217. Telegram From the Embassy in Germany to the Department of State0

1215. I met for an hour today with EconMin Erhard. He opened by saying that I would probably read press reports of the Cabinet meeting of yesterday to the effect that he intended to assume an antagonistic attitude toward the Soviets. He assured me that this was not the case—that he was opposed to putting pressure on Khrushchev at this time. Khrushchev now faces both the threat of 700 million hostile Chinese and the demands of his own bourgeois community for a higher standard of living, which are together beyond his capacity to meet. In order to meet them he must build up his economy.

Erhard commented that everyone seems to agree to this, but different interpretations are drawn as to what should be done about it. Some feel that we should take advantage of Khrushchev’s present weakness [Page 585]by allowing his situation to deteriorate to the point where is more amenable. He (Erhard), on the other hand, believes that we should not act as though Khrushchev were weak, but should attempt to negotiate with him.

Adenauer made a statement last evening to the effect that he is opposed to the current wheat sales to the Soviets. Erhard said he approves such sales if they are needed to feed the Russian population. He would not, on the other hand, be in favor of them if they are intended to build up war reserves, as some say, but which he does not himself believe. He wanted to reassure the President on these points.

I told Dr. Erhard that I was sure the President would appreciate hearing his views. I described that results of the talks between FonMinSchroeder and the President and Secretary1 on the question of negotiations with Soviets and reduction of tensions as being very much along the same lines and quite satisfactory to our government. Dr. Erhard said that the German public insists on linking progress in East-West relations with the German problem. There is no distrust of the United States, but we must not give the appearance that the status quo is acceptable.

I advised Dr. Erhard that I had, since our earlier conversation, been authorized by the President to suggest one of two dates for his consideration for his proposed visit to Washington after his inauguration: November 11–14 or November 25–27 (Deptel 920).2 We were for the moment keeping the matter of his visit entirely out of German Foreign Office-Embassy channels and contemplated that no public announcement would be made until after he assumed office. He indicated approval of this procedure and said he would consider the two dates and let me know his choice at the earliest possible moment.

Dr. Erhard continued that he was anxious to talk with the President about the tactics of dealing with Khrushchev. He felt that the economic pressures on Khrushchev are not just for wheat but against his whole economy. If the West and the Soviet Union intensify their trading relations, thereby easing Khrushchev’s position, the West must at the same time obtain certain concessions on the political side. Otherwise, Khrushchev will take their help and once it is no longer needed, will resume his rigid position. The possibility for trade with the Soviets on a payments basis is limited. Their currency is not convertible, which means that all trade must be on a barter basis. They want everything from Germany but cannot give anything in return that a highly developed country like Germany can use. If the Germans extend 5–10 year credits, they [Page 586]would be faced with renewing them indefinitely since the Soviets would not be able to pay.

For this reason, any assistance Germany gives must be in the form of grants as a price for reunification. The Germans would, in his judgment, be willing to make a very considerable sacrifice in this regard if they were assured of positive progress toward reunification. His thinking was that the Germans would contribute industrial installations for the development of Siberia over a period of 10–20 years. In return, Khrushchev could promise a complementary “phased program” involving the wall, reunification, self-determination, and freedom for Germany.

Erhard feels that it would not be appropriate for Germany to suggest such a program, since this would run counter to Russian prestige. It would be better if the U.S. would propose that the Russians be assisted, suggesting that, at the same time, the Russians must show respect for self-determination. To gain this self-determination, the Germans themselves would make the necessary sacrifice, which has up to this point largely been borne by the US. They would convince the Soviets that Germany is not desirous of continuing the cold war.

I said that I had mentioned to the President3 Dr. Erhard’s preliminary views on this subject, which he had expressed to me before I left for Washington. The President looked forward to discussing this matter further with Dr. Erhard when he visits the US. Dr. Erhard’s views on increased trade and assistance to Russia would be of particular interest in the light of the recent Canadian wheat sale and the rapidly changing public attitude in the United States toward trade with the Soviet Union. I did, however, say that the President had suggested that it would be better not to portray German assistance to Russia as something that they owed the Soviets, or something that was in expiation for the war. Dr. Erhard agreed.

I queried Dr. Erhard as to whether he had given any thought to the amounts that might be involved. He replied that this would be dependent on what the Soviets would offer in return, which should amount to something more than a vague hope. He admitted the difficulties of getting any concrete agreement from the Soviets on a phased program for reunification. Khrushchev would maintain that the GDR is a sovereign state and that he could not interfere in its affairs. It was, however, necessary for the Germans to obtain something concrete, if they are to be asked to make the necessary sacrifice.

In response to my query, Dr. Erhard said that he naturally expected to visit Paris after his inauguration. He did not specify the date and I did not press him. He did say, however, that he would not discuss with General [Page 587]De Gaulle the question of German assistance to Russia which he had just raised with me.

Comment: Erhard’s heart is in the right place, but he displays considerable political naivete in the drift of the foregoing conversation. I think we have an opportunity to help him at this stage, and that he will be especially influenced by his conversations with President and other Washington officials.

I do not believe we should discourage Erhard from using his economic tools as means improving atmosphere for East-West negotiations. We should, however, attempt to dissuade him from his tendency to think in predominantly economic terms, and try to get him to look at the Soviet-Western confrontation in broader political and strategic terms.

McGhee
  1. Source: Department of State, Central Files, POL 32–4 GER. Secret; Limit Distribution.
  2. See Document 215.
  3. Telegram 920, October 1, recommended that no formal invitation to Erhard be issued until he actually became Chancellor, but added that the White House preferred November 11–14 or 25–27. (Department of State, Central Files, POL 7 W GER)
  4. See Document 214.