272. Telegram From the Embassy in Yugoslavia to the Department of State1
8210. Military handle as Specat Exclusive. State for Under Secretary Benson frm Ambassador. Subject: Dragon. Refs: A) Belgrade 79862 B) State 280014.3
1. S-entire text.
2. I saw General Pekic on Oct. 31 to discuss Dragon. I told him that since he had been personally involved in the Dragon case, I wanted to give him my personal apologies for the way the case had been handled and to assure him that there had been no repeat no political [Page 897] motive behind our escalating cost quotations. I pointed out that the LOA on the 1,000 Dragon purchase was still valid, and would remain so until the end of the year. Thus, if the Yugoslavs were to change their minds, the 1,000 missiles were still available.
3. General Pekic replied that he had always believed that the reason for the change in price quotations was inflation, and that there was no political motivation behind our actions. But, he said, there were some (he clearly meant Ljubicic) in the Yugoslav military who did not agree, and thought we had been playing games with the Yugoslavs. He added that General Ljubicic would not repeat not be prepared to reconsider the Yugoslav decision on Dragon this year, but that the GOY might “come back to the Dragon or TOW” next year. He admitted that the Yugoslavs were to some degree at fault because—given concerns over the need to notify Congress—they had not reacted fast enough when we first made our offer. It is now time, he said, to forget our problems over the Dragon, to learn some lessons from the experience, and to move on to further cooperation.
4. With regard to the future, the General made three points:
A. He reiterated their desire for modern electronic warfare equipment and complained about our unwillingness to sell the Yugoslavs sophisticated GEA. (I understand that the Yugoslavs agreed at the recent Washington meetings to present us a list of specific electronic warfare needs.)
B. On anti-tank weaponry, he indicated that their interest in the Viper remains high. He acknowledged that even though this system would probably be denied them for the present, they would be very interested in an advanced or follow-on Dragon system. (I told him that I had no knowledge of plans for an improved Dragon.)
C. On radars, he said that he could see no reason why the U.S. should withhold up to date equipment from Yugoslavia, since we know it would never be used against us. Aside from the air defense radars now under negotiation, he indicated an urgent need for an anti-aircraft fire control system such as “Skyguard” for adaptation to weapons in the 30–40 mm class (knowledge nil here on this system). The General further stated that they would be happy to give a manufacturer their required technical specifications for a fire control system to see if anything could be worked out. If none of this is possible, he would like us to provide a list of radar systems adaptable to 30–40 mm anti-aircraft guns and allow them to decide for themselves which most suited their needs.
5. Comment: We can forget about Dragon sales to Yugoslavia, at least for the time being. Pekic’s statement that Ljubicic would not reconsider this year was straightforward and unqualified, and would not have been made unless he knew whereof he spoke. Nor do I see [Page 898] any purpose to be served by now asking to see Ljubicic. That would only reveal our anxiety level, lead to another turn down, and expose us to another series of complaints about our lack of trust as demonstrated by our refusal to consider sales of our most modern equipment.
6. It is interesting, however, that Pekic left the door open for a return to Dragon (or TOW) sometime next year. It may be that, in advance of Pekic’s visit to the US next spring, we can raise the question again so that he can pursue it while he is in Washington. This is a possibility we should keep in mind as we prepare for the visit.
7. In classic Yugoslav fashion, we are now beginning to see an effort to use our (or at least my) embarrassment as a lever to get us to agree to the sale of sophisticated equipment we have disapproved before. While that is a game we should not play, and while I do not argue that we should give them the neutron bomb, I do suggest that Washington take a hard look at whether there are any areas where we could move the limits forward a bit. Specifically, if there is anything we can do in the three areas mentioned by Pekic (para 4, above), it could go far to remove or at least diminish whatever distrust Ljubicic still harbors. We seem to have come through the Dragon affair with only moderate—and repairable—damage. The objective now ought to be to demonstrate the accuracy of our claim that what happened was a consequence of misunderstanding, not deliberate policy. We can best do that by finding other areas of cooperation and making them work.
- Source: Carter Library, National Security Affairs, Staff Material, Europe, USSR, and East/West, Larrabee Subject File, Box 68, Yugoslavia: 1/79–1/80. Secret; Immediate Exdis. Also sent Immediate to DOD ASD/ISA and USCINCEUR. Printed from a copy that was received in the White House Situation Room.↩
- In telegram 7986 from Belgrade, October 25, Eagleburger reported that at a Romanian Embassy reception celebrating the Romanian Armed Forces, General Pekic said “the Dragon system is right for the Yugoslav armed forces” but that General Ljubicic canceled the purchase because he believed “the damned Americans are playing politics with us.” Pekic said that he would be willing to raise the issue again with Ljubicic “if we could give him a peg on which to hang his approach.” Eagleburger wrote that he had decided to talk to Pekic “hat in hand—and say to him that I want him to understand that it is not ‘politics’ but bureaucratic bumbling on our part which has put us in this fix.” (National Archives, RG 59, Central Foreign Policy File, D790488–1103)↩
- In telegram 280014 to Belgrade, October 27, Benson informed Eagleburger that the 1,000 Dragon missiles were “still available and can be delivered to aerial port of embarkation within thirty days of receipt of GOY signature on LOA.” Benson agreed that Eagleburger should talk to Pekic and concluded that “obviously, given the past history of the problem, we do not want to press the GOY to buy the Dragon. What we want to accomplish is to convey to them that in this case as in other FMS cases we are willing to do our best to meet Yugoslav needs.” (National Archives, RG 59, Central Foreign Policy File, D790491–0206)↩