social welfare wld be compromised. Ger reps asked that allies demonstrate confidence in Fed Govt, which has sought to create polit basis to make defense contribution possible.
Fol are most significant additional points made by Ger reps.
[Page 33]- 1.
- Schaeffer said he had gone over matter with Blank. They believe their offer wld cover costs of support of allied troops and costs of Ger contingents for period under consideration. This estimate was subject to proviso that defense contribution be used only to meet defense costs. On allied costs he indicated it wld conclude infrastructure, transport and communication, and cost of Ger service units. With respect to Ger contingents, it wld cover infrastructure, pay and equipment up to light weapons. Gers do not believe it is possible (apparently both on technical and financial grounds) to produce heavy weapons.
- 2.
- Erhard said Ger offer is subject to reservation with respect to types of goods Ger called on to make available. (He apparently meant Gers reserve right to reconsider if significant quantities imported materials required unless covered by aid.)
- 3.
- Expansion of level of production beyond that projected by Gers is extremely difficult because Ger economy has reached point where a number of rigid restrictions operate, capacity limitation, shortages of raw materials and dollar balance problem.
- 4.
- Gers believe comparison with other countries shld be made in absolute terms rather than in relation to increase in GNP. In these terms, and seen in context of what the defense expenditures wld purchase, they believe Ger wld make largest defense contribution of all EDC countries. Claimed our comparison based on official rates of exchange does not reflect real situation. Estimating purchasing power of DM at 25 to 35 percent more than French franc at official rates, Erhard intimated Ger contribution greater than French.
Monnet said Ger statement reiterated and confirmed position he had suggested at previous meeting, i.e., that Ger proposed to take defense “in its stride”, i.e., without making any sacrifice.
Harriman pointed out getting effective defense urgently means postponement some desirable economic goals until security is achieved. However, it is not only important for people to have sense of confidence in their currencies, they must also have sense of personal security, that is, freedom from fear of external aggression.
He said all countries have special problems and that judgment as to appropriate level of defense cannot be made on purely statistical grounds. He pointed out task of making judgment was difficult and that it had not been sought by members of EB. It had been sought by Germans. He remarked request was like seeing a doctor. One might not like the medicine prescribed but it was the doctor’s responsibility to make the best diagnosis he could. EB wld give its judgment objectively and wld do so as soon as possible. It wld attempt to indicate some of the factors or factual data which had been taken into consideration.
Subsequently, working group met with Germans and asked a number of technical questions reported on in separate telegrams.
- This telegram was repeated for information to Bonn and London.↩
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The German Delegation named here previously met with members of the Executive Bureau of the Temporary Council Committee in Paris on Feb. 4. Telegram 4733, Feb. 5, from Paris, which reported on that meeting, summarized the West German presentation as follows:
↩“Bluecher made prepared statement stating willingness of FedRep to make maximum contribution and appreciation burdens of other countries. He defended German submission along familiar lines, emphasizing that German situation different from all other countries. In question period, Erhard defended German figures as optimistic projection GNP. In reply to question why FedRep cld not contribute more than 20 percent of increase of GNP (as shown by its figures), he said higher per head consumption necessary to meet needs unemployed who wld be utilized to get increased production. He and Schaeffer said that no reductions possible in investment or social benefits projected and that all conceivable govt economies had been made. Erhard evaded question whether FedRep taking steps to control unessential investment. Schaeffer stated German taxes cld not be increased. There wld be deficit of 1.5 billion DM next German FY. Any further increase wld be impossible.” (740.5/2–552)
- Regarding the Bundestag resolutions under reference here, see also telegram 1499, Feb. 9, from Bonn, p. 611.↩