Foreign Relations of the United States, 1964–1968, Volume XII, Western Europe

217. Memorandum of Conversation¹

Washington, September 21, 1968, 11 a.m.

SUBJECT

• Renewal of Defense Agreement

PARTICIPANTS

• Spain
  • His Excellency Fernando Castiella, Minister of Foreign Affairs of Spain
  • His Excellency the Marquis de Merry del Val, Ambassador of Spain
  • The Honorable Ramon Sedo Gomez, Under Secretary of Foreign Affairs of Spain
  • The Honorable Nuno Aguirre de Carcer, Director General of American and Far Eastern Affairs, Spanish Foreign Ministry
• United States
  • The Secretary
  • Mr. John M. Leddy, Assistant Secretary for European Affairs
  • Mr. George W. Landau, Country Director for Spain and Portugal

The Foreign Minister said that the problem facing us was the renewal of the base agreements. We were talking about the following:

1. Torrejon—the importance of this base was so great that there was no need to further mention it;

2. Zaragoza presently in caretaker status;

3. Moron, which was important; and

4. Rota, which probably was the most important of all U.S. bases.

[3 paragraphs (21 lines of source text) not declassified]

In addition to all this, the U.S. has the full cooperation and friendship of the Spanish people and their military. This [2-1/2 lines of source text not declassified]. Spain cooperated during the Palomares accident in keeping it as quiet as possible. The Foreign Minister said he just wanted to mention all this to let the Secretary know what Spain offers and that all this should be compared with the U.S. offer of 1968. What is Spain receiving for all these risks? The Foreign Minister said that all the U.S. offered was around $20 million per year. Perhaps by some tough negotiations this could be increased to 30 or even 40 million dollars, mainly in used equipment, some of it with very late delivery dates. On top of this the U.S. offers only a very reduced security guarantee. The Foreign Minister said he could not ask the Spanish people to accept this offer and if the Secretary were in his shoes, he would not consider signing such a deal which does not adequately reward Spain’s friendship.

The Secretary replied that the U.S. valued Spanish cooperation but wanted to stress that all installations we had in Spain were mutually advantageous to both countries. Spain too was interested in U.S. troops and the presence of the Sixth Fleet. Thanks to the Foreign Minister’s skill, Spain had improved her relations with the European countries and with the Western Hemisphere but this improvement was partly based on Spain’s relationship with the U.S.. Now the situation, according to the Foreign Minister, is more dangerous in 1968 than it was before. In that case, our presence is more valuable to Spain and it is more important for Spain to have U.S. troops in Europe and to have the Sixth Fleet remain in the Mediterranean.

The Foreign Minister said that he valued the U.S. contribution and that he was aware of the protection it afforded Spain but with the protection goes the increased risk for Spain. If Spain did not renew the security arrangements the Sixth Fleet would remain and 250,000 men would remain in Europe. Spain would at the same time not have to take any risks. The Secretary said that the risk came from the enemy and that if the U.S. were not present the risk would be much greater. The Secretary said that in a friendly way he wanted to make it clear that he took exception to the Foreign Minister’s remarks. He said this was not a responsible position to take.

The Secretary added that the U.S. also had made enormous financial contributions to Spain by building the bases and moreover Spain derived a considerable balance of payments advantage from the presence of our troops in Spain. In other countries we have offset arrangements; we have never asked Spain for one. The Secretary said that we are working under the assumption that both sides would reach agreement to their best mutual advantage and that there should be no fundamental qualitative changes in the agreement.

The Secretary said that he had seen a draft letter prepared by Treasury officials which clearly explained that our balance of payments program was not working against Spain and that the levels of U.S. investment in Spain were not expected to change. Spain would not derive any advantage from changes in reclassification to a different schedule because the Treasury had to look at all applications for Spain. The Secretary said that he was willing to sign this letter. The Foreign Minister allowed that he was grateful that progress had been made on this issue.

The Secretary said that on the matter of military assistance he was reluctant to say what he was about to say because if revealed he would be in deepest trouble. We were trying our best to be as forthcoming as we could to the Spanish request. The dollar figure which we gave the Spanish is the highest considering what pressure we are under. Out of the funds of the Department of Defense and our military assistance program we must finance “a hot war” in Southeast Asia, not only in Vietnam but also in Thailand, Laos and Korea. We have tried through internal arrangements within the Executive Branch to fund the request through the Department of Defense where the budget is concealed in another budget. If Spain would buy what we offer in the United Kingdom, France or the USSR, the equipment would cost between $400 and $600 million. If Spain were to manufacture it herself, it would cost many billions. The Secretary said that he was certain that the Spanish military and the U.S. military could work out the package and that we were meeting substantially Spanish requests.

The Secretary said that there would also be severe political repercussions if the U.S. and Spain were not able to reach agreement. He said a number of countries important to Spain would react in a negative way, for example, Turkey, Italy, Greece and Germany. These countries consider an agreement between the U.S. and Spain important. Only De Gaulle would be delighted. Moreover, at home we would be in deep trouble with Congress because Senators would say that if we had offered an open, cooperative and generous deal to Spain and if there were no agreement it would be tantamount to a Spanish confiscation of bases in disguise.

The Foreign Minister said that he would like to remind the Secretary that Spain too had made important sacrifices in the establishment of the bases. Millions of dollars had been spent in expropriating land and the bases had not been profitable for Spain. The Foreign Minister said he appreciated the efforts made about rectifying the existing discriminatory situation on the balance of payments problem by the offer to issue a letter. Castiella then said that he agreed with the Secretary that if no agreement were reached it would cause international concern but by the same token, it would enhance Spanish prestige because it no longer could be considered as a satellite of the U.S. but as a free and independent country. Moreover, internally a part of the Spanish people would applaud the end of the agreement if the American proposals were insufficient.

The Secretary replied that on the question of prestige Spain would have to choose. Of course, Nasser, Boumedienne and Tanzania would applaud non-renewal. But the prestige would go down in Western Europe, in Japan, in India and even in Yugoslavia and Spain had to choose where it wanted its prestige.

The Secretary suggested that the possibility existed that both sides were the prisoners of artificial military figures and maybe in the upcoming talks we should not use figures but talk about equipment. In this way we could talk about some increases in military assistance and the Spanish military probably could report back that they were satisfied.

The Foreign Minister said that it had always been the Spanish intention not to talk about figures but only about equipment because figures were misleading considering that equipment could be priced in various ways.

The Foreign Minister said that the Secretary had mentioned Boumedienne but that he would like to remind us that the Algerian Air Force, thanks to Soviet generosity, was infinitely superior to the Spanish Air Force which had obsolete equipment. He said the Spanish military were ready to help the U.S. but they must be armed to do so.

The Foreign Minister added that in the U.S. package we offered obsolete 102s. Mr. Landau interjected that in the discussion with Mr. Hoopes this matter had been clarified and that the U.S. Air Force was looking into the possibility of furnishing 104s as requested by the Spanish.

The Secretary suggested that the military should go ahead and have another try at the package on Monday with a view of reaching an agreement on the physical contents of the package as well as on the services which could be provided by the U.S. to the Spanish Navy and to the early warning system. These services were hard to translate into dollars and cents.

Castiella said that time was flying and there was need for him to meet again with the Secretary to talk about reduction of U.S. presence and security guarantees possibly on Monday.

The Secretary suggested that the military group discuss the reduction of U.S. presence at the time they talked about the package. Mr. Aguirre de Carcer said firmly that the Spanish generals were not authorized to discuss this question.

The Secretary then suggested that this matter be raised on the political level at DOD possibly with Mr. Nitze.

The Foreign Minister said that he would be pleased to send Under Secretary Sedo on Monday to see Mr. Nitze. The Foreign Minister again stressed that we had severe time limitations and that he could not sign until he was satisfied that Spanish defense needs had been met.

It was decided that the Spanish military would meet with the U.S. military group headed by Mr. Hoopes on Monday and that Mr. Nitze would see Mr. Sedo on Monday too. Following these meetings, another talk would be scheduled between the Secretary and the Foreign Minister.

1. Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15-4 SP-US. Secret; Noforn; Limdis. Drafted by Landau and approved in S on December 25. The meeting was held in the Secretary’s office.