Foreign Relations of the United States, 1977–1980, Volume XX, Eastern Europe

288. Memorandum From Acting Secretary of State Christopher to Vice President Mondale ¹

Washington, undated

SUBJECT

• Your Participation in the State Funeral of President Tito

I. OBJECTIVES

Your presence in Yugoslavia as the head of an impressive U.S. delegation to Tito’s funeral² is an important symbol for the Yugoslavs—and for the Soviets. While your visit will be short, there will be both private and public opportunity to reaffirm our policy of support for Yugoslav independence, territorial integrity and unity—simple words, but full of meaning in the context of the present world situation.

In brief meetings with the new Yugoslav leadership, you will want to emphasize our confidence in their ability to run Yugoslav affairs along the lines set down by Tito. They will appreciate concrete expressions of our desire to strengthen the bilateral relationship by being responsive to their needs, especially in the economic and military spheres of our cooperation.

The Yugoslav leaders will also make clear to you their view of nonaligned Yugoslavia’s unique international position. They will favor the continued development of closer relations with the West—including the U.S.—but they will also caution against ties which are too close or too visible.

The Yugoslavs also want to avoid opening themselves to charges from opponents within the Nonaligned Movement that they have compromised their nonaligned credentials by getting too close to the Americans.

We expect the question of anti-Yugoslav Government emigre activity to be high on the Yugoslav agenda of items to bring up with Western leaders—especially the Americans, Germans, Canadians and Australians.

II. SETTING

The Internal Situation

The actual succession process has followed the pattern which Tito had cut for it. The former Vice President, Lazar Kolisevski, a Macedonian, has become the President of the collective State Presidency. On May 15, Kolisevski is to rotate out of office and be replaced by another member of the Presidency, Cvijetin Mijatovic, a Serb from Bosnia-Hercegovina, for a one-year term.

With Tito’s death, his title of President of the Presidium of the League of Communists of Yugoslavia (LCY) will be subsumed within the Presidium as a whole. Thus the current Chairman of the Presidium, Stevan Doronjski, a Serb from the Vojvodina, will become the head of the Party until his rotation out of office when his one year term ends in October, 1980. There is no established procedure for the rotation process in the LCY Presidium and we do not know who will replace Doronjski.

We anticipate that the succession process will operate smoothly, and that the collective State and Party governing bodies will function as planned—at least during the first few months after Tito’s death. Political activity during Tito’s lengthy illness indicated that the senior members of the Party, including Vladimir Bakaric, a Croat, Milos Minic, a Serb, and a few others, intend to play an active political role in conjunction with the operation of the collective organs of leadership. How this will work in practice remains to be seen. We believe that the military, in the person of Defense Secretary Ljubicic, will represent a stabilizing factor on the national scene.

In the first few months of this year, Yugoslavia passed through a period of near crisis, occasioned by the most serious illness President Tito had ever suffered. His extended illness coincided with severe domestic economic difficulties and the Soviet invasion of Afghanistan. Any one of these factors would have posed serious problems for the Yugoslav leadership. Their unfortunate coincidence compounded the problem and presented the Yugoslav leaders—this time effectively minus Tito—with a situation without precedent.

Tito’s comrades did very well indeed.³ To assert that these few months provided a definitive test of the succession machinery of the post-Tito leadership would be an exaggeration. The time was too short for more than a “start-up” run, yet too long for the development of completely natural relations among Tito’s successors. But this did not diminish the sense of deserved pride and increased self-confidence which prevailed in Yugoslavia during this period. This is the principal lesson to be learned from the events of the past few months: a successful precedent now exists which will give the post-Tito leaders greater confidence in the weeks and months ahead.

The Economy

Tito’s successors have inherited a seriously overheated economy. The rapid economic growth over the past three years has pushed the inflation rate over twenty percent, created a series of huge trade deficits, and driven up hard currency debt to over $13 billion. The Yugoslavs are now trying to implement a stabilization policy to tighten credit, slow growth, and cut imports. However, these measures are politically sensitive and will take time to have a real impact. To ease the economy over this period, the Yugoslavs have requested medium term balance of payments assistance from the U.S. ⁴ and several other countries, including France, the FRG, and Kuwait. They also intend to approach the IMF and private Western banks which already hold much of the country’s external debt.⁵ We believe that Yugoslavia’s economic problems are serious but that a real crisis can still be avoided through prudent Yugoslav policies and some external financial help. We are now considering what role the U.S. can play.⁶

Foreign Affairs

While there is no evidence of any Soviet intention to move against Yugoslavia at this time, the Yugoslav defense forces have prepared themselves to defend the country against any threat.

In talks in Belgrade in early February with U.S. Defense Security Assistance Agency Chief, General Graves, Defense Secretary Ljubicic noted the contingency measures which had been taken “for all eventualities,” but also noted that Yugoslavia was calm and not excited about the current situation.⁷ (Our military relationship with the Yugoslavs is modest, but growing.)

The Yugoslavs have been typically outspoken in their opposition to Moscow’s move against Afghanistan and they have played a significant role in the mobilization of nonaligned sentiment in condemnation of the Soviet intervention. Previously, they had been almost equally concerned at what they saw as Moscow’s war by proxy in Kampuchea. A resultant exchange of open polemics in the Soviet and Yugoslav press has served to exacerbate further Soviet-Yugoslav relations.⁸ In addition, while Moscow was probably not surprised at the Yugoslav refusal to attend the April 28–29 meeting in Paris of European Communist parties, neither was it pleased by the Yugoslav decision.

The U.S. is in a very good position with the new Yugoslav leaders. We have—particularly during this Administration—accelerated the pace of our bilateral relations in all key fields: political, economic, cultural and military. The resultant “web of relationships,” as Ambassador Eagleburger describes it, has helped to increase our knowledge of Yugoslav leadership attitudes as well as to increase Yugoslav confidence in the durability of our friendship and our support. Tito’s visit to the United States in March, 1978, contributed to this process and the President’s frequent correspondence with Tito was of great benefit in keeping up the momentum of improving relations.

Yugoslav Ambassador Loncar expressed his Government’s appreciation for the President’s May 4 statement in which the President strongly reaffirmed U.S. support for Yugoslavia and stated that we will do what we must to provide that support.⁹ The Ambassador also expressed appreciation for a public statement by Deputy Assistant Secretary Barry on April 22 pointing out that the U.S. would view with grave concern any Soviet or Warsaw pact efforts to undermine Yugoslav territorial integrity, unity and independence.¹⁰ The Soviets attacked Barry’s statement as an effort to cast doubt on Soviet policies.

Yugoslav relations with the countries of Western Europe have also improved during the past few years. In the present situation we have urged the Western European governments to demonstrate their support for Yugoslavia at this time by appropriate policy statements, by greater attention to anti-Yugoslav emigre activity, by economic measures including successful conclusion of the Yugoslav-EC trade agreement, and by meeting Yugoslav requests for arms sales.

Yugoslavia’s increasing distrust of Soviet motives over the last year reflected Tito’s personal disenchantment with Moscow. His successors may well tread a more cautious line, attempting initially to take a more “balanced” position. Such a shift would be designed to bolster Yugoslavia’s credentials among the nonaligned and to reflect Yugoslav concerns about growing East-West tensions. However, we suspect that a more “evenhanded” approach would be largely tactical. The Yugoslav people and leaders see a real threat in the Soviet invasion of Afghanistan and Soviet support for the Vietnamese invasion of Kampuchea.¹¹

The flagrant nature of Moscow’s intervention in Afghanistan may have eased the pressures on Yugoslavia within the Nonaligned Movement, however. The 1979 Havana Nonaligned Summit turned out to be a stand off between the radicals led by Cubans and the moderates led by the Yugoslavs. But one of the first casualties in the Afghan war was Cuba. Having survived a record number of votes in its effort to gain a seat on the United Nations Security Council, Cuba withdrew from the race immediately after the Soviet invasion.

Nonalignment has been the Yugoslav vehicle for the achievement of international recognition and status.¹² While nonalignment will continue to be the pillar of Yugoslav foreign policy, the Yugoslav role in the Nonaligned Movement will almost certainly diminish without the charismatic presence of Tito, one of the founders of the Movement.

III. ISSUES

A. U.S. Policy Toward Yugoslavia

1. Suggested Points

—Much progress was made in the development of our bilateral relations during the past three years. President Tito’s tremendous contribution to this mutual undertaking will be sorely missed. The President will particularly miss the correspondence which he and Tito exchanged on international issues. We intend to redouble our efforts to further strengthen our relations, and we are confident that these efforts will be reciprocated by the Yugoslav side;

—The long-standing U.S. policy of support for Yugoslavia’s independence, territorial integrity and unity remains unchanged, as does our understanding and respect for Yugoslavia’s nonaligned position;

—We have been impressed by the calm, confident behavior of the Yugoslav Government and peoples during the past few months, which saw not only President Tito’s illness, but also a rise in international tension caused by the Soviet invasion of Afghanistan;

—For our part, we have tried to dampen unhelpful speculation and rumors about events relating to Yugoslavia. In this we have worked closely with the Federal Secretariat for Foreign Affairs in Belgrade and the Yugoslav Embassy in Washington. Ambassador Loncar’s (LOHN char) experience and skill have helped us greatly;

—We have also been keeping careful watch on anti-Yugoslav terrorist activity within the United States. The President has made it clear that this Administration will not tolerate illegal actions directed against Yugoslav establishments and officials in the United States;¹³

—We understand the depth of your concern about emigre activities at this time. We will do what we can to tamp this down and we have expressed our opinion to the Governments of those countries with large emigre populations; you must understand, however, that we can do nothing which would interfere with emigre activities which do not violate any U.S. law;

—I am aware of Secretary Kostic’s (KOS-TICH) discussion with Secretary Miller regarding medium term balance of payments assistance for Yugoslavia.¹⁴ We are well aware that Yugoslavia’s political independence rests to an important degree on the strength of the economy. We are giving your request for assistance our close attention; and

—There is much that we can do together. We would like to keep up the pace of high level political visits, and to consult frequently on global and bilateral issues which concern us. We will do what we can to encourage the further development of trade and economic relations. In the important area of military cooperation, we remain ready to respond to Yugoslav needs and desires.¹⁵

B. U.S.-Soviet Relations

1. Suggested Points

—Short to mid-term prospects for improvement in our relations remain poor. We have seen no indication the Soviets are ready to withdraw from Afghanistan or seriously to seek a political solution there on terms which we would find acceptable;

—The Soviet invasion of Afghanistan has posed a major threat to peace and to a geographic region of vital importance. We consider it important that the international community impose a cost on the Soviets which will deter them from similar actions in the future and ultimately bring about their withdrawal from Afghanistan;

—The measures we have taken are intended to respond to the seriousness of the Soviet action. We are determined to maintain our sanctions until the Soviets withdraw;

—But our response has left intact the framework of U.S.-Soviet relations, and we recognize the need to manage the East-West relationship with dispassion and consistency. Specifically, we remain firmly committed to further progress in arms control;

—We nonetheless believe it is impossible to divorce detente from deterrence. A firm response now to Soviet aggression in Afghanistan can only foster future progress in East-West relations; and

—The success of this approach, of course, depends upon the cooperation of the entire world community.

C. Soviet Foreign Policy

1. Suggested Points

—The Soviets appear to have underestimated the intensity of the world response to Afghanistan, and we believe they are unlikely to undertake any major new initiatives of similar magnitude in the period ahead for fear of provoking further adverse reaction;

—Given the continuing resistance to their troops in Afghanistan and their interest in allaying European concern, we think any overt moves in Europe particularly unlikely, but we continue to monitor Soviet military activities very closely;

—The Soviets are aware that we would view any effort on their part to undermine Yugoslavia’s independence, territorial integrity and unity with grave concern; and

—We have no reason to doubt, however, that the Soviets will continue to press their interests in the Third World, either directly or through such proxies as Cuba and Vietnam.

D. Afghanistan

1. Essential Factors

If Tito had lived we would have expected to see the Yugoslavs play an active role in efforts to launch a diplomatic initiative on Afghanistan. They may still play a constructive role but without Tito’s guiding hand it seems unlikely that they will be willing to take the lead in international efforts. Yugoslav interests have coincided with our own since no formulation which would legitimize continued Soviet military presence in Afghanistan would be acceptable to Yugoslavia given its concerns about any weakening of nonaligned opposition to intervention.

In his February 25 letter to President Tito, the President stressed U.S. support for a neutral nonaligned Afghan government acceptable to the Afghan people and said that with Soviet withdrawal, the U.S. would be willing to join with the neighbors of Afghanistan in a guarantee of Afghanistan’s true neutrality and of non-interference in Afghanistan’s internal affairs.¹⁶

The Soviets show no signs of planning to reduce their presence and in a variety of ways have indicated their intention to remain in the country. At the same time, the Babrak regime is experiencing deep internal divisions. Thus, the Soviets seem far from achieving their twin objectives of establishing a viable regime in Kabul and pacifying the countryside.

2. Suggested Points

—We believe it is of extreme importance that all countries, especially major nonaligned and Islamic states, cooperate with international efforts to make the Soviets pay a heavy and continued price for their aggression;

—The United States has taken a series of strong bilateral and multilateral initiatives to demonstrate to the USSR our resolve. We would welcome any suggestions on how we might individually or jointly proceed in further pressing for an early Soviet withdrawal and the establishment of a popularly supported government in Kabul;

—On April 17, the Afghan regime announced a package of proposals allegedly aimed at promoting a political solution of the Afghan conflict. The basic elements of this package are proposals for bilateral Afghan negotiations with Iran and Pakistan to normalize relations to be followed by a regional conference which would agree on a regional peace framework. Ultimately these talks would be expanded to include Indian Ocean and Persian Gulf states with the purpose of making the entire area a zone of peace;

—In our view, this Afghan proposal is fully supported by the USSR and probably was drafted in Moscow. We do not believe it represents a serious effort to end the Afghan crisis; and

—Our foremost problem with the proposal is that it does not require the withdrawal of Soviet forces, but does require the recognition by other states of the current Soviet-installed Afghan regime as a precondition for negotiations. It does not take into account the interest of the majority of Afghans who are struggling for their right of self-determination against the Soviets and the Babrak Karmal regime.

E. Iran

1. Suggested Points

—The release of our people remains a paramount interest of our policy toward Iran. As the President’s recent actions clearly demonstrate, we will not tolerate continuation of this situation.¹⁷ We will not relax our effort until the hostages are free;

—We appreciate the helpful role which Yugoslavia has played in this crisis, particularly in talking to the Iranian authorities about the condition of the hostages and the need for Iran to put this problem behind it to better focus on the real problems facing the country.¹⁸ We hope the Yugoslavs can continue to exert their considerable influence on Iran. We believe that Iran’s problems of internal unrest and economic development are now overshadowed by the increased Soviet threat to the countries of the region;

—Our rescue attempt was a humanitarian one and was not directed against Iran or the people of Iran; and

—Now, and especially later, when the hostage question is finally resolved, the Yugoslav Government can do much to keep Iran truly nonaligned. Such a foreign policy course would be in the best interests of Iran and other countries.

F. Nonaligned Movement

1. Suggested Points

—We understand and appreciate the significance of Yugoslavia’s role in the Nonaligned Movement. In our frank discussions on issues of concern to the Nonaligned Movement, we have felt free both to express our concerns and to offer our advice. We would like to encourage the continued development of this practice;

—We admired the efforts of Yugoslavia to organize nonaligned condemnation of the Soviet intervention in Afghanistan. This has been a restraining factor on Soviet behavior at this crucial time.

1. Source: Carter Library, Donated Material, Papers of Walter F. Mondale, Overseas Assignments—Trip Files, 1977–1980, Box 35, Vice President’s Visit to Yugoslavia for Tito Funeral, 5/5/80–5/8/80: Delegation Briefing Book. Secret. Christopher was Acting Secretary following the resignation of Secretary Vance on April 28.
2. Mondale traveled to Belgrade May 6–8, 1980.
3. In a May 6 memorandum to the Vice President, Eagleburger provided his own analysis of the transition from Tito to the collective leadership. “By and large the system has functioned smoothly,” Eagleburger wrote, adding that the new leadership understands that “how well they do in the first six months will have a substantial impact on the future viability of the system.” Because of that fact, Eagleburger wrote, “decision-making will proceed in a fairly orderly fashion” and that “there will, in fact, be an extraordinary effort to compromise differences and to avoid even a hint of personal rivalry or controversy.” (National Archives, RG 59, Office of the Secretariat Staff, Lawrence S. Eagleburger, Under Secretary of State for Political Affairs, Ambassador to Yugoslavia, Under Secretary of State for Management (1967–1984), Lot 84D204, Box 10, Chron, May, 1980)
4. On April 24, Kostic met Secretary of the Treasury Robert Miller in Hamburg, West Germany, during the IMF summit and requested financial assistance for Yugoslavia’s balance of payments deficit. Kostic told Miller that Yugoslavia was implementing an economic stabilization program but that further borrowing was required. (Telegram 873 from Hamburg, April 24; National Archives, RG 59, Central Foreign Policy File, D800204–0994)
5. David Rockefeller, President of Chase Manhattan Bank, traveled to Belgrade in June to discuss an offer to syndicate a worldwide $500 million loan for the Yugoslav Government. Belgrade rejected the offer as insufficient. (Telegram 165468 to the U.S. delegation in Venice, June 23; National Archives, RG 59, Central Foreign Policy File, D800303–1182) In a conversation with Eagleburger on June 30, Loncar said that the Yugoslav Government was opposed to a worldwide loan syndication and that Belgrade was hoping to get separate loan agreements from several Western countries. Loncar also stressed that Belgrade was reticent to accept loans from Arab countries because of “political strings attached.” (Telegram 5192 from Belgrade, July 1; National Archives, RG 59, Central Foreign Policy File, D800316–1265) The Rockefeller plan was finally accepted by the Yugoslav Government in September. (Telegram 7051 from Belgrade, September 8; National Archives, RG 59, Central Foreign Policy File, D800427–0868)
6. Miller traveled to Belgrade as part of the U.S. delegation to Tito’s funeral and discussed with Kostic the way in which the U.S. Government could offer assistance. Miller stressed that the IMF must be involved in any stabilization program the Yugoslav Government undertook. (Telegram 3749 from Belgrade, May 12; National Archives, RG 59, Central Foreign Policy File, D800235–0359)
7. See Document 280 and footnotes 3 and 7 thereto.
8. In telegram 2095 from Belgrade, March 15, the Embassy reported the sharp reaction of the Yugoslav press to publication in the Soviet press of commentaries on an article published in a Vietnamese newspaper which the Yugoslav Government considered highly offensive. The Embassy reported that “this is the sharpest criticism of the Soviet press we can recall for several years.” (National Archives, RG 59, Central Foreign Policy File, D800132–1117) In telegram 2180 from Belgrade, March 18, the Embassy reported that the Yugoslav Government saw “a concerted Soviet campaign against Yugoslavia” and felt the Soviet campaign was “not directed toward Yugoslavia’s internal situation so much as toward Yugoslavia’s public opposition to Soviet moves in Afghanistan and its influence in the NAM.” (National Archives, RG 59, Central Foreign Policy File, D800140–0408)
9. On May 4, in a statement on the death of Tito, Carter noted that “for more than three decades, under administrations of both parties, it has been the policy of the United States to support the independence, territorial integrity, and unity of Yugoslavia.” Noting the international situation, Carter stated: “America will continue its longstanding policy of support for Yugoslavia and do what it must to provide that support.” (Public Papers: Carter, 1980–81, Book I, p. 827)
10. Published in Current Policy, No. 169, U.S. Department of State, May 1980. Barry’s statement in front of the Cleveland Council on World Affairs received no media attention in the United States, but was immediately attacked by the Soviet press. In telegram 6702 from Moscow, April 25, the Embassy reported that the Soviet press described Barry’s statements as “‘slandering’ Soviet policy” and “barely stopping short of threatening the USSR.” (National Archives, RG 59, Central Foreign Policy File, D800205–0262)
11. In the briefing material prepared for Mondale’s trip to Belgrade, the Department noted that the “Yugoslav leaders perceive Soviet foreign policies—e.g., support of the Vietnamese invasion of Kampuchea, opposition to an improvement in Yugoslav-Chinese relations, manipulation of the Yugoslav-Bulgarian dispute over Macedonia, and attempts to gain greater influence and control over the international communist and nonaligned movements—as part of a ‘grand design’ threatening Yugoslavia’s vital interests.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 87, Yugoslavia: Briefing Book for Tito Funeral, 5/80)
12. In the “Non-Aligned Movement” section of Mondale’s briefing materials, the Department noted that Tito’s death left no clear succession in NAM for the leadership of the moderate group of nations, but that Cuba’s “efforts to exploit the NAM Chairmanship to radical ends have been rebuffed notably by the strong resistance of NAM moderates” and that although the United States could not work with NAM as an organization under Cuba’s chairmanship, it would continue to “work closely on specific issues of mutual concern with individual NAM members, especially with moderates like Yugoslavia.” (Ibid.)
13. The “Terrorism Against Yugoslavia” briefing paper, prepared by the Department of State on April 21 and included in Mondale’s briefing book, described the extent of anti-Yugoslav terrorism in the United States and noted that “no other foreign government represented in the United States has been the target of as many actual terrorist incidents as the Yugoslav Government.” (Ibid.)
14. The Department prepared two briefing papers on the Yugoslav economy for Mondale’s trip. In “The Yugoslav Economy in the Post-Tito Period,” the Department noted that the period of rapid economic growth Yugoslavia experienced had overheated the economy, pushed inflation to above 20 percent, and created a large trade deficit. The paper also noted the “extreme regional disparity in living standards” between Yugoslav regions. (Ibid.) In “The Bilateral Economic Relationship,” the Department noted the U.S. Government had made “an intensive effort to promote economic relations” and that the Yugoslavs had “come to view the United States as an economic partner which can lessen the commercial risks of economic dependence on Western Europe and the political risks of dependence on the Soviet Union.” (Ibid.) See also footnotes 4, 5, and 6 above.
15. The “Military Relationship” paper in Mondale’s briefing materials noted that following the Soviet invasion of Afghanistan, the United States “adopted a more forthcoming arms transfer policy.” While the United States would not release the Harpoon anti-ship missile to the Yugoslav military, the MK–46 anti-submarine missile sale was being positively considered, as was the sale of F–5E aircraft. (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 87, Yugoslavia: Briefing Book for Tito Funeral, 5/80)
16. See footnote 6, Document 290.
17. Reference is to Operation Eagle Claw, which failed in its attempt to rescue the hostages in Iran on April 24.
18. In telegram 2569 from Belgrade, April 1, Eagleburger reported that “the GOY has publicly and unequivocally supported the release of our hostages in Tehran. They have expressed this in statements in Belgrade and by their words and actions at the UN.” However, Eagleburger cautioned, the Yugoslav leadership had limited influence on Iran’s new leaders. Belgrade, he continued, intends to develop closer ties to Iran in order to strengthen its own position in the Non-Aligned Movement, and could not be expected to give much more support or welcome a tougher U.S. stance on Iran. (National Archives, RG 59, Central Foreign Policy File, D800164–0318) Vrhovec recounted his “very frank” conversation with Iranian Foreign Minister Ghotbzadeh on May 12. Vrhovec told Eagleburger that he had stressed with the Iranian Foreign Minister the need to free the hostages, that many prominent non-aligned leaders shared that view, and that, as long as the hostage situation continued, “it would be difficult for the non-aligned states fully to support the other ‘legitimate and progressive’ aims of the Iranian Revolution.” Vrhovec also told Eagleburger that Ghotbzadeh responded that Iran wants to free the hostages, but, in light of the recent U.S. rescue attempt, “the Iranian people ‘would neither understand nor accept’ their being set free now.” (Telegram 3751 from Belgrade, May 12; National Archives, RG 59, Central Foreign Policy File, D800235–0692)