Foreign Relations of the United States, 1958–1960, Western Europe, Volume VII, Part 2

300. National Security Council Report⁰

NSC 6006/1

April 6, 1960.

STATEMENT OF U.S. POLICY TOWARD SCANDINAVIA (DENMARK, NORWAY AND SWEDEN)

General Considerations

Political

1. The Scandinavian countries are of political interest to the United States for several reasons. First, they are regarded throughout the world as prime examples of Western democracy. Second, there are strong cultural, sentimental and family ties between Scandinavia and the United States. Third, because the Scandinavian countries enjoy considerable prestige in the international community, their support of U.S. policy is valuable in international organizations and for general propaganda purposes. Fourth, any Soviet threat to Scandinavian security would create severe apprehension among the other northern European NATO allies who would feel seriously exposed.

2. Democratic institutions and procedures are firmly rooted in Scandinavia. Although the multi-party system can lead to weak coalition cabinets (as is often the case in Denmark), there is no danger in any of the Scandinavian countries that the democratic system will be overthrown from within by leftist or rightist extremists. Communist parties are legal and they hold a few seats in the parliaments of all three countries, but their influence in political affairs is only of a nuisance nature. There is little likelihood that the Communist parties will develop significant strength. On the other hand, as vehicles of subversion and espionage for the Soviet Bloc, they represent a potential menace.

3. The Social Democratic parties (Labor Party in Norway) govern in Norway and Sweden and constitute the largest member of the coalition government in Denmark. The Social Democratic parties are now evolving away from doctrinaire socialism toward a moderate welfare philosophy. The principal other non-Communist parties are the Agrarians, Liberals and Conservatives. Barring some amalgamation of these parties, the Social Democratic parties will continue to be the largest parties for the foreseeable future. In general the Conservative and Liberal parties take a stronger line on increasing defenses and opposing the USSR than the Social Democratic or Agrarian parties.

4. Labor is highly organized in all three Scandinavian countries and Social Democratic control of unions is overwhelming. Although there is Communist influence in some unions, over-all Communist influence is only of a very minor nature and the prevailing feeling is strongly anti-Communist. Scandinavian labor unions are strong supporters of the ICFTU and cooperate closely among themselves and with U.S. labor unions. They are of considerable potential value to the United States in combating Communist labor influence in third countries, particularly Iceland and Finland.

International Relations

5. In foreign affairs not concerning NATO, the Scandinavian countries frequently concert their positions, especially in international organizations and negotiations. On the whole, this Scandinavian solidarity works in favor of the West and, to the extent it is broadened to include Finland, is a definite advantage to the West.

6. With a few notable exceptions, the foreign policies of the Scandinavian countries do not radically diverge from those of the United States:

a. All three countries strongly support the UN and its activities, contributing to the Middle East emergency force, truce commissions, technical and health programs, economic funds, etc. They are among the staunchest supporters of the United States in international organizations, although they favor the admission of Red China to the UN and tend to take a generous attitude toward Soviet Bloc candidacies.

b. Denmark and Norway are firmly committed to membership in NATO. It is extremely unlikely that Sweden would wish NATO to be weakened by their withdrawal. Denmark and Norway are willing to follow U.S. leadership in NATO, but oppose major power directorship. They oppose also NATO commitments which tend to involve them in areas outside Europe, and they become deeply concerned at any indication of the formation of one or more political blocs within NATO, fearing that such a development would weaken NATO unity and lessen their own influence within the alliance. Continuing anti-German feeling complicates their cooperation with West Germany within NATO, but they support West German rearmament as necessary for NATO defense. They have been adamantly opposed to the admission of Spain to NATO.

c. All three Scandinavian countries are ideologically committed to the West and opposed to international Communism and have been firm in rejecting efforts of the Soviet Bloc to create a closed Baltic, or an atomic-free Baltic “zone of peace”. They appear, however, to be susceptible to ideas of disengagement, thinning out of forces and negotiated settlement in continental Europe and are tending toward increased contacts with East Germany.

d. The Scandinavian countries appear to follow a coordinated policy of friendly relations toward Poland in the hope of weakening the Soviet hold on that country.

e. Scandinavian policy toward Finland seems to be based on acceptance of the status quo in which Swedish neutrality is balanced off against Finnish neutrality. Desire not to provoke Soviet reaction on Finland undoubtedly is a factor in Swedish neutrality and Scandinavian caution in building up offensive military strength. Conversely, Soviet restraint with respect to Finland may reflect a desire not to push Sweden into NATO or to accelerate Scandinavian military preparations. Within this context all three Scandinavian countries, but particularly Sweden, support Finland in maintaining its independence and Western ties.

Strategic and Military

7. The geographical position of the Scandinavian countries makes them strategically important to both the North Atlantic community and the Soviet Bloc. They constitute the northern flank of NATO and are in a position from which the exits from the Baltic and Barents Seas can be controlled. But the potential use of Scandinavia as a base for Western retaliatory operations is limited by Swedish neutrality and the unwillingness of Denmark and Norway to permit such use.

8. Soviet domination of Scandinavia would enable the USSR to deploy forces further to the West, thus permitting it to increase the threat to the Western Hemisphere, to threaten operations in the North Atlantic, and to form a protective shield against sea or air attack from the Northwest.

9. The northern island possessions of Denmark and Norway are also of strategic military significance. Greenland has large U.S. air bases and U.S. early warning installations important to U.S. strategic operations and of vital importance to the defense of the continental United States against attack by manned bombers and missiles. In view of its location and the current trend in weapons development, Greenland must continue to be available to the United States for military purposes. Other early warning and navigational installations are located on Jan Mayen (Norwegian) and the Faroe Islands (Danish). The Spitzbergen Archipelago (Norwegian) is demilitarized by treaty. Norway maintains only normal surveillance over the some 3,000 Soviet workers in Spitzbergen who are operating certain uneconomic coal concessions there.

10. In general, U.S. military cooperation with Denmark and Norway is based on NATO plans and force goals. However, the contribution of Denmark and Norway to NATO defense has been handicapped by their limited military power and by certain national attitudes which tend to restrict the effectiveness of their efforts: (a) Neither country is supporting a defense budget which is in keeping with its capabilities or even comparable with that of most other NATO countries in terms of proportion of GNP; (b) both have very limited training and service requirements which tend to reduce the capabilities of their active forces; and (c) a problem of special significance has been presented by Danish and Norwegian refusal to accept the presence of U.S.-controlled nuclear warheads or to agree to the stationing of foreign troops on their soil prior to the threat of attack [2 lines of source text not declassified]. This refusal will tend to limit modernization of Danish and Norwegian forces. In the long run their effectiveness in Western defenses depends on the integration of their military production and force composition within the broader Western defense system.

11. The U.S. grant military assistance program for Denmark amounted to $20.9 million in FY 1959 and it is estimated at $35.1 million for FY 1960. For Norway it amounted to $18 million in FY 1959 and is estimated at $34 million for FY 1960. To ensure effective, modern forces, Norway and Denmark will need to obtain, either through purchase, grant aid, or through participation in coordinated NATO production programs, additional advanced weapons, modern aircraft and naval vessels, and training to complement the matériel program.

12. Sweden has retained its traditional policy of armed neutrality. Even its abortive effort to establish a Scandinavian defense organization in 1949 was merely an effort to expand the geographic scope of armed neutrality. Sweden has established an advanced civil defense and maintained reasonably effective military forces, particularly air forces, based largely on Sweden’s own industrial and natural resources and financed by a relatively high defense budget. These forces are by far the most effective military forces in Scandinavia. The Swedish defense effort undoubtedly has strengthened Sweden’s position in dealing with the Soviet Bloc. Sweden is incorporating missiles into its defense system.¹ Sweden has started basic research on nuclear weapons, and the question has already arisen within Sweden of whether it should develop or otherwise acquire an atomic capability. Without some outside assistance, however, particularly in the form of weapons designs and permission to purchase Western equipment, this process would be costly and lengthy and could result, during an interim period, in a diversion of resources to this purpose which might otherwise be used to sustain Sweden’s present power position, for example, by modernization of its existing forces. If Sweden decides to acquire nuclear weapons, Denmark and Norway might be encouraged to accept nuclear warheads within the NATO framework. Under the present circumstances, Sweden’s membership in NATO is not necessary to Western defense. It would contribute to the over-all defensive strength of the Western powers for Sweden to modernize its defense posture and to establish in Sweden early warning, air control and advanced weapons systems (without nuclear warheads) which are compatible with and complementary to those planned for installation in the territory of neighboring U.S. allies.

13. [5 lines of source text not declassified]

14. The three Scandinavian nations, particularly Sweden, have the most highly-developed civil defense programs in the Free World. In each of these nations the incorporation of shelters in new building construction and registration for civil defense duties are required by law. Civil defense in Sweden and Norway is characterized by large deep rock shelters for elements of the population and industry, and in Denmark by an extensive fallout shelter program.

Economic

15. Denmark, Norway and Sweden all have relatively strong and highly-developed economies, which provide for their people living standards that are among the highest in the world. They have long had “mixed economies” with significant public and cooperative as well as private sectors and extensive social benefits. Their economic systems operate as modified free market economies, but with more government controls than in the United States. They have abandoned the idea of further nationalization of industry. Cornerstones of their economies are iron and wood products in Sweden, agricultural commodities in Denmark, and shipping, fishing and wood products in Norway. The strategic significance to NATO of Scandinavian resources is minor with the exception of the Norwegian merchant marine (which has 10 per cent of world tonnage).

16. All three countries have shared in the prosperity and economic growth which Western Europe has experienced in recent years. The real GNP in these countries has been expanding at a rate somewhat lower than the average for Western Europe but higher than that achieved by the United States. For the past year all three have been in a period of economic upswing, with production and investment expanding rapidly under conditions of relative price stability. The strength of their balance of payments positions is indicated by the substantial recent increases in foreign exchange reserves of all three countries. All three joined the major Western European countries in introducing currency convertibility in December 1958, and all have made substantial progress in relaxing exchange restrictions and reducing trade discrimination.

17. Despite the favorable economic growth and generally high living standards in the Scandinavian countries, the northern regions of Norway and Sweden remain chronically depressed. There are indications that the USSR is interested in expanding economically into this area.

18. Foreign trade plays a major role in each country, exports accounting for about 20–25 per cent of GNP. Trade is directed heavily toward Western Europe: about two-thirds of each Scandinavian country’s exports go to Western Europe. As a result of these strong trade ties, economic conditions in Scandinavia are linked closely to conditions in the rest of Western Europe. Exports to the United States, on the other hand, account for only 8 per cent of total Scandinavian exports.

19. There is no evidence that Scandinavia is regarded by the USSR as an economic prize. Exports to the Soviet Bloc are less than 5 per cent of the total Scandinavian exports despite the Scandinavians’ tendency to favor East-West trade in principle as conducive to international peace and understanding. However, Soviet Bloc markets are important to certain industries, and provide outlets for certain products not readily saleable in other areas. Denmark and Norway participate in the international strategic trade control system through membership in COCOM; Sweden cooperates informally and to a limited degree in the maintenance of this trade control system.

20. There is a high degree of cooperation among the Scandinavian countries, a good part of which extends to Iceland and Finland within the framework of the Nordic Council.² Efforts since the end of World War II to establish a Nordic Common Market have failed in part because of Norway’s fear of Swedish industrial and Danish agricultural efficiency. As a result of the increased interest of the Scandinavian countries, especially Sweden, in a broader free trade area and the formation of the European Free Trade Association (EFTA), further consideration of a Nordic Common Market has been dropped. Interest might revive if the broader free trade area does not work out. One advantage of a Nordic Common Market would be that it might include Finland and thus strengthen that country’s ties with the West.

21. The relatively small size of their economies and their dependence on Western European trade makes the Scandinavian countries apprehensive about the formation of exclusive economic blocs within Europe, such as the European Economic Community (EEC). Following the formation of the EEC, the Scandinavian countries have joined in forming the EFTA in the hope that it can expand into an OEEC-wide free trade area, embracing the EEC and thus protecting their vital markets in the EEC. The particular form of the Scandinavian countries’ trade relations with the Free World are of little direct economic importance to the United States per se because of the limited U.S. commercial interests in Scandinavia, although the United States is opposed in general to proliferation of preferential trading areas. But the maintenance of prosperous, Western-oriented economies in Denmark, Norway and Sweden is important to the realization of the basic U.S. policy objective of a strong, democratic and united Western Europe.

22. Certain aspects of our economic policies create difficulties from time to time in our relations with each of the Scandinavian countries. In the case of Norway it has been U.S. shipping policies (subsidies, flags of convenience, 50–50 clause); in Denmark our agricultural import restrictions and surplus sales overseas; and in all three countries our anti-trust and anti-dumping legislation.

Objectives

23. Independent Scandinavian countries:

a. With democratic institutions.

b. With stable, prosperous economies oriented toward the non-Communist world.

c. Friendly to the United States and actively opposing Communist influence in the Baltic and Scandinavian area, particularly in Finland.

d. Supporting U.S. positions on major international issues.

24. Effective and equitable participation by Denmark and Norway in NATO.

25. Continued availability for U.S. military purposes of facilities on Danish and Norwegian territory, especially Greenland; denial of military facilities to the Soviet Bloc.

26. A Sweden willing and able to withstand Soviet political pressures and to resist Soviet military pressures.

Major Policy Guidance

27. Carry out U.S. commitments under NATO to come to the defense of Denmark and Norway in the event of aggression.

28. In the event of general war with the Soviet Bloc (a) seek to prevent Sweden, as long as it remains neutral, from giving any assistance to the Soviet Bloc, and (b) encourage and assist Sweden, without prejudice to U.S. commitments to NATO, to resist Soviet Bloc attack against Sweden. In the event of Soviet Bloc aggression against Sweden alone, be prepared to come to the assistance of Sweden as part of a NATO or UN response to the aggression.⁴ In the event of Communist domination of Finland, consider promoting Sweden’s membership in NATO. Maintain and encourage selected NATO powers individually to maintain discreet liaison with the Swedish military establishment as the basis for possible future active military cooperation.⁵

29. Encourage the Scandinavian countries to support a firm Western political and military position as a deterrent to Soviet Bloc aggression and as a prerequisite to the negotiation of an acceptable and stable modus vivendi in Europe. Stress the danger to Scandinavian and Free World security of unilaterally neutralizing or demilitarizing Scandinavia.

30. Encourage cooperation among the Scandinavian and Nordic countries (Scandinavia plus Finland and Iceland), particularly in assisting Finland to oppose Soviet pressure and maintain its Western ties.

31. Seek Scandinavian support in denying membership in the UN and specialized international agencies to Red China and the puppet Communist governments of East Germany, North Viet Nam, North Korea and Outer Mongolia. Urge the Scandinavian countries against inadvertently bringing about a condition of de facto recognition of the so-called German Democratic Republic through increasing commercial, cultural and technical contacts.

32. Cooperate as appropriate with Scandinavian initiatives in Poland as a means of strengthening that country’s position vis-à-vis the USSR.

33. Bearing in mind Scandinavian sensitivities as regards Germany and the Franco regime in Spain, seek to persuade key officials and opinion leaders of the importance to Western European security of cooperating with West Germany within NATO and of accepting Spain as a NATO member.

34. Seek the development by Denmark and Norway of modern, efficient military forces which are in keeping with their capabilities and which support NATO objectives. To this end:

a. Maintain discreet pressure, principally through NATO and SHAPE, on Denmark and Norway to increase their defense budgets to an equitable level with other NATO members, [2–1/2 lines of source text not declassified] and to establish longer periods of military service.

b. Provide military assistance to Norway and Denmark where such assistance significantly furthers the attainment of NATO goals, continuing to seek through cost-sharing and other techniques to maximize Norway and Denmark’s own contribution.⁶

35. a. Provide no grant military assistance to Sweden. However, be prepared to sell to Sweden military matériel, and to provide training to Sweden on a reimbursable basis. With due regard to NATO requirements, and provided that prior offer to NATO allies has been made, be prepared to sell to Sweden modern weapons systems from NATO or U.S. production or to authorize licensing arrangements for manufacture in Sweden. However, do not provide nuclear warheads; and discourage Sweden from producing its own nuclear weapons.

b. Through such means as those referred to in a above, seek the establishment by Sweden of early warning, air control and advanced weapons systems which are compatible with and complementary to those planned for installation in the territory of neighboring U.S. allies.

36. Make every effort to ensure the continued availability to the United States of military facilities located on the territory of Denmark and Norway, utilizing to this end our NATO relationship with them. In this regard give special attention to continued acceptance by the Danish Government of our presence in Greenland.

37. Urge Norway to maintain effective surveillance of Soviet activities in Spitzbergen, [less than 1 line of source text not declassified]. Be prepared to concert with Norway and other interested nations in protesting any Soviet violations of the demilitarization provisions of the 1920 Treaty and in refusing to consider any revision of the Treaty that would permit the establishment of Soviet political authority or military bases in the Archipelago.

38. Seek the denial or limitation of exports of strategic commodities from these countries to the Sino-Soviet Bloc, and their avoidance of undue dependence on trade with the Sino-Soviet Bloc, in accordance with U.S. economic defense policy. Encourage effective participation by Denmark and Norway in international strategic trade controls of COCOM.

39. Encourage the Scandinavian countries to facilitate the flow of U.S. and Free World private investment capital for the development of private enterprise in these countries.

40. Encourage the Scandinavian countries to undertake projects to improve the depressed areas of Northern Scandinavia.

41. Encourage the Scandinavian countries to contribute to the strengthening of the less-developed countries by supplying increased amounts of public capital and by facilitating movement of private capital to these countries.

[Attachment]

⁷

FINANCIAL APPENDIX

[Here follow two full-page tables on current or projected U.S. authorizations for Scandinavia.]

DEFENSE COMMENTS

I. FY 1950–1959

A. Denmark

Military Assistance Fiscal Data

Total grant military assistance for Denmark as of 30 June 1959 amounted to $511.5 million, of which $434.9 million had been delivered by that date.

In addition, as of 30 June 1959, excess stocks (not chargeable to the Military Assistance Program) with an acquisition cost of $16.6 million had been programmed, $10.3 million of which had been delivered by that date.

Denmark has also benefited from military assistance offshore procurement (OSP). OSP obligations as of 30 June 1959 amounted to $25.6 million, of which $16.8 million had been expended by that date.

Forces

Mutual Security Forces for Denmark are:

• 4 Infantry Divisions
• 75 Naval Vessels
• 7 Air Squadrons
• 1 Surface-to-Surface Missile Squadron (Mace)
• 2 Surface-to-Surface Missile Bns. (Honest John)
• 2 Surface-to-Air Missile Bns. (Nike)
• 1 Surface-to-Air Missile Bn. (Hawk)
• 2 8" Howitzer Batteries (Atomic)

U.S. Military Commitments

U.S. military commitments to Denmark stem from our joint membership in the North Atlantic Treaty Organization.

Military Assistance Program Content

The Military Assistance Program has greatly assisted in strengthening the Danish forces by delivery of tanks, transport vehicles, artillery, aircraft, escort vessels, mine warfare vessels, special electronics equipment, and ammunition. The grant military assistance programmed during the period FY 1950–1959 included the following major categories of equipment:

Aircraft, components, spares and related support equipment (includes 240 F–84 and 56 F–86 aircraft)	$ 113	million
Ships and harbor craft, components and spares (includes 2 minelayers, 12 minesweepers, and 2 patrol escort vessels)	$ 54	million
Tanks, other vehicles, weapons, components and spares (includes approximately 290 tanks and 3,900 trucks)	$ 101	million
Ammunition (training and war reserve)	$ 90	million
Guided missile systems, components, and spares (for a Nike and an Honest John missile battalion)	$ 40	million
Electronics and communications equipment, components and spares	$ 37	million

Cost-Sharing Programs

Denmark has benefited from the U.S. contribution to NATO Infrastructure Program with total expenditures of $17.3 million as of 30 June 1959. In addition, the United States and Denmark signed an agreement in FY 1959 for the construction in Denmark of 23 small naval craft over a five-year period, with costs to be shared equally between the United States and Denmark. $10.2 million of military assistance has been programmed through FY 1959 as the U.S. contribution to the cost-sharing shipbuilding program.

Military Sales Program

During the period FY 1950–1959, Denmark placed orders with the U.S. Military Departments for purchase on a cash dollar basis for $3.5 million of equipment under the Mutual Security Military Sales Program, of which $2.4 million had been delivered by 30 June 1959.

Analysis of Expenditure Trends

The average annual expenditure level for the period FY 1958–1960 is less than half the average annual expenditure level for the previous five fiscal years (FY 1953–1957). Inasmuch as the NATO requirements for the Danish forces have never been fully met, the declining level of expenditures is attributable to the over-all decline in the availability of military assistance funds and the increased demands upon these funds for other countries. The estimated increase in FY 1960 expenditures, as compared with FY 1958 and FY 1959, is due to the delivery of Honest John and Nike missiles.

B. Norway.

Military Assistance Fiscal Data

Total grant military assistance for Norway as of 30 June 1959 amounted to $679.7 million, of which $603.7 million had been delivered by that date.

In addition, as of 30 June 1959 excess stocks (not chargeable to the Military Assistance Program) with an acquisition cost of $19.0 million had been programmed, substantially all of which had been delivered by that date.

Norway has also received benefits from military assistance offshore procurement (OSP). OSP obligations were $48.7 million as of 30 June 1959, of which $26.5 million had been expended by that date.

Forces

Mutual Security Forces for Norway are:

• 3–1/3 Infantry Divisions
• 46 Vessels
• 1 ASW Patrol Squadron
• 9 Air Squadrons
• 2 Surface-to-Surface Bns (Honest John)
• 2 Surface-to-Air Bns (Nike and Hawk)

U.S. Military Commitments

U.S. military commitments to Norway stem from our joint membership in the North Atlantic Treaty Organization.

Military Assistance Program Content

The Military Assistance Program has greatly assisted in strengthening the Norwegian forces by delivery of tanks, transport vehicles, artillery, aircraft, escort vessels, mine warfare vessels, special electronics equipment, and ammunition. The grant military assistance programmed during the period FY 1950–1959 included the following major categories of equipment:

Aircraft, components, spares and related support equipment (includes 176 F–86 aircraft)	$177	million
Ships and Harbor craft, components and spares (includes 9 minesweepers, 2 minelayers and 10 motor torpedo boats)	$52	million
Tanks, other vehicles, weapons, components and spares (includes 113 light tanks and approximately 3,500 trucks)	$119	million
Ammunition (war reserve and training)	$137	million
Guided missile systems, components and spares (including an Honest John and a Nike battalion)	$55	million

Cost-Sharing Programs

Through FY 1959 Norway received $41.4 million of U.S. assistance under the NATO Infrastructure Program. In addition, Norway participates in the Mutual Weapons Development Program (MWDP) and the Weapons Production Program (WPP). Expenditures through 30 June 1959 were $2.5 million for MWDP and $0.8 million for WPP.

Military Sales Program

During the period FY 1950–1959, Norway placed orders with the U.S. Military Departments for the purchase on a cash dollar basis for $2.5 million of equipment under the Mutual Security Military Sales Program, of which $2.2 million was delivered by 30 June 1959.

Analysis of Expenditure Trends

The expenditure level for FY 1958 was comparable with the average annual expenditure for the five preceding fiscal years. There was a sharp decline in FY 1959 because of the over-all decline in the availability of military assistance funds and increased requirements elsewhere in the world. The estimated expenditures for FY 1960 show an upward turn resulting from the delivery of Honest John and Nike missiles, although the estimated FY 1960 expenditures will still be only about half the annual expenditure level for the FY 1953–1957 period.

C. Sweden

Sweden does not receive grant military assistance and is not joined with the United States under any collective security agreement. As a result, U.S. assistance is limited to the cash dollar sale of equipment under the provisions of the Mutual Security Military Sales (MSMS) program.

Sweden purchased $10.7 million of equipment on a direct cash basis from the U.S. Military Departments under the MSMS program through 30 June 1959, of which $0.3 million was delivered by that date. Most of the purchases occurred in FY ($10.2 million for 2,000 Sidewinder missiles).

In December 1959, Sweden expressed interest in purchasing in the United States or in manufacturing in Sweden certain advanced U.S. weapons including Hawk, Bomarc, Falcon, and Sidewinder missiles. Final action has not yet been taken.

II. FY 1960–1963

A. Denmark

Military Assistance, FY 1960–1963:

Military Assistance for the period FY 1950–1959 was predominantly in the form of grant assistance for conventional weapons for the initial equipping of the Danish forces. Some advanced weapons, including Nike and Honest John missiles, were programmed in the FY 1950–59 period. During the next few years, Military Assistance will be primarily directed toward (1) continuation of the equipping of the Danish forces with advanced aircraft and missile systems, (2) the replacement and modernization of obsolete or worn out conventional equipment, and (3) inducing an increase in and better utilization of Danish defense resources through cost-sharing programs.

The estimated program for FY 1960 includes 17 F–100 aircraft, a fifty percent U.S. contribution toward the construction of two minesweepers and a submarine in accordance with the U.S.-Danish cost-sharing agreement, missile spare parts and components, ammunition, and training assistance.

The proposed FY 1961 program contains 17 F–100 aircraft, a fifty percent U.S. contribution toward the construction of two escort destroyers and two minelayers, rehabilitation costs for two minesweepers to be redistributed from Norway, spare parts, ammunition and training assistance.

The projected programs for FY 1962–1963 include Nike, Hawk, Honest Johns, and Sidewinder missiles; light tanks, armored personnel carriers, self-propelled artillery, and other combat vehicles; F-104 and F–100 aircraft; ammunition; spare parts and engine overhaul; naval vessels; and training assistance. A significant portion of the naval vessels, aircraft, and missiles will probably be provided through Danish-U.S. and/or NATO cost-sharing programs.

Assumptions:

No major changes are projected in the force structure or mission of the Danish forces. The ability of the Danish forces to assist in closing the exits of the Baltic to Soviet submarines will continue to be of security interest to the United States.

The estimates assume that Denmark will not become “financially able to pay” for military equipment within the terms of NSC Action No. 2158 during the period covered by this Financial Appendix.⁸

Fiscal Analysis:

A total grant assistance program of $203 million is projected for FY 1960–FY 1963 to assist Denmark in the attainment of its NATO goals (paragraph 33).

The undelivered balance of grant aid military assistance programmed as of June 30, 1959, was approximately $70 million. This balance plus the projected FY 1960–1963 programs of $203 million would result in projected expenditures of $198 million over the FY 1960–1963 period, leaving an undelivered balance of $75 million as of June 30, 1963.

Expenditure Trends:

The annual expenditure level for the period FY 1958 and FY 1959 was less than half the average annual expenditure level of the previous five fiscal years. Inasmuch as the NATO requirements for the Danish forces have never been fully met, the decline in FY 1958 and FY 1959 expenditures was primarily attributable to the over-all decline in the availability of military assistance funds and the increased demands upon these funds for other countries. Expenditures are expected to return to the pre-FY 1958 level in the FY 1960–1963 period because of the increased cost of the more modern weapons systems included in the current and projected programs.

B. Norway

Military Assistance FY 1960–1963:

Military Assistance for the period FY 1950–1959 was predominantly in the form of grant assistance for conventional weapons for the initial equipping of the Norwegian forces. Some advanced weapons, including Nike and Honest John missiles, were included in the FY 1958 and FY 1959 programs. During the next few years, military assistance will be primarily directed toward: (1) the continuation of the equipping of the Norwegian forces with advanced aircraft and missile systems, (2) the replacement and modernization of obsolete or worn out conventional equipment, and (3) inducing an increase in and better utilization of Norwegian defense resources through cost-sharing programs.

The estimated program for FY 1960 includes 25 F–86F aircraft, six maritime patrol aircraft, a minelayer, electronic equipment, missile spares, ammunition, and training assistance.

The proposed FY 1961 program includes a fifty percent U.S. contribution toward the construction of two submarines; 12 advanced reconnaissance aircraft; 10 F–86F attrition aircraft; four maritime patrol aircraft; missile spares and components; ammunition; and training assistance.

The projected programs for FY 1962–1963 include SS 10/11, Honest John, and Hawk missiles, destroyers and submarines, RF–104 and maritime patrol aircraft, armored personnel carriers, medium tanks, special purpose vehicles and helicopters, ammunition, spare parts, and training assistance. A significant portion of the aircraft, naval vessels and missiles will probably be provided through U.S.-Norwegian and/or NATO cost-sharing programs.

Assumptions:

No major changes are currently projected in the force structure or the mission of the Norwegian forces. The ability of the Norwegian forces to provide surveillance and assist in closing the exits of the Baltic to Soviet submarines will continue to be of security interest to the United States.

The estimates assume that Norway will not become “financially able to pay” for military equipment within the terms of NSC Action No. 2158 during the period covered by this Financial Appendix.⁹

Fiscal Analysis:

A total grant assistance program of $207 million is projected for FY 1960–FY 1963 to assist Norway in the attainment of its NATO goals (Paragraph 33).

The undelivered balance of grant military assistance programmed as of June 30, 1959, was approximately $33 million. This balance plus the projected FY 1960–1963 programs of $207 million would result in projected expenditures of $185 million over the FY 1960–1963 period, leaving an undelivered balance of $55 million as of June 30, 1963.

Expenditure Trends:

The expenditure level for FY 1958 was comparable with the average annual expenditure level for the five preceding fiscal years. There was a sharp decline in the FY 1959 expenditures resulting from the over-all decline in military assistance funds and increased requirements elsewhere in the world. The estimated expenditures for FY 1960–1963 show an upward turn because of the increased cost of the more modern weapons included in the current and projected programs.

C. Sweden

Military Assistance, FY 1960–1963:

It is not currently envisaged that U.S. grant military assistance will be provided to Sweden in the FY 1960–1963 period.

0. Source: Department of State, S/S–NSC Files: Lot 63 D 351, NSC 6006 Series. Secret. NSC 6006/1 comprised a cover sheet; a memorandum of transmittal from Executive Secretary Lay, dated April 6, which noted that the statement of policy had been approved by the President on that day; a table of contents; a statement of policy; and a financial appendix. Only the statement of policy and part of the appendix are printed here.

   NSC 6006, March 14, was amended by the NSC at its 439th meeting on April 1. The discussion was confined to paragraphs 28, 35, 41, and 42. The memorandum of discussion is in Eisenhower Library, Whitman File, NSC Records.

   NSC 6006/1 was rescinded by President Kennedy on May 2, 1962. (Department of State, S/S–NSC Files: Lot 63 D 351, NSC 6006 Series)

1. In FY 1959 Sweden purchased $10.2 million worth of Sidewinder missiles from the United States. In December 1959 Sweden expressed interest in purchasing in the United States or in manufacturing in Sweden certain advanced U.S. weapons. [Footnote in the source text.]
2. The Nordic Council is a consultative body of parliamentary and governmental representatives of the five Northern European countries—Denmark, Finland, Iceland, Norway and Sweden. It was established in 1952 to provide a unifying framework for the many cooperative activities among these countries in the social, economic, cultural and political fields. [Footnote in the source text.]
4. By NSC Action No. 2332–c (approved by the President on November 10, 1960) the National Security Council concurred in the recommendation of the NSC Planning Board that the policy set forth in the second sentence of the new paragraph be subject to the understanding that this language is intended to provide the basis only for unilateral U. S. planning and not for planning within NATO. [Footnote in the source text that was not in NSC 6006. See also footnote 5 below.]

5. In NSC 6006, this paragraph reads: “Be prepared to come to the defense of Sweden against Soviet Bloc aggression, if possible in cooperation with appropriate NATO countries.” This paragraph was deleted during the NSC discussion on April 1, and the Department of State asked to study the matter further. The subsequent paragraphs were renumbered accordingly.

   In September 1960, the Department of State reported to the NSC Planning Board on the question and the Planning Board drafted the language printed here as paragraph 28. The subsequent paragraphs were again renumbered accordingly. A memorandum of the discussion of this paragraph at the 466th meeting of the NSC on November 7 is in Eisenhower Library, Whitman File, NSC Records. The President approved the new paragraph on November 10.

6. On December 23, 1959, the President approved NSC Action No. 2158, which directed the Secretaries of State and Defense, in consultation with other departments and agencies as appropriate, to take steps that would achieve, at the earliest feasible time, the ultimate objective that new commitments for the provision of military equipment on a grant basis should not be offered to nations which are financially able to pay for such equipment. Although it has been determined that Denmark and Norway are not now “financially able to pay” in this context, this matter remains under review. [Footnote in the source text.]
7. Secret.
8. The financial capability of Denmark remains under review. The Treasury Department believes that there is a reasonable likelihood that Denmark may be determined to be “financially able to pay” during this period. [Footnote in the source text.]
9. The financial capability of Norway remains under review. The Treasury Department believes that there is a reasonable likelihood that Norway may be determined to be “financially able to pay” during this period. [Footnote in the source text.]