60. Memorandum of Conversation0
SUBJECT
- Meeting with European Community Presidents—Questions Pertaining to the Coal-Steel Community
PARTICIPANTS
- [See Attached List]1
In his general statement M. Finet noted that the Common Market for steel is a real common market and is working well. One indication of the reality of this common market is a recent complaint by Germany that, following the devaluation in France, French steel was selling at lower prices than German steel in Germany. M. Finet said that the scrap problem had to be solved to assure continued high-level steel production. Although there is no shortage of scrap at this time, when steel production is very high, as it has been in the past, the Community is overly dependent on imported scrap.
The main current concern of the High Authority, M. Finet said, is the coal situation in the Community. Although the common market for coal was established early in the life of the Community, there is not really a common market for coal in the sense that there is for steel. When the Community first came into existence, there was a serious shortage of coal and the High Authority was obliged to force Germany to send some of its coal to Italy. At that time Community coal was so short that Italy had to import large quantities of United States coal. The problem now is a temporary surplus of coal in the Community.
M. Finet said that he realized that the U.S. was concerned with recent restrictions on the import of U.S. coal to the Community and said that the High Authority was not happy with these restrictions. Some of the coal production in the Community was “political production”, maintained because of certain pressures. What was needed, M. Finet said, was a policy of business expansion which would take up the slack in coal. The problem, however, is not only coal. There is a need, M. Finet said, for a general energy policy in the Community and the High Authority has responsibility for formulating this policy. A mixed group made up of representatives from the three Communities has been established [Page 131] to assist in the formulation of a general energy policy. For this task, M. Finet said that the executives of the Communities must have the cooperation of the member countries.
Mr. Dillon said that this was his first chance to talk with the High Authority on the coal problem. In the past he had the opportunity to speak with representatives of Germany on the coal problem and had expressed on these occasions the extreme concern of the United States regarding the restrictive measures on exports of United States coal to the Community. Mr. Dillon said he was grateful to the High Authority for the assistance it had provided in modifying the original German restrictions in the direction of making these more liberal. The United States felt strongly that the Community’s coal policy should be liberalized. There was a long-term need for U.S. coal in the Community and it might not be possible to assure the availability of U.S. coal in the quantities needed unless there was a stable market for this coal, free from violent fluctuations. Mr. Dillon said that the United States was aware of the fact that some coal production in the Community was carried on for political reasons and that he hoped uneconomic coal production would be eliminated. Mr. Dillon noted that the United States had closed uneconomic mines, resulting in the discharge of miners and that the United States coal industry and labor were disturbed that the Community was maintaining uneconomic mines and curtailing exports of United States coal, to the detriment of U.S. labor and industry.
Mr. Dillon then observed that the United States had heard reports that Germany was exerting pressure on Italy to take German coal in place of United States coal. Mr. Dillon said that if this happened it would be a cause of serious concern in the United States. He said that in light of the long-term need for United States coal in the Community it would be unfair to take advantage of a short-term situation. Mr. Dillon also asked M. Finet if he would comment on the High Authority situation vis-à-vis the member governments in light of the recent rejection by the Council of Ministers of the High Authority’s coal proposals. He asked whether the High Authority was considering any new proposals for submission to the Council.
M. Finet, in commenting on Mr. Dillon’s remarks, said that the High Authority had a program for closing down uneconomic mines in Belgium. It was hoped to reduce Belgian coal capacity by 2 million tons this year. The problem was not confined to Belgium, however, but extends also to the Ruhr. Since 1953, M. Finet said, 40 mines had been closed down in the Community.
M. Finet said that there had been a Belgian proposal for subsidizing the export of surplus Belgian coal to Italy. The High Authority had rejected [Page 132] this proposal and would continue to oppose suggestions of this nature.
Mr. Dillon said he hoped the High Authority would continue to encourage the closing down of uneconomic mines.
Mr. Bennett, Under Secretary, Interior Department, said that the Community’s coal import restrictions overlooked the question of the need for an over-all, unified energy approach. He noted that at the same time that coal was in surplus in the Community, Germany was said to be subsidizing the construction of new electric power plants which ran on oil. Mr. Bennett suggested that the Community and the member governments take an over-all look at the energy situation.
- Source: Department of State, Central Files, 840.00/6–959. Official Use Only. Drafted by Ruth Kupinsky and approved by Brewster on June 29. Regarding this meeting, see Document 59.↩
- See footnote 2, Document 59.↩