The Ambassdor in France (Bruce) to the
Department of State
4575. Eyes only for the Secy and Harriman. No distribution except as directed by Secy. Re Deptel 4394, January 28.1 I certainly agree that US must seek establishment of best priorities possible within Fr mil expenditures. Some shifts within the broad breakdown contained mytel 4437 Jan 252 have already been made but the situation remains basically the same. As I emphasized to you in mytel, reductions outlined were first results of Fr effort to program within 1190 billion franc ceiling on 1952 mil budget. In any case I [Page 1144] expect to receive a definite statement from Bidault on Thursday of this week and also understand that Bidault may wish to present the situation personally to Gen Eisenhower and to me on that day.
Draper and I will discuss how US elements here might review Fr statement on bilateral basis with Fr to establish best priorities. At present, however, I agree with Fr that knowledge of this situation should be limited to a very restricted group. I feel that until we have received definite statement from Bidault and gone over situation with him and perhaps other Fr Cab members, it would be difficult to suggest any particular course of action.
It is possible that Fr have overstated drastic changes that have to be made. However, I would like to point out that we have always been aware that consequences of having to impress Fr mil program within 1190 billion franc budget for 1952 would be very serious. Once you carve out of the 1190 billion franc figure the fixed and therefore irreducible expenditures which French defense establishment must support including 440 billion francs for Indochina and DOTS and perhaps as much as 350 billion francs for other fixed expenditures such as internal security forces, maintenance of existing installations and pensions, amount left to finance build up of French forces in Eur according to NATO plans is only about 400 billion francs. This figure should be compared with roughly 850 to 900 billion francs which would appear to be required on basis of French costing of TCC/SCS force recommendations recently submitted to country team. Conclusion is obvious that tremendous gap will exist even if we recognize that recent French costing is on high side.
On other hand, worst consequences of situation might be avoided if it were possible to accept suggestions made by Labouisse and myself in mytel 3606 Dec 17.3 French might agree to increase the roughly 400 bil francs available within the 1190 bil franc budget for buildup in Europe by at least 80 bil francs or an increase of 20 percent in their Eur program. Such percentage increase would make important change in amount of cutbacks French may be called upon to make in their present plans for buildup in Europe.
The necessity to include substantial revision in mil plans for infrastructure of course complicates this situation seriously, and it is difficult to expect that French will cooperate if demobilization measures and cutbacks in production are necessary for them.
I have been thinking about probable French policy with respect to Eur army when faced with drastic curtailment of mil program along lines outlined to you in mytel 4437 Jan. 25. French are becoming increasingly concerned that US will follow a policy of relying [Page 1145] upon a buildup of Ger forces in Eur to replace French forces continuing burden in Indochina. As a result they can be expected to become more active in pressing for a definite agreement with the Ger s providing that there must be broad equality between French and Ger s inside the Eur Def community. They probably will insist (1) that the 1954 objectives in forces to be agreed upon at Lisbon be substantially same for both countries and that these goals be written into the EDC treaty, and (2) that there be arrangements within EDC common budget making it obligatory for EDC exec to carry out a buildup program for contingents from both countries on progressive basis which would maintain this essential equality. There is, of course, no immediate problem because French have a head start on the Gers, but this situation could quickly become reversed if NAT programs undertaken in 1952 called for a smaller number of contingents of French origin than number of Ger origin in 1954. The French may simply say that they accept the TCC financial and force recommendations and accept to carry the burden of operations in Indochina but that we must help enough to make it possible for them to maintain equality with Ger in Eur if they are to go ahead with arrangements for Ger defense contribution.
In the present situation French may also yield to Ger pressure to include both Indochina expenditures and support costs for US and UK forces in Ger within EDC common budget. Such an arrangement would begin an internationalization of the Indochinese problem and would strengthen French position of insisting that European community be based upon equality between Ger and France.
It is also possible that French will seek tighter guarantee by insisting that forces of Ger nationality cannot be more than 1/5 of NATO forces in Europe.