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

44. Telegram From the Department of State to the Embassies in Bulgaria, Czecholslovakia, Yugoslavia, Poland, Hungary, and the Soviet Union¹

Washington, December 16, 1980, 2247Z

332554. For the Ambassador from Barry. Subject: US Policy Toward Eastern Europe Following a Soviet Intervention in Poland.

1. (S-entire text.)

2. The following is a draft of a paper now being prepared to deal with the question of our policy response in Eastern Europe to a Soviet intervention in Poland. We need to get this upstairs by COB December 17 and would appreciate any substantive comments you have to make in the meantime. Please restrict distribution to yourself and the DCM and slug any replies Stadis—EUR only. Please do not refer to it in other communications.

Begin text:

—It was easy to rationalize our decision last January not to impose sanctions against the Warsaw Pact countries of Eastern Europe for the Soviet invasion of Afghanistan.² Furthermore, the policy of differentiation which we enunciated at the time worked—the countries of Eastern Europe clung eagerly to their relations with the US and Western Europe despite public and private Soviet complaints that we were trying to divide them from their allies. The policy which we have pursued over several administrations has encouraged diversity and evolutionary change in Eastern Europe. In fact, it has contributed to the independence in foreign policy which has created such problems for Moscow in Romania respectively, and to the domestic pluralism in Poland and the economic reform in Hungary which have already brought those countries some way back toward Western models.

—We should not lose sight of the fact that the economic and political forces which brought about the situation in Poland are also at work in the rest of Eastern Europe. The very fact that the East Germans, for example, are so afraid of Western influence and presence should point us in the direction of getting more involved in Moscow’s back yard—discreetly, but in concrete ways—rather than reducing our ties and influence. Our objective should be to divide the East, not drive it together by intentionally apportioning more blame to the raped than the rapist, as we have been accused of doing with Czechoslovakia after the 1968 invasion.

—Yet we should be under no illusion that it would be possible to continue our policy without change in the wake of a Soviet-sponsored Warsaw Pact intervention in Poland. In the first place, some of the Warsaw Pact countries would no doubt participate in an intervention in Poland, thus distinguishing this from the case of Afghanistan. Secondly, both Soviet pressures and the grave deterioration in East-West relations in the wake of a Polish intervention would create new divisions in Europe and limit Eastern European freedom of action. Thirdly, public opinion here and in Western Europe would demand some actions against a Polish Government which suppressed the independent trade unions by force or East European Governments which participated in an intervention in Poland. US unions, for example, would no doubt take matters in their own hands and refuse to handle Polish ships and aircraft.

—While we must consider an appropriate policy response concerning Eastern Europe in advance and discuss it with our allies, we need to be careful not to lock ourselves into a policy response which might turn out to be incorrect in the event. We must recognize that intervention in Poland is the doing of the Soviet Union clients. They will respond with varying degrees of enthusiasm, with the GDR certainly and Czechoslovakia probably egging Moscow on, Bulgaria reticent, Hungary obviously reluctant and Romania perhaps dissociating itself. While some Eastern European military units may go into Poland, they will probably only have a symbolic role to play as was the case in Czechoslovakia in 1968. There is also the question of the general scenario under which any intervention might take place and the strong possibility that it will be under the guise of “Warsaw Pact maneuvers” or some kind of invitation—perhaps genuine—from the Polish Government. Our policy response in Eastern Europe will have to take all of these factors into account.

—There is an important tactical point as well. Our allies are prepared to agree that a strong policy response is required vis-a-vis the Soviet Union. They are probably prepared even to sacrifice some important economic interests to make such a policy response. However, they will not be prepared to agree that the same or similar measures should be automatically applied to Eastern Europe—for all the reasons above plus others. The most serious objections would come from the FRG, as Schmidt would certainly not be ready to sacrifice the future of inner-German relations as part of a response to Soviet intervention in Poland. The question of specific steps to be taken in Eastern Europe could sidetrack the discussion of measures to be applied to the Soviet Union, and over the longer term, a US effort to bring the Europeans along on sanctions against Eastern Europe would run into considerable resistance and play into the hands of Soviet efforts to divide the US from its allies. We must, in this regard, keep well in mind the fact that the Western Europeans have gone considerably farther than we in building economic and political relations with Eastern Europe.

—A similar general consideration to be borne in mind is that of reversibility. If the cause of sanctions against Eastern Europe is Soviet/Warsaw Pact intervention in Poland, what would be the logical cause of removing these sanctions? Withdrawal of Soviet troops from Poland? A Polish Government “acceptable to the Polish people”? In other words, whatever measures we impose will be with us for a long time unless we want to run the risk of being perceived as inconsistent in our policy.

—These considerations argue for moving ahead slowly and cautiously in planning our policy response in Eastern Europe. While we should look at the range of political and economic steps open to us and calculate their costs and benefits, we should not be “drawing up lists” and seeking allied agreement to them. In our consultations with others, we ought to confine ourselves to general observations along the above lines rather than trying to get specific as we are on the Soviet case. Our public posture in the event of a Warsaw Pact intervention ought to be to place the blame squarely on the Soviets while acknowledging that our attitude toward Eastern European participants cannot help but be affected by the nature and enthusiasm of the support they provide to Moscow in any actions taken against Poland.

General Considerations

—As a general rule of thumb, we believe that our policy response toward Eastern European participants ought to concentrate on refusing to do things in the political and economic area rather than imposing sanctions or embargos which will be difficult to lift in the future.

—Obviously our political relations with Warsaw Pact participants will worsen after an intervention and we will want to take steps—in the UN, at Madrid, and in US and allied public statements—taking them to task for their violation of Polish sovereignty while making it clear that we hold the USSR—not the peoples or Governments of Eastern Europe—to blame.

—It will be very much in our interest to measure our response in terms of the amount of intervention; thus, a token participation by an EE country would logically call for a lesser response than what we did vis-a-vis Moscow.

—While not imposing a ban on high-level contacts with Eastern Europe—which make Moscow uncomfortable—we will want to hold back for several months.

—Yet we would want to continue and even expand where possible less visible cultural exchanges and mutually beneficial scientific and technical exchanges.

—We would not want to extend to Eastern Europe our policy of terminating or suspending US-Soviet bilateral agreements. This would mean keeping MFN in place for Poland, Hungary and Romania as well as bilateral civil aviation and maritime agreements.

—However we would no longer be able to differentiate between the USSR and the rest of the Warsaw Pact (except Romania) in the area of technology transfer. Assuming Romanian opposition to intervention in Poland, we would want to develop a really meaningful differentiation in the US Government and in COCOM.

—We would not propose an embargo on grain sales to Eastern Europe, as neither the Allies nor the American farmer would support such a move. At the same time we would shift to a “cash-and-carry” policy where appropriate to place maximum burden on the Soviet economy to feed Eastern Europe. We would also continue to warn that any diversion of US grain to the USSR or substitution of US grain for domestic products shipped to the USSR would lead to extension of the embargo.

—We would not suspend Export-Import Bank financing for Eastern Europe. (In any event US and European private banks which make up 70pct of the debt exposure would drastically cut back on new loans and we would encourage them to limit their activities to roll-over of outstanding debt. Similarly, US business interest in large projects in Eastern Europe would decline.)

—Against the background of the overall policy approach, there follows a country-by-country discussion of policies toward each Eastern European Government.

Poland

—Here we face the most serious dilemma. The Polish Government is likely to become heavily involved in any intervention scenario, and Kania or his successor will be pursuing a repressive policy. Yet neither the US Government nor the US people—Polonia in particular—will want to punish the Polish people for being invaded. Poland’s already disastrous economy will decline still more precipitously in the face of passive resistance by an angry populace. We want the Soviets to pick up the bill, and we don’t want US grain to feed a Soviet army of occupation. Yet the Poles will need food, and a number of Americans will want to provide it.

—American labor will probably take matters into its own hands if the past is any guide. Dock workers boycotted ships bound for Poland during the August strikes, and they will do no less if Solidarity is crushed and its leaders imprisoned. The US Government would hardly want to argue against such action, or against similar boycotts of Polish airliners. Yet we would recommend against an embargo on grain sales which would be unpopular, superfluous and difficult to lift in the future.

—CCC is another matter. Our very sizeable exposure in Poland has been a political gesture, tied to our support for conciliatory Polish policies toward the workers. On financial and economic grounds, we would want to cut back our exposure. This would also force the Soviets to supply hard currency for new grain purchases. This points to a policy of no new CCC credits, but continued grain sales (assuming no diversion to the USSR) and eventual lifting of a longshoreman’s boycott, on a cash-and-carry basis.

—On other economic measures, we suggest a formal turn-down of the Polish request for further concessional economic assistance. We presume our allies would react similarly, and that this combined with the shrinkage of private credit would force Poland to default and to request rescheduling. We would insist on a multilateral approach and tough financial and economic conditions designed to get the Soviets to bear as much of the burden as possible.

—While supporting an end to any kind of economic assistance to the Polish Government, many Americans will support private assistance to the Polish people provided it can be monitored to insure against diversion to the USSR. We should support Catholic Relief, CARE, Project Hope and other private organizations ready to act as transmission belts for assistance. UN agencies probably would not get involved because of the Soviet angle.

—In other areas we would suggest:

—Letting EXIM financing seek its natural level—which will be very low given Poland’s financial problems.

—Ending any especially favorable treatment on fish allocations.

—Dropping any effort to fund cooperation in science and technology, which would mean that the cooperative program would grind to a halt for the present.³

Romania

—Romania is another special case. Ceausescu appears to have made a genuine effort to head off Soviet intervention and he may not even lend rhetorical support to any action. If he does not, our aim should be to find new ways of supporting Romania—consonant with their wishes—and providing incentives for continued foreign policy independence in the fact of growing Soviet pressure. Some suggestions:

—Scheduling a high-level visit to Romania if the Romanians want one.

—Supporting Romania’s bid to host the next CSCE review conference, if we can work out a way not to offend our Belgian allies who have put forward Brussels as a site.

—Acting quickly on Romania’s request for a COCOM-controlled aileron drive assembly for the fighter they are producing with Yugoslavia.

—Establishing a meaningful differential in US export control regulations and COCOM to permit prompt gray-area exceptions for Romania.

—Approving some $100 million of Romania’s $450 million request for CCC loan guarantees.

—Supporting Romania in the IMF/IBRD, particularly the power station loan coming up this month.⁴

GDR

—The East Germans have clearly been urging intervention on Moscow. While they may not be given much of a military role because of the incendiary effect this would have in Poland, they will certainly join in Soviet action in some fashion.

—The East Germans are the prime candidates for retaliatory measures. Yet we have very little going with them in the first place. And the West Germans, who do, will not want to do anything for fear of giving Moscow an excuse to squeeze Berlin and the inner-German relationship.

—Aside from the general extension of a COCOM no-exceptions policy to cover Eastern Europe, we believe that the most appropriate response in dealing with the GDR would be:

—A marked cooling of political relations across-the-board.

—Refusal to discuss MFN or conclusion of a cultural agreement for the foreseeable future.

—Encouragement of restriction of private credits to the GDR and an active policy of discouraging US business from involvement in major projects involving the GDR.⁵

Czechoslovakia

—Czechoslovakia will presumably be required to support actively a Soviet intervention and may even play a military role larger than the GDR. The Western Europeans will be less sensitive about steps taken against Czechoslovakia than about those taken against the GDR. Our own relations with Czechoslovakia are not good and there are few areas where we could take meaningful action aside from our general technology transfer policy.

—One area of importance is the claims/gold negotiation. We have asked for a $105 million settlement and the Czechoslovaks have offered less than half of that. In the wake of Soviet intervention the prospects for a negotiated settlement would be very poor. Our response could be to insist on a settlement at or near the US proposal and, if this is not forthcoming, report to the Congress that no negotiated settlement is in sight. This would lead to passage of legislation vesting the gold and investing it in interest-bearing securities which could be used to pay off the US claimants.

—Other possible steps include:

—Refusal to discuss MFN.

—Refusal to discuss signature of the US-Czechoslovak Cultural Agreement.

—Pressures on US firms not to engage in large projects with Czechoslovakia.⁶

Bulgaria

—Bulgaria is likely to be a lukewarm supporter of Soviet action in Poland. They would certainly lend their rhetorical support and possibly even a small military unit but they would take refuge in the thought that Poland is far away and Bulgarian interests not at stake.

—There are two specific steps we could take with Bulgaria to express our displeasure.

—Refusal to pursue further the Bulgarian initiative to discuss MFN.

—Indefinite postponing of the signing of the US-Bulgarian Maritime Agreement.⁷

Hungary

—Hungary is likely to be the least enthusiastic supporter of Soviet action in Poland next to Romania. They have evidently been pressured by the Soviets, East Germans and Czechoslovaks to take a more outspoken stand on Poland and would certainly go along formally with any kind of Warsaw Pact action. Yet their heart would certainly not be in it and they would fear greatly for Hungary’s increasingly beneficial image as a country adhering only formalistically, where possible, to the alliance with Moscow. We have made more progress in our relations with Hungary over the last years than with any other EE country and it would be contrary to our interests to penalize an obviously reluctant partner in a Warsaw Pact undertaking by taking steps we will not be able to reverse.

—Aside from a political cooling, the only concrete step we suggest taking toward Hungary is to cancel a proposed visit by a DOE delegation set for early next year.⁸

Yugoslavia

—We should move immediately to reassure the Yugoslav leadership (and to warn Moscow) that our policy of support for Yugoslavia remains firm and steady. Political, and perhaps military, consultations will help to determine Yugoslav desires and to demonstrate our resolve to friend and foe alike.

—Yugoslavia has already expressed its opposition to Soviet intervention in Poland and would be expected to follow through after a Soviet move by attempting to mobilize nonaligned and Third World sentiment against the intervention. While at present there is no evidence pointing toward a direct Soviet/Pact military threat against Yugoslavia, the Yugoslav leadership would be apprehensive about Soviet intentions and would welcome and perhaps seek out expressions of U.S. political and military support. At the same time the leadership would be extremely sensitive to any signals which might provoke Moscow. While we need not subordinate our interests to those of the Yugoslavs, we should attempt to consult with the GOY prior to announcing those steps we have decided to take with regard to Yugoslavia.

Those steps would include:

—Publicly reiterating U.S. policy of support for Yugoslavia’s independence, territorial integrity and unity.

—Suggesting immediate political, and if the situation warrants, military consultations to discuss further steps.

—Consulting with key allies to encourage similar actions.

—Taking steps to hasten delivery of pipeline military items, accelerating projected military training programs, and reviewing previously denied high technology weapons requests.

—Considering reprogramming to meet possible GOY requests for FMS credits.

—Intensifying measures against U.S. based anti-GOY terrorism.

—Being prepared to offer currency swap arrangement to bolster Yugoslav reserves if commercial bank lending dries up in the aftermath of Soviet invasion;

—Making a number of small but symbolic gestures in areas such as civil aviation, trade preferences (GSP), and eligibility for aid procurement.

—Renewing invitations for postponed visits by high-level Yugoslav nuclear power delegation and Foreign Trade Secretary Rotar.⁹

Muskie

1. Source: National Archives, RG 59, Central Foreign Policy File, D800599–0343. Secret; Immediate; Stadis. Drafted and approved by Barry. No final version of the paper quoted in this telegram was found.
2. See footnote 5, Document 39.
3. In telegram 12654 from Warsaw, December 18, the Embassy endorsed the arguments in the paper and expressed strong support for continuing a policy of differentiation among Eastern European states. (National Archives, RG 59, Central Foreign Policy File, D800601–0996)
4. Bucharest was not among the addressees, and no response from the Embassy in Romania was found.
5. No response from the Embassy in East Berlin was found.
6. In telegram 4597 from Prague, December 17, the Embassy reported its agreement with the general thrust of the paper, but stressed that the United States should make a best effort to finalize negotiations on the Gold/Claims agreement. (National Archives, RG 59, Central Foreign Policy File, D800600–0376)
7. In telegram 3315 from Sofia, December 17, Ambassador Perry cautioned that the paper did not address U.S. policy in case of an internal crackdown by the Polish regime. Perry recommended that the Department not “‘set’ policy responses so that possible nuances of the situation can be ignored.” (National Archives, RG 59, Central Foreign Policy File, D800599–0886)
8. In telegram 6534 from Budapest, December 17, Ambassador Bergold agreed with the premises of the paper and stressed that the policy of differentiation had served well U.S. policy in the past in Hungary and had “encouraged Hungary’s diversity and evolutionary change within the bloc.” (National Archives, RG 59, Central Foreign Policy File, D800599–1057)
9. In telegram 10083 from Belgrade, December 17, the Embassy noted that the Department had taken into account its previous recommendations (see Document 300) and that it had nothing new to add to its previous cable. (National Archives, RG 59, Central Foreign Policy File, D800599–1100)