Foreign Relations of the United States, 1981–1988, Volume X, Eastern Europe

232. Memorandum of Conversation¹

Washington, May 31, 1985, 9:45–10 a.m.

SUBJECT

• Meeting with Yugoslav Prime Minister Milka Planinc (U)

PARTICIPANTS

• The President
• The Vice President
• Secretary of State George P. Shultz
• Secretary of the Treasury James A. Baker, III
• Secretary of Defense Caspar W. Weinberger
• Robert C. McFarlane, Assistant to the President for National Security Affairs
• Assistant Secretary for European and Canadian Affairs Richard R. Burt
• U.S. Ambassador to Yugoslavia David Anderson
• Paula Dobriansky, NSC
• Michael Petrovich, State Interpreter
• Prime Minister Milka Planinc
• Federal Secretary for Foreign Trade Milenko Bojanic
• Deputy Secretary for Foreign Affairs Budimir Loncar
• Yugoslav Ambassador to the U.S. Mico Rakic
• Foreign Policy Advisor to the Prime Minister Dragan Kontic

The President opened the meeting by welcoming Prime Minister Planinc to the United States. He noted that her visit continues a tradition of high-level bilateral consultations. The President reiterated our support for Yugoslavia’s independence, unity and territorial integrity and lauded Yugoslavia’s 1984 economic performance. He assured the Prime Minister that we will continue to give Yugoslavia full support in its efforts to stabilize and reform its economy. (C)

The Prime Minister thanked the President for the opportunity to visit the United States and extended warm greetings from the Yugoslav Presidency. She added that the President has a standing invitation to visit Yugoslavia. The Prime Minister also stressed the importance of continuing the high-level U.S.-Yugoslav dialogue. Such talks, she said, could help to avoid misunderstandings that sometimes adversely affect our relations. It is better to clear up these differences before they become serious. She contended that her visit had managed to achieve this very goal. (C)

Prime Minister Planinc then briefly mentioned her trade talks with Secretary Baldrige² and the need for expanded Yugoslav exports to the United States. She also noted that her discussions with Vice President Bush³ had been particularly frank. She had many questions about the U.S. Government’s readiness for economic cooperation and support, but these had been clarified in her talks with the Vice President. (C)

At this time, the Prime Minister queried the President on the prospects for detente and when a meeting with Gorbachev would be arranged. She remarked that such a meeting would be welcomed by Yugoslavia since it could possibly lead to a change in the present international atmosphere. (C)

The President replied that Soviet leaders have a standing invitation to meet with us. In the past, we have alternated between holding summits on U.S. and Soviet territory. Given the fact that the last summit was held in the Soviet Union, it is the Soviet’s turn to come to the United States. They have not yet agreed. The President went on to say that we have made some progress in U.S.-Soviet relations. Specifically, the second round of arms negotiations is underway in Geneva. We hope for the eventual, complete elimination of nuclear weapons, but are prepared to proceed with significant reductions in nuclear arsenals as a first step. Thus far, the Soviets have shown no willingness to negotiate seriously on this critical issue. (C)

The President also commented on Yugoslavia’s stabilization program. He said that we would support all steps that lead to a market economy which the Prime Minister indicated is Yugoslavia’s long-term aim. The President also mentioned that we value military consultations and cooperation with Yugoslavia and hope they will continue to develop in our mutual interest. He expressed satisfaction that bilateral military cooperation is proceeding well. (S)

Prime Minister Planinc indicated that she agreed with this assessment. (C)

Secretary of Defense Weinberger added that the U.S.-Yugoslav Joint Military Commission was functioning well and that now no obstacles remain to co-production of the aircraft engine. (S)

Secretary Shultz then remarked that he looked forward to the opportunity to meet with the Prime Minister over lunch to discuss U.S.-Soviet relations, arms control and other issues.⁴ (C)

At this time, the Prime Minister raised the issue of Yugoslavia’s proposal for a multi-year rescheduling agreement (MYRA). She noted that Yugoslavia was disappointed that we had not embraced this approach. She said that a MYRA is of great importance to the Yugoslav Government in that it would stabilize the positive economic trends which they had attained thus far. She pointed out that President Reagan’s December 1984 letter to President Djuranovic⁵ had given Yugoslavia hope that a multi-year rescheduling agreement would be concluded. They were disappointed when that support was not forthcoming. However, Yugoslavia looks forward to U.S. support for a MYRA in 1986. (C)

In response, Secretary Baker commented that we are pleased with Yugoslavia’s good economic performance in 1984. He also mentioned that we are aware that implementation of the stabilization program has been difficult. However, we could not support a MYRA at this time. Yet, we did move from a 12-month to a 16-month rescheduling. He also underscored the positive language in the goodwill clause of this year’s agreement. He ended by stating that we would be prepared to work with Yugoslavia next year to come to some acceptable arrangement. (C)

At this point, Prime Minister Planinc thanked the President for sharing his time and again, extended an invitation to visit Yugoslavia. (C)

1. Source: Reagan Library, Paula J. Dobriansky Files, Yugoslavia: Visit of PM Milka Planinc 5/31/85 (3). Secret. The meeting took place in the Cabinet Room. Planinc was in Washington for a private visit. The briefing materials for the meeting with Reagan are ibid. No drafting information appears on the memorandum of conversation. Dobriansky sent it to McFarlane on June 6 for his review and approval. (Ibid.)
2. No memorandum of conversation of this meeting was found.
3. No memorandum of conversation of this meeting was found.
4. No memorandum of conversation of this meeting was found.
5. See Document 230.