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the other would avoid any increase in expenditure over the level
upon which we had decided.
5. We fully endorse the hope expressed in your letter that
compensation for our reductions will ultimately be forthcoming
through increased co-operation within NATO by means of rationali-
sation, specialisation and standardisation; through further
exploitation of co-operative equipment programmes in NATO; and
through the re-allocation of resources from overheads and support
units to combat capabilities.
The
we propose, in
6. Your letter lays considerable stress on the political and
military consequences which our proposals are judged to have for
NATO's Southern Region. I recognise of course that there are
effects on the Southern Region; it was indeed implicit in the
priorities which we chose that this should be so. However, I
do not believe it right for that effect to be over-stated.
facts are that we propose to remain in Gibraltar;
present circumstances, to remain in Cyprus (though at a reduced
level of strength); and we shall remain in Malta until the
expiry of the Military Facilities Agreement in 1979. This being
said, I do accept that we should consider some of the compensatory
measures for the Mediterranean mentioned in your letter and in
the Military Committee memorandum, so long as they can be accom-
plished without any significant extra cost. As regards operations
in war, it will be clear from our original proposals that the
maritime and air forces withdrawn from the Mediterranean will be
assigned to SACLANT; any deployment of those forces to the
Mediterranean in time of war would in our view have to come about
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