740.5/10–1551: Telegram
The United States Delegation at the Tripartite Talks on German Financial Contribution to Defense to the Secretary of State 1
1847. From USDel Ger fin. Tripartite comite on Ger fin contribution to defense agreed at October 15 mtg to estab working party to [Page 1655] recommend Ger total fin contribution from 1 Apr 1952 to 30 June 1954. Working party will take into account Feb criteria and any criteria developed by TCC,2 and report October 22. Comite noted TCC Executive Bureau request for preliminary country analysis (ref Repna circular 2, October 143). It agreed results its studies shld be transmitted TCC for info but that it wld not be feasible for comite, if TCC so desired, to prepare country data on Ger mentioned ref circular.
US submitted draft terms of ref working party on Allied costs in Ger calling for development of cost estimates for support Allied Forces in Ger. Under US draft, working party was to develop costs on basis HICOM manual occupation costs but to exclude items not representing true defense costs.
Brit proposed including in study all “essential Allied expenditures in Ger”. US rep stated comite’s terms of ref included only fin support Allied Forces and Brit proposal contrary FonMins agrmt. Brit attempted justify position on ground all Brit staff in Ger needed for support of forces and are now covered by occupation costs. US rep pointed out contract supposed to provide new regime.
Fr stated they cld not accept US proposal since it did not take into account EDC and was inconsistent with their proposal to allocate funds for Allied costs on lump sum basis. They explained lump sum wld be divided among Allied powers perhaps on basis number troops, and each power wld be free to spend funds for such purpose as it desired. (At times in discussion Fr talked of lump sum as applying to US and UK only; at other times they appeared to have in mind that it wld also apply to Fr.
US rep replied proposal to estab cost data was without prejudice to policy issues. Data needed to estab reasonableness of any proposals for settlement, including possibly lump sum. Brit supported this point.
Fr flatly refused to submit data on future Fr costs in Ger, stating these costs wld all be covered by EDC budget. They also indicated that for same reason they wld not be able to participate in discussion of Ger costs. At same time they said they cld not provide any info as to what Ger EDC contribution wld be. They suggested working party examine US and UK costs and consider method for making allocation as between these costs and Ger contribution EDC, it being clear latter wld have full priority. This was unacceptable to US and UK dels.
US rep made various efforts to find compromise solution which wld permit cost study to be undertaken without prejudice policy issues. These were unsuccessful. It was eventually agreed discussion provided no basis for carrying on work. US again urged Fr consider interim solution proposed by US Oct 13. Fr said they wld have to study problem and possibly consult their govt.
[Page 1656]During course discussion UK rep stated any arrangement re Ger contribution EDF wld require tripartite agrmt. Fr rep said this raised important question but did not discuss point.
Throughout discussion and in later private discussion among three reps, US rep continued to place emphasis on practical aspects problem and impossibility working out within next several weeks principles which wld govern relations between EDC and non-EDC countries, particularly in view of fact EDC fin arrangements not yet completed. US rep again proposed discussing EDC relationship in Paris, but Fr evinced no interest.