332. Paper Prepared by the NSC Planning Board0
DRAFT STATEMENT OF U.S. POLICY TOWARD AUSTRIA
General Considerations
1. The Austrian State Treaty, which came into force on July 27, 1955, ending the occupation and re-establishing Austria’s independence and sovereignty, marked the achievement of the major post-war U.S. objective in Austria. The price, however, which Austria paid for Soviet willingness to conclude the Treaty was a policy of perpetual military neutrality and heavy economic obligations to the Soviet Union payable over 6 to 10 years.
2. Austria, an integral part of free Europe, is a symbol of resistance to the Soviets. Austria is strategically important because of its position controlling important approaches to Western and Southern Europe and the Danube gateway to the satellites.
3. Soviet aims in Austria today are primarily to prevent close alignment with the West and to draw Austria as much as possible into the political and economic orbit of the USSR. Moreover, the Soviet Union hopes to use the Austrian example as an incentive to develop neutralism elsewhere. A weakening of Austria’s stability and pro-Western ties would constitute a serious setback for the United States.
4. Austria’s post-Treaty neutrality, as defined by law, prevents it from entering military alliances or allowing the establishment of foreign military bases on Austrian territory. Austrian political leaders have interpreted this neutrality to mean that Austria is free to cooperate with the West in political, economic and cultural fields and to accept outside assistance for its armed forces. The United States has encouraged Austria to adopt and maintain this interpretation of its neutrality (a) to ensure Austria’s Western orientation and (b) to minimize the adverse influence on Austria and other nations of Soviet pressures to broaden Austria’s neutrality.
[Page 840]5. In a note to the Austrian Government dated December 6, 1955,2 the United States (a) took cognizance of the Austrian constitutional law establishing neutrality and (b) recognized “the perpetual neutrality of Austria as defined therein.”
6. United in resistance to the Soviets, a coalition government of the equally powerful Socialist and conservative People’s Parties, which together now represent 89 percent of the vote, has maintained political stability in Austria since the war. Although removal of the common bond of opposition to Soviet occupation policies and the emergence of difficult political and economic problems have tended to exacerbate the basic differences between the two parties, the coalition will probably remain for some considerable time to come. Under present circumstances the creation of a stable one-party government seems highly unlikely. As long as relatively favorable economic and international conditions prevail, moderate forces in Austria will probably remain vigorous enough to ensure the maintenance of political democracy and stability.
7. The Austrian economy is prosperous and expanding. Since the currency reform in 1953, the GNP has increased by more than half—a rate of growth second only to Germany as the most rapid in Western Europe. Since 1953 foreign exchange reserves have more than doubled and the balance of payments position has remained strong, although it is forecast that the outturn will be less favorable in 1960 than in prior years. Austria’s financial position is, therefore, strong and Austria is now capable of providing increased amounts of multilateral and bilateral assistance to less-developed nations. It is anticipated that Austria will become a member of the newly organized International Development Association and will provide limited amounts of capital to the less-developed nations through that institution.
8. With its increased economic strength, Austria has taken some steps toward eliminating restrictions in its international trade and payments. However, more remains to be done, and the United States is urging the Austrians to take further steps to reduce reliance on these restrictions and discrimination, including the discrimination which arises from the bilateral trading arrangements which Austria maintains.
9. About 12 per cent of Austrian trade is with the Soviet Bloc. [3 lines of source text not declassified]
10. After the State Treaty became effective, the Austrian Government established an army [2 lines of source text not declassified]. The army (about 55, 000)3 and the internal security forces (about 27, 500) are now [Page 841] capable only of maintaining internal security and coping with minor border incidents. Any significant enlargement of the army is unlikely in view of Socialist reluctance to allocate large amounts for defense.
11. During the period 1955–1959 the United States programmed approximately $80 million to equip the Austrian army. Subsequent grant military aid has consisted solely of a small training program. [10-1/2 lines of source text not declassified]
12. While the Austrian Government has publicly stated its intention to provide adequate protection and care for refugees, continued Austrian cooperation in this program will require continued U.S. and international assistance and advice.
13. Austria’s principal international problem, apart from Soviet pressures, is its dispute with Italy over the South Tyrol/Alto Adige. Austria disregarded Italy’s suggestion that both countries refer the question to the International Court of Justice and in 1960, against U.S. advice, brought this dispute to the UN. The United States believes Italy and Austria should seek a solution (a) through bilateral negotiations, or, failing that, (b) by jointly referring the dispute to the International Court of Justice in a contentious proceeding (i.e., for a binding decision). On October 31, 1960 the UN General Assembly unanimously passed a resolution4 which (a) urges resumption of bilateral negotiations, (b) recommends that, if the negotiations fail, both parties should seek a solution “by any of the means provided in the Charter including recourse to the International Court of Justice or any other peaceful means of their own choice” and (c) recommends that Italy and Austria refrain from any action which might impair their friendly relations.
Objective
14. Maintenance of an independent and stable Austria, and encouragement of its continued pro-Western orientation and resistance to Communist pressures and subversion.
Major Policy Guidance
[Numbered paragraph 15 (7-1/2 lines of source text) not declassified]
16. Be prepared to treat any violation of the integrity of Austrian territory or neutrality as a grave threat to the peace.
17. Encourage the continuance of coalition governments.
18. Encourage Austria to raise and maintain armed forces (including effective reserves) adequate for internal security [1-1/2 lines of source text not declassified],
19. To this end, be prepared to provide Austria military equipment and training on a reimbursable basis and also to provide military [Page 842] training on a grant basis, keeping in mind (a) Austria’s interpretation of its military neutrality, and (b) the importance of avoiding Austrian dependence upon Soviet sources of supply.
[Numbered paragraph 20 (3-1/2 lines of source text) not declassified]
21. Seek to maintain Austria’s close economic ties with the West. To this end encourage Austria:
- a.
- To continue participation in international economic organizations of the Free World.
- b.
- To reduce reliance on trade and payments restrictions and discrimination including that arising from Austrian bilateral trading arrangements.
[1 paragraph (1-1/2 lines of source text) not declassified]
22. Consider negotiations with Austria for disposal of U.S. surplus agricultural commodities under Title IV of P.L. 480.
23. Urge Austria to contribute to the strengthening of Free World less developed areas, both bilaterally and through multilateral organizations such as the International Development Association, by providing increasing amounts of public capital and facilitating movements of private capital.
24. Continue the exchange-of-persons program and an active information program in Austria.
25. Continue to use all feasible measures to secure Austria’s increased acceptance of responsibility (a) to grant liberal asylum and protection to political refugees from Communist countries and (b) to help resettle the refugees and displaced persons or integrate them into the Austrian economy. Continue, as appropriate in U.S. interests, to assist in the resettlement and integration of refugees and displaced persons through U.S. and international agencies, utilizing both Titles II and III of P.L. 480, as appropriate.
8[Numbered paragraph 26 (2 lines of source text) not declassified]
27. Encourage Austria (a) not to bring its dispute with Italy over the South Tyrol again before the UN, and (b) to follow the recommendations in the resolution passed by the UN General Assembly on October 31, 1960 with particular emphasis on jointly referring the dispute to the International Court of Justice should bilateral negotiations fail.
- Source: Department of State, S/S–NSC Files: Lot 63 D 351, NSC 6020. Secret. Attached to the source text were a cover sheet; a memorandum by Bromley Smith of January 2, 1962, noting that the President had authorized recission of NSC 6020; a memorandum of January 18, 1961, by James Lay stating that the President had that date approved NSC 6020 and that it superseded NSC 5603; a transmittal memorandum by James Lay of December 9, 1960; a financial appendix with Department of Defense comments; and a memorandum by James Lay of December 27, 1960, submitting revised pages 10 and 11 to all holders of NSC 6020. None is printed. The draft statement of policy presumably had its origins with the OCB recommendation of May 18 to re-evaluate U.S. policy toward Austria; see footnote 3, Document 325. No previous drafts of the policy paper have been found.↩
- For text of the note, see Department of State Bulletin, December 19, 1955, pp. 1011–1012.↩
- [Footnote in the source text (2-1/2 lines of source text) not declassified.]↩
- See footnote 1, Document 331.↩