145. Telegram From the Embassy in Hungary to the Department of State1

2644. Subject: Ambassador’s Conversation With President Losonczi.

1. President Losonczi began our private conversation after my formal presentation of credentials, August 4, by expressing his pleasure over recent improvement in our relations. He referred specifically to the Scientific and Cultural Exchange Program, to the settlement of claims and debts, and to progress on family reunifications.

2. He then went on to talk at considerable length about detente, the Helsinki Accord and the two special Hungarian-American problems—the Crown and MFN—and I responded briefly to the points he raised.

3. Detente. Losonczi emphasized that the recent improvement in our bilateral relations had been due in no small part to the detente in the U.S.USSR relationship. Good bilateral relations between us could make a positive contribution to the atmosphere of detente, but it was essential that there be a continuation of a meaningful detente policy between the two super powers. He talked at considerable length on this point, leading up inevitably to an expression of concern over the present state of Soviet-American relations with a not-too-subtle blaming of American actions for that situation. He hoped that there would be a change.

4. In reply, I stated that President Carter’s policies were aimed at the establishment of a detente relationship with the USSR based on the enlightened self-interest of both sides. It would be unfair and unrealistic to impugn the motives of the President. There should be no doubt about President Carter’s positive and constructive attitudes toward American-Soviet relations. He had no interest in reviving the Cold War. On the contrary, he wanted a realistic relaxation of tensions. In order to fully appreciate President Carter’s position, I urged President Losonczi to read the full text of President Carter’s recent speech in Charleston, South Carolina.2 In spite of Moscow’s polemics, in recent weeks there have been some favorable developments in U.S.-Soviet relations as evidenced, for example, by the progress in negotiations for banning nuclear testing and in the renewal of the 1972 Agreement for Cooperation of Science and Technology.

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5. Helsinki. After expressing satisfaction that agreement had been reached on the agenda for the Belgrade meeting, President Losonczi stated that it was essential to think of the Helsinki Accords as a whole; that it was a mistake to concentrate interest on only isolated parts of the agreement. Proper evaluation of its implementation required a broad-gauge approach. I replied that the U.S. was committed to the effective implementation of all three Baskets, but that this did not mean that, depending on circumstances, different signatories to the accord would not feel compelled to emphasize different aspects of what was a rather lengthy document. I pointed out that we were pleased with the performance of the Hungarian Government in implementing the Helsinki Accord as was evidenced by the comments made in the Executive Branch’s report to the CSCE Commission. The continuing dialogue between the top officers of the Hungarian Government and our Embassy during the past year was productive and contributed to and reflected the improved relations to which President Losonczi had referred.

6. The two issues.

A. MFN. In reply to a rather impassioned plea for the granting of MFN, I followed the line taken by State 182700.3 We shared a common desire to increase our bilateral trade; we recognized Hungarian efforts in this area; and we were looking forward to the opening of the National Bank’s representation office in New York, and to the Hungarian Economic Days planned later this year. When mentioning our satisfaction that we had begun useful discussions about our trade agreement, I reminded the President of the important role Congress plays in this area as well as other areas of international interest. I also referred to the recent visit of Mr. Nyerges to Washington and the discussions which were now scheduled to take place in Geneva in September.

B. The Crown of St. Stephen. There was a powerful but dignified plea for its return. The President left no doubt about how strong were the Hungarian feelings that the time had come for the Crown to come home. In reply I said that Hungary’s concerns on this were well known and understood in Washington. That was all I could say at this time.4

7. Comment. I was received with what seemed to be genuine warmth. Serious talk was interspersed with light banter. The President was clearly pleased over the recent improvement of American-Hungar[Page 450]ian relations, and was emphatic about the contribution the Hungarians had made to that improvement. There was real concern about the course of Soviet-American relations. The strongest feelings, however, were reserved for the two bilateral issues that interest them most at this time. Failure to reach satisfactory solution of these two issues, but particularly on the Crown, would have an adverse effect on U.S.-Hungarian relations, and almost certainly sour the present friendly atmosphere.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D770283–0669. Confidential.
  2. Remarks at the 31st Annual Meeting of the Southern Legislative Conference on July 21. (Public Papers: Carter, 1977, Book II, pp. 1309–1315)
  3. Telegram 182700 to Budapest, August 3. (National Archives, RG 59, Central Foreign Policy File, D770278–0728)
  4. In telegram 182833 to Budapest, August 4, the Department informed Kaiser that the President had not taken action on Vance’s July 28 memorandum suggesting a scenario for returning the Crown, and instructed him to remain noncommittal on the subject. (National Archives, RG 59, Central Foreign Policy File, P840070–0723)