27. Transcript of a Telephone Conversation Between West German Minister of Finance Schmidt and the President’s Assistant for National Security Affairs (Kissinger)1
K: Hello. Helmut how are you.
S: Fine, thank you.
K: I know you talked to George Shultz this morning and I have talked to the President,2 and now he has been instructed to negotiate with you in a constructive spirit.
K: Taking into account your special necessities. We thought it was better for you two to work out what that means technically. On the other hand in the spirit of our discussions, if the point is reached where you want to call me and bring something to the special attention of the President, I know you wouldn’t do it unless it were of very great importance—
K: You feel free to do that.
S: I wouldn’t do it before Friday3 Noon, Herr Henry.
K: I understand that, but if say, on Friday Noon there is one special point which you think is politically overriding purely economic considerations, we would at least consider it.
S: I think that this might happen in the course of Friday and I might then call upon you on Friday Noon.
K: Yes, I don’t—can’t guarantee you what our answer will be.
S: Of course.
K: But I want you to know that George understands that there are other considerations except purely economic ones.
S: In my calculations your parameter of action is not very great.
K: No, but what we can consider is what George discussed with you this morning, is how to put some limits to a float for example. How we can reach some understanding from that.
S: Uh humm.
K: So that the thing wouldn’t get totally out of hand for you.[Page 114]
S: There is of course the danger of a new push in the direction of distrust into your currency, you know.
S: I think yes. I think as we floated, this would mean a new push in the direction of this front.
S: It’s very difficult to work out how the markets will react.
K: That’s right. No, we understand this and we are not totally wedded to one particular scheme.
S: So aren’t we.
K: We have—I have tried to explain to Shultz what I take to be your domestic situation in Germany. Of course [you?] can do it better than I can. Secondly what I think the European problem is—
S: Would the US be happy with a common European float?
K: Well, it’s a question of happy—we can live with a common European float if you do not attach too many conditions to it.
S: I see.
K: If you attach a lot of discriminatory conditions to it, then it becomes complex again.
S: Yes. Brandt’s favor is a European thing, you know.
K: Well, we would not oppose that. But our concern is that the only way you can get a European float is by accepting so many of the French conditions.
S: For the moment being, it’s more the British conditions and the Italians.
K: Oh, really.
S: Yes. They are—the British are deeply worried about the future course of the Parliament.
K: Well, we would not oppose a common European float if it were not discriminatory in some of its restrictions.
S: I understand, Henry, I understand. So far the field of trade policy has not been touched in all these considerations and these talks.
K: Right. Well, if that is the case we would not oppose, but if you have to go to certain alternatives then we would be prepared to discuss with you how to make them politically more bearable for you.
S: Yes, I understand this clearly. I will talk to Willy Brandt tomorrow morning about it.
S: Well, Henry, thank you very much for this information.
S: And I’m very thankful that you show this fair consideration.[Page 115]
K: Well, I know you wouldn’t call me unless you attached importance to it.
S: Yeah, I do.
K: So, you feel free to call me on Friday.
K: Good, Helmut.
S: Thanks Henry.