319. Telegram From the Department of State to the Embassy in Austria0

1011. Following based on uncleared memorandum of conversation between Secretary and Foreign Minister Kreisky September 23.1


Vienna Memorandum.

Kreisky said that following discussions with oil companies both Vienna and New York2 there now seemed to be chance to obtain solution by end this year. Principal problem for Austrian Government was to find method and form of solution which would not be unpopular in Austria and which would thus not cause political difficulties for present coalition Government. Kreisky said he had told oil companies that their compensation claims were “too high” and that in negotiating compromise companies must accept some political responsibility, particularly as they are using US and UK Ambassadors in Vienna as channel in negotiations. Kreisky indicated that differences between Austrian Government and oil companies very narrow on some questions and he stated that Austria was proposing permanent cooperation between US and UK oil companies and Austrian oil administration. While this permanent cooperation might cause difficulties with Soviet Union, this was calculated risk he was prepared to take. Kreisky said that he hoped to be able to prepare more definitive views on issues yet unsettled during short period he would be in Vienna before going Moscow.3

Secretary said US did not intend inject itself into negotiations between Austrian Government and private oil companies. However, negotiations have dragged out for several years and now necessary to reach settlement. He stressed that US Ambassador Vienna had not injected himself into details of negotiations but had only expressed hope [Page 813] to Austrian Government that Vienna Memorandum would be settled without delay. Pointing out that oil companies have had world-wide experience and thus fully aware of political responsibility, Secretary stressed that since this is matter between private companies and Austrian Government USG could not inject itself into political phase. He said he was encouraged by Kreisky’s remarks regarding settlement by end this year.


Counterpart releases.

Kreisky referred to blocking of counterpart releases. While Vienna Memorandum and counterpart release not directly connected, nonetheless, public opinion believed that we had blocked counterpart release pending Vienna Memorandum settlement and this not good for US-Austro relations. He stressed that within his own party there was great sensitivity and resentment over political pressures. Kreisky indicated that while he not pressing for immediate change in our policy, he desired point out its adverse effects. Secretary did not comment on Kreisky’s exposition beyond indicating his understanding Kreisky would develop matter more fully with Under Secretary.


South Tyrol.

Kreisky spoke at great length on South Tyrol question and referred to Pella’s UNGA speech as “strong and unfriendly.”4Kreisky said that his own mention of South Tyrol problem before UN was understatement and was necessary to show Austria and people in South Tyrol that Austrian Government was ready to do something about situation.5 If Italians did not take steps soon to correct problem, situation regarding South Tyrol might become more serious. Austria willing continue negotiations, but there was limit. If Italy unwilling grant autonomy Bolzano Province and situation has not improved by next year, Austria will be forced refer matter to UN. Only in this manner will Austria be able to resist existing pressures in Austria and South Tyrol for self-determination. Kreisky realized that this was extremely delicate question for US but expressed hope US could help restrain “terrible arrogance” with which Italy dealing this question.

Secretary said that while we regretted disagreement between two friends, we believed this could best be resolved by bilateral negotiations between Austria and Italy. We thought referring question to UN would only contribute to increasing tensions and making situation more difficult. Secretary inquired whether this was not issue which might be [Page 814] placed before ICJ where it could be argued with less heat than in UN. Kreisky said that while he prepared consider this idea, uncertain whether Austrian political situation would permit it. He could not promise that question might not eventually go to UN. Department on September 24 gave Italian Embassy substance of Secretary’s comments on South Tyrol question.


Hungarian Problem.

Kreisky alluded to desirability of normalizing relations between Austria and Hungary but indicated difficult to do so unless Hungarians took substantial steps such as permitting Munro to enter Hungary to carry out his UN mandate and permitting Cardinal Mindszenty to leave Budapest. He had in mind to speak to Mikoyan during his forthcoming visit to Moscow in hope that Russians, believing normalization Austro-Hungarian relations desirable, would pressure Hungarians into making substantial moves. Kreisky inquired whether USG would agree to such move.

Secretary indicated that it was difficult for us to judge desirability such move and thought that this was matter for Austrian decision.


Nuclear Testing Control Headquarters.

Kreisky expressed gratification on Big Power decision establish control headquarters in Vienna if and when set up. He said presence IAEA and possibly control headquarters in Vienna provided security to Austria against Soviet bloc and also contributed to Austria’s self-confidence. In response to question on nuclear testing suspension negotiations, Secretary said that principal stumbling block at present is makeup and tasks of control organization. He outlined to Kreisky present status.

  1. Source: Department of State, Central Files, 263.0041–A/9–2459. Confidential. Drafted by Stabler, cleared by Cameron and Calhoun, and approved by White.
  2. After attending the 14th session of the U.N. General Assembly, Foreign Minister Kreisky traveled to Washington on September 23. He met with Secretary Herter at 2:30 p.m. and with Under Secretary Dillon at 3:30 p.m. on September 23. At 3 p.m. on September 24, he led an Assistant Secretary of State for European Affairs White. He then left for Vienna. Briefing memoranda for Herter, Dillon, and White, and full memoranda of conversation recording the meetings between Herter and Kreisky and Dillon and Kreisky, all dated September 23, are ibid., Austria Desk Files: Lot 68 D 123.
  3. Telegram 962 to Vienna, September 21, transmitted an account of Kreisky’s meeting with representatives of the oil companies in New York. (Ibid., Central Files, 263.0041–A/9–2159)
  4. Kreisky accompanied President Schaerf on a State visit to Moscow October 5–15; a report on the visit was transmitted in dispatch 504 from Vienna, November 2. (Ibid., 763.11/11–259)
  5. For text of Pella’s speech before the 80th Plenary Meeting of the U.N. General Assembly, September 23, 1959, see Official Records of the General Assembly, Fourteenth Session, 15 September–13 December 1959, pp. 120–124.
  6. For text of Kreisky’s speech before the 800th Plenary Meeting of the U.N. General Assembly, September 21, 1959, see ibid., pp. 39–40.