Foreign Relations of the United States, 1964–1968, Volume XV, Germany and Berlin

156. Telegram From the Embassy in Germany to the Department of State¹

Bonn, July 7, 1966, 1835Z.

286. For the Secretary, Under Secretary, and Asst Sec Leddy. Subject: The German agenda. In preparation for the forthcoming meetings between Sec McNamara and DefMin Von Hassel scheduled for July 23–24, and between Chancellor Erhard and President Johnson probably on August 24–25, I believe it would be helpful to review the principal outstanding issues between the Germans and ourselves—in order to establish how they might best be dealt with.

1. Offset.

The present single greatest source of friction between ourselves and the Germans, which could be even greater in the future, is the offset agreement. Although the Germans have a year remaining to complete their agreed payments for the current two-year period (i. e., ending July 1, 1967) they are behind on pro-rata payments, even including the promised DM 1 billion pre-payment, and badly behind on orders. This has led to a natural apprehension on the part of responsible officials in the US Govt, whose consequent actions have been construed by the Germans as casting doubt on their commitment to meet their current obligations and as attempts to force them to buy weapons which they consider unnecessary. Strong German press attacks have been made against Sec McNamara and strong political attacks against Von Hassel and even Chancellor Erhard. The current issue of Stern has an article entitled “Why don’t you retire, Mr. Minister?” CDU Deputy Birrenbach told Amb Foster on July 2 that this issue could bring down the Chancellor’s government.²

Our immediate objective in this circumstance should, I believe, be to utilize the two meetings in such a way as to:

A) Reestablish an easy working basis of confidence and rapport between us such as existed at the time of the McNamara/Von Hassel Washington meeting of June 1964. For our part we should, I believe, be willing to make it clear that we have confidence that the Germans will meet the current payments offset. We should urge the Germans to include provision for the offset in their 1967 budget and continue our efforts to find weapons that the Germans will be willing to purchase without undue pressure. We should in public statements on this subject concentrate on the harmony and constructive aspects of our defense relationship, which are indeed very great.

B) We should, at the same time, lay the groundwork for the negotiation of a new offset agreement, since the beginning of a new orders period is only some six months away. We know that the Germans will attempt to better the present agreement, certainly through the inclusion of other than military items and possibly through a scaledown of the total. Under the assumption that the US has postponed action on a multilateral offset approach we should, I believe, determine as a matter of policy how far we are willing to go to meet the German desires and initiate negotiations. These should, however, be conducted at least at the Ministerial level since they will involve matters of great political sensitivity—considerations going beyond those which have in the past been discussed at the Sullivan/Kuss level.

My more complete views of the future of the offset are fully set forth in Embtel 4160,³ which I consider still relevant.

2. US troop levels.

We should, I believe, during the forthcoming meetings, make very clear US policy on the level of our forces in Germany and Europe, both with regard to any possible US unilateral withdrawal or as a complement to some future Soviet withdrawal. German doubts on the former have always been with us. Uncertainties concerning the latter have lingered since Sec McNamara’s testimony before the Senate Committee on June 21.⁴ My full views on this question are set forth in Embtel 165.⁵ In short, since there is to the best of my knowledge no present plan to reduce the level of US forces, we should continue to state this clearly. We should also point out that, although we hope that some day we will be able to reduce US force levels in Europe, complementary withdrawals are at present a moot question. Any Soviet withdrawal would have to be analyzed carefully by NATO itself, both in its political and military context, before we could determine what complementary action if any could be taken.

3. ANF-MLF-non-proliferation.

We should, I believe, also take advantage of these meetings to make it clear to the Germans that we do not wish to remove forever the possibility of a “hardware solution” to their nuclear sharing problem. The discussions we have had with other governments, however, since Chancellor Erhard’s meeting last December with the President,⁶ together with the development of Congressional attidues in our own country, make the prospects for such a solution look very dim. We hope, therefore, that the Germans will be content for the foreseeable future with participation in a successor organization to the McNamara Committee. My own views with respect to how this issue can best be handled are fully developed in Embtel 083.⁷ In essence, I believe that a new committee of limited membership should be formed—with broad powers in planning and decision—recommending, including not only NATO nuclear forces but our strategic forces. If this change of emphasis can be accomplished there is, I believe, some chance that a non-proliferation agreement, which I consider a very important objective, can eventually be achieved.

Otherwise, the Germans may some day find themselves in the embarrassing position of being the principal “hold-out” to a non-proliferation agreement.

4. US financial demands on Germany.

My views in this regard are fully set forth in Embtel 221.⁸ In short, I believe that we should set a strict and co-ordinated priority on the demands we make on the German Govt with respect to the use of their funds. Our priorities should, I believe, be as follows: a) offset agreement; b) pre-payment of US loans; c) suitable overall level of aid budget and new obligational authorities; d) only in rare cases should we press for specific changes in German aid allocations to particular countries or international institutions. These priorities should, I believe, guide our discussions on related issues during the upcoming meetings.

5. NATO crisis.

There is at this time little if any difference between the Germans and ourselves as to the actions which will have to be taken by the NATO as a result of the recent French initiatives. At some stage, however, there could well be a difference as to how to deal with French troops in Germany. When this negotiation comes to its “crunch,” which will presumably occur in Paris between the 14 and the French, Erhard will be under strong pressure from within the CDU/CSU to keep the French troops here under almost any conditions. One key issue in the negotiation will hinge around the question of the “automaticity” of French troops coming under NATO command. We should, I believe, in both upcoming meetings, stiffen the Germans against this eventuality. We should point out the danger to the integrity of NATO and its integrated command—in the event the French are able to retain their privileges without assuming clear obligations. We should point out that if there were to occur a disintegration of integrated planning and command, we would have to re-examine our NATO commitment to station troops in Europe. We will amplify our views on this question in a subsequent telegram.⁹

6. German reunification.

I do not believe that there is any chance that a reunification initiative would have any hope for success at this time. Our views as to how to handle the situation should the Germans raise the question are still as stated in our memorandum of September 27, 1965.¹⁰ We should, I believe, in the upcoming meeting between the Chancellor and the President, make clear to the Germans our continued interest in reunification and our willingness to consider at any time any proposal they might wish to make. We will be glad to see Four-Power (Western) discussion of the subject initiated—perhaps in a new forum created for this purpose. We will be glad to consider the possibility of a Four-Power commission of experts (including Soviets) plus German observers, which could be used as an umbrella for mixed (GDR-FRG) commissions. We can, however, offer the Germans no hope that this or any other proposal would be accepted by the Soviets.

7. Eastern Europe.

The German peace note of last March was symptomatic of their perceptible movement to the formulation of a more positive policy toward Eastern Europe. There are hopeful signs that the FRG intends to follow up this initiative: it plans to raise again the proposal for an exchange of declarations with the USSR on renunciation of force, and, according to Carstens (Embtel 4302),¹¹ is seeking a way further to soften its position on the Munich Pact. In order to keep up the momentum, we should encourage action on these two points during the Chancellor’s visit to Washington. In particular we should urge the Germans, without being too specific, to soften their present facade on the Oder-Neisse and Heimatrecht-self determination issues. We will amplify our views on this question in a subsequent telegram.

McGhee

1. Source: Department of State, Central Files,POL GER W–US. Secret; Limdis.
2. For McGhee’s comments on William C. Foster’s visit, see Foreign Relations, 1964–1968, vol. XIII, Document 183.
3. Not found.
4. See U.S. Senate, Subcommittee on National Security and International Operations, Committee on Government Operations, The Atlantic Alliance, Part VI (Washington, 1966), pp. 186–219.
5. Telegram 165 from Bonn, July 5, commented on reciprocal troop withdrawals from Europe. (Department of State, Central Files, DEF 6 US)
6. See Foreign Relations, 1964–1968, vol. XIII, Document 119.
7. Dated July 2. (Department of State, Central Files, DEF 12 NATO)
8. In telegram 221 from Bonn, July 6, McGhee expressed concern about U.S. demands for financial support. (Ibid., FN 12 GER W–US)
9. Not further identified.
10. Attachment to Document 130.
11. Not found.