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ced to make savings of such an order that might call into question

our contributions to NATO and hence the viability of NATO strategy,

they must urge Ministers to begin by withdrawing from all non-NATO

commitments. They recognise that there will be severe political

obstacles to a decision to begin total withdrawal; and, to the extent

that these could not be overcome, either additional funds would need

to be found or further reductions made in our provision for our

hard-core NATO commitments. The reduction of our NATO Forces

significantly below their present levels would make it more difficult

to reinforce than at present.

Political Considerations

58.

Complete abandonment of our commitments and activities outside

the NATO area would have far-reaching implications for our defence

and foreign policy in general and serious repercussions in other

critical fields. It would reduce our standing in the world generally

and most particularly with the Americans who value the support we

give to Western interests outside NATO. Hence it would reduce our

bargaining power not only in various parts of the world but also in

allied councils. It would effectively end Commonwealth links in the

defence field. It would mean abandonment for the first time of HMG's

responsibility for the defence of our dependent territories, even

though some of them are under the potential threat of external

aggression; this would affect our political credibility and belief

in our readiness to honour our contractual and constitutional

obligations. The same considerations apply though to a lesser degree

with the partial withdrawal suggested in Option A2.

59.

We cannot escape some political and commercial damage if we

make any significant reductions in our non-NATO obligations. However,

the selective retention of some commitments and activities, some of

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