Foreign Relations of the United States, 1952–1954, Western European Security, Volume V, Part 1

740.5/2–2652

Reinstein Minutes¹

secret

[Washington, April 1, 1952.]

germany

financial contribution to defense

Mr. Schuman opened the meeting by reviewing the negotiations with the Germans regarding the financial contribution to defense. He said that the negotiations had been concerned primarily with the total amount of the contribution. The three members of the Executive Bureau had recommended a total contribution of DM 11.25 billion, from which there were to be deducted certain NATO approved defense expenditures. These had been estimated by Allied experts at DM one billion. The remainder, which would involve a monthly expenditure of DM 850 million seemed likely to be agreed to by the Germans. The payment at this rate would only begin when the new arrangement goes into effect and would run until the end of the NATO fiscal year. After that a new exercise would be necessary to determine the total German figure.²

Mr. Van Zeeland said that he and Mr. Stikker had asked for the meeting in order to make their viewpoint on this subject clear. They wished in particular to indicate the importance which they attached to the principle that the result of these negotiations should not be to involve additional expenditures for the other EDC countries, who had already undertaken heavy defense burdens. He realized that this point could not be written into the agreements, but he wished a moral guarantee.

Mr. Stikker said he understood that only the total contribution had been considered. He further understood that when the division of this contribution was discussed, the agreement of all the interested parties would be obtained. He wished to know how this would be done. He emphasized the importance of getting a real German contribution which would involve additional strength for the West, and he hoped that the division would be made with this concept in mind. He indicated that this was a point on which both he and Mr. Van Zeeland felt strongly.

Mr. Eden said the discussions on the division would begin very soon.

Mr. Acheson said there were several matters to be gone over with the EDC, which he listed as follows:

1. The division of the contribution during the first year and how this would be handled with the EDC.

2. How the total contribution would be worked out in the future, that is, by what type of exercise. Perhaps this would be dealt with in the EDC Treaty.

3. What expenditures of a defense character would be deductible from the total contribution in the future. For the first year a lump sum allowance had been made.

4. What procedure would be followed in making the division of the German contribution after the first year.

Mr. Acheson said that he believed that under the arrangements which were being worked out, the interests of the Benelux countries were wholly protected.

Mr. Stikker asked whether it would not be possible to obtain copies of the documents which had been submitted to the members of the Executive Bureau by the Federal Government and by the High Commission.

Mr. Eden said that the release of the German submission would require the consent of the Federal Government. This was being sought and it was hoped that the document could be made available within a few days.

1. Copies of these minutes are included in Conference files, lot 59 D 95, CF 103 and in CFM files, lot M 88, box 161 as document Ger–London MIN 7, Apr. 16, 1952. A summary of this meeting closely paralleling the minutes printed here was transmitted in telegram Secto 96, Feb. 26, 11 a.m. from Lisbon. (740.5/2–2652) A 400-word report on this meeting was also transmitted in telegram 262400Z of Feb. 26 (p. 167) to Lovett in Washington (Lovett departed from Lisbon for Washington late on Feb. 25) from Nash. Nash’s summary followed the same lines as the minutes printed here. An excerpt from the summary is presented in footnote 2, below.

2. Nash’s summary in telegram 262400Z (see footnote 1, above) recorded Schuman’s review as follows:

   “Schuman summarized situation by stating out of TCC Executive Bureau recmd of 11250 billion DM one billion DM would be allocated to cost of Berlin’s support, police pensions, etc. Leaving figure of 10 billion 250 million or the equivalent of 850 billion DM monthly payable from date EDF agreement goes into effect. Prior to date of effectiveness of EDF, Germany would carry occupation cost at rate between 500–600 billion DM monthly, with Ger stating figures should be at rate of 500, and US–UK–French holding out for 600. Arrangements in payment at rate of 850 monthly to go into effect upon execution of EDF would go to end of NATO year that is 30 June 53. After that date there would have to be a new determination.” (Conference files, lot 59 D 95, CF 103)