32. Memorandum From the Officer in Charge of Western European Affairs (Tyler) to the Assistant Secretary of State for European Affairs (Elbrick)1
SUBJECT
- Visit of Deputy Soviet Premier Mikoyan to Austria
Discussion
Deputy Premier Anastas I. Mikoyan will visit Austria from April 23 to April 27. According to press reports his visit will include a trip through the provinces and a visit to the nationalized Voest Steel Works at Linz. Mikoyan’s visit originally scheduled for last November, was postponed at Austrian request because of the Hungarian revolt. As now timed, the visit will precede the Austrian elections for president scheduled for May 5.
[Page 48]Chancellor Raab announced February 26, 1957 that he intended to discuss with Deputy Premier Mikoyan the reduction of Austrian compensation shipments to the Soviet Union required by the State Treaty. These shipments amount annually to $25 million of goods of various kinds and one million tons of crude oil with a value of approximately $18 million. The crude oil deliveries are especially burdensome to Austria in view of the decline in Austrian crude oil production from 3.7 million tons to 3.4 million tons and the anticipated future annual decline of 5 to 10 per cent unless new drilling can develop new Austrian proved reserves.
On March 19, 1957, the Embassy reported that Mikoyan’s visit might be postponed again because of Soviet dissatisfaction with the Chancellor’s speech raising the question of reductions in Austrian compensation shipments and because the Soviets considered that possible involvement of Mikoyan’s visit in the Austrian Presidential campaign might make the trip undesirable.2 However, the Austrians asked that Mikoyan come as scheduled, apparently because Chancellor Raab is determined to obtain alleviations in Austrian compensation shipments. The Embassy has long felt that Raab wished to go down in history not only as the Chancellor who negotiated the Austrian State Treaty but also as the Chancellor who obtained considerable reduction in the burdens imposed by the Treaty. The Embassy also believes that Raab is convinced that the successful conclusion of the State Treaty is evidence that he can negotiate successfully with the Russians. In arranging the visit, the Soviets hinted that discussions of reductions in Austrian compensation shipments could only be discussed in Moscow and that Austria must first demonstrate greater adherence to its neutrality policy. The Soviets apparently indicated that such discussions should be held six months to a year from now.
Soviet relations with Austria have deteriorated in recent weeks because of Minister of the Interior Helmer’s expulsion of the World Peace Council Secretariat in February and the award of a decoration to an Austrian gendarme who killed a Soviet soldier who crossed into Austria in pursuit of fleeing Hungarian refugees. Some Austrian leaders consider these actions needless provocations of the Soviets.
The Embassy anticipates that Mikoyan will raise the banning of the World Peace Council Secretariat, the general deterioration of Austro-Soviet relations and Austrian actions during the Hungarian uprising. Mikoyan might also offer a loan for reconstruction of former Soviet operated plants in Austria and modernization of the Vienna transport system, as he was reported ready to do last fall. The Austrians, for their part, are preparing their case for a request [Page 49] for reduction in compensation shipments but are not hopeful that Mikoyan will give them much satisfaction.
On our part we have authorized the signature of agreements for a $15 million PL 480 Title I program and a $10 million special Title II program for assistance to Hungarian refugees. The agreements can not be concluded before Mikoyan’s visit as the Austrian Cabinet is in recess for Easter, but we have suggested the Embassy leak the news of the agreements to strengthen the Austrian position and offset the favorable propaganda which would result from any concessions which Mikoyan might make.