Foreign Relations of the United States, 1977–1980, Volume XXVII, Western Europe

102. Telegram From the Embassy in the Federal Republic of Germany to the Department of State¹

5419.

Bonn, March 23, 1978, 1730Z

SUBJECT

• Genscher on US–FRG Relations.

Summary: In a meeting marked by an exceedingly warm atmosphere, Genscher (A) praised the President’s Wake Forest speech,² (B) spoke positively about Fed Chairman Miller’s recent remarks on anti-inflation policy,³ (C) opined that US–FRG relations were in good shape, and (D) stressed the need to increase parliamentary exchange visits. End summary.

1. US–German relations were the principal topic of my March 22 meeting with Foreign Minister Genscher. As he has done both publicly and privately in recent weeks, Genscher went to great lengths to accentuate the positive in US–German relations. He opened our conversation by noting that his daughter was presently in the US and had been sending back glowing reports along with a plea that she be allowed to remain there to study.

2. Genscher then asked me for my impressions of the state of German–American relations based on my home leave consultations.⁴ I noted that I had found great interest in our relations as well as concern about reported differences between us. I stressed that there was a feeling at the highest levels that our relations had improved in recent weeks and, indeed, had never been as negative as portrayed in the press. I noted that the President’s call to Chancellor Schmidt after his Hamburg speech was a demonstration of appreciation for his remarks as well as an indication of our interest in keeping things on an even keel.⁵ I told Genscher that the Secretary would soon be meeting with German journalists and that he, too, would take a very positive line on our relations. Secretary Blumenthal was also pleased with recent contacts with his German counterparts and believed that we were now more in harmony on economic positions. I said we appreciated Genscher’s own efforts (the Bild Zeitung article, background discussions with journalists and his defense of US–African policy in the Bundestag) to put a better perspective on our relations. In sum, I said I thought we were on the right track now.

3. Genscher agreed completely with this positive evaluation of our relationship. He termed our ties a “vital element” of German foreign policy and said he would continue to work hard to insure that this was reflected in the press. Genscher thought the Warsaw Pact states and particularly Moscow had contributed to the negative press commentary on our relations. He cited Communist efforts to split the Alliance on the ERW issue in this regard.

4. Genscher said German leaders had read with great interest and satisfaction President Carter’s Wake Forest address. He spoke warmly of the sections on defense policy noting that he and his colleagues were particularly pleased with the President’s emphasis on maintaining our military strength and on the US engagement in Europe. They also welcomed his remarks on flexible response and on the NATO long-term program to develop conventional strength. No less important was the determination expressed by the President to oppose Soviet-sponsored insurgency in the third world. Genscher said the West must make clear to Moscow that we have global responsibilities and a global policy. The Soviets must be made aware that their actions in one area of the world will have an effect on their overall relationship with the West. We cannot be indifferent to what happens in the Middle East or Africa since events there affect NATO security as a whole.

5. Genscher said our economic differences had been vastly overdrawn in the press. Both he and Economics Minister Lambsdorff had been pleased to read the remarks of Fed Chairman Miller on anti-inflation policy. They felt his statement meshed well with FRG strategy in this area. In addition, Genscher and Lambsdorff had the impression that Secretary Blumenthal’s recent statements on inflation were also in relative harmony with German positions and this was a very positive development.⁶

6. Genscher referred several times to the great importance he attached to an increase in parliamentary exchange visits between the US and Germany. He believed the present level of contact was insufficient, particularly among the younger parliamentarians. It was also necessary to broaden the base of parliamentary contacts. Genscher felt, for example, that contacts were fairly strong in the defense area, but that this was not the case in the economic and foreign policy spheres. Genscher had spoken recently to Bundestag President Carstens about the latter’s discussions in the US and they were in complete agreement on the need to increase parliamentary exchanges.

7. At the close of our discussion, Genscher suggested that the Foreign Office issue a press release noting that we had met in a particularly warm atmosphere and that our discussion had reflected the high degree of consensus that exists between the US and FRG. A statement to that effect was put out this morning.

Stoessel

1. Source: National Archives, RG 59, Central Foreign Policy File, D780128–0767. Secret; Priority. Sent for information to Paris, London, Moscow, and USNATO.
2. Reference is to Carter’s March 17 speech at Wake Forest University, in which he stated that the United States “will match, along with our allies and friends, any threatening power through a combination of military forces, political efforts and economic programs” and that “We continue to cooperate with our NATO allies in a strategy for flexible response, combining conventional forces and nuclear forces so that no aggressor can threaten the territory of Europe or its freedom, which in the past we have fought together to defend.” (“Address at Wake Forest University,” Public Papers: Carter, 1978, pp. 529–535)
3. Miller was sworn in as Chairman of the Federal Reserve on March 8. On March 9, he appeared before the House Banking Committee; on March 15, he appeared before the Senate Banking Committee; and on March 22, he gave an interview to a group of journalists. (Clyde H. Farnsworth, “New Fed Chief Sees Expansion at a Calm Pace,” New York Times, March 10, 1978, pp. D1, D5; “Early Carter Action to Raise Fuel Prices Urged by Fed’s Chief,” New York Times, March 16, 1978, pp. D1, D3; and Richard J. Levine, “Miller Warns Continuing High Inflation Will Make Fed Tighten Monetary Policy,” Wall Street Journal, March 23, 1978, p. 3)
4. Stoessel was on home leave from February 1 to March 19. (Telegrams 1899 and 4968 from Bonn, February 1 and March 19; National Archives, RG 59, Central Foreign Policy File, D780048–0963 and D780122–0041)
5. See Document 168.
6. On March 14, Blumenthal discussed inflation before a Senate Finance Subcommittee; on March 18, a joint Blumenthal-Schultze memorandum on inflation was reported in the press. (“Blumenthal: Inflation Top Worry,” Washington Post, March 15, 1978, p. D8; Clyde H. Farnsworth, “Inflation, Not Jobs, is Worst Problem, Carter Aides Report,” New York Times, March 18, 1978, pp. 1, 31)