254. Memorandum From Secretary of the Treasury Fowler to President Johnson1
SUBJECT
- “Problems Ahead in Europe”
You will recall at the NSC discussion of the State Department paper “Problems Ahead in Europe”2 I criticized the paper as being incomplete and inadequate and asked for permission to submit a supplementary [Page 578] paper as a part of the educative enterprise for those concerned with military, political, economic and cultural relationships with that part of the world.
The principal point of my criticism was that the listing of specific problems we have with Western Europe included such things as
- “(1) U.K. Entry Into EEC.
- (2) U.K. Financial Problem.
- (3) Political Side of NATO.
- (4) U.S., Western Europe and Third World.”
but omitted any treatment of what I believe to be at least a major specific problem with Europe—particularly the Common Market—namely, what I shall term “The Financial Problem”.
I raise this question in a National Security Council context because the financial problem grows out of the disparities in burden-sharing relative to financial strength which result from political, diplomatic and military arrangements.
In essence, I am appealing to the other parts of the Government [that] we give a far higher priority to the importance of viable financial arrangements with Western Europe, particularly the Common Market, in all military, political, economic and cultural activities.
It is my conviction that this financial problem with Western Europe is our Achilles heel which, more than any of the specific problems listed in the State Department paper, are a threat to our position in Western Europe and the effectiveness of our foreign policy in dealing with it.
Accordingly, I have taken the liberty of preparing the attached paper on the financial aspects of U.S.-European relationships3—again for the same background purposes that the previous paper was circulated.
The principal menace to our position in Western Europe, in my judgment, is the desire of the French, under deGaulle, to expel us as a practical matter from Western Europe. The principal tools which are being employed to achieve that result are blocking measures to achieve a better multilateral sharing of responsibilities by the Common Market partners while the U.S. follows a course which it cannot afford much longer.
If the U.S. is to be effective in partnership with Western Europe and we are to avoid a two-bloc system in the Free world, the relative burdens must be attuned to financial viability. The purpose and thrust of our major political and diplomatic effort must be to effect a more viable and durable financial partnership than our diplomacy has provided in the last decade since the Common Market was established.
- Source: Johnson Library, National Security File, NSC Meetings File, Box 2. Secret.↩
- See Document 251.↩
- Not printed.↩