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(b) To give Dr. Adenauer the written offer of a common programme as
requested.
I understand that the weight of technical opinion is against such a project on technical and security grounds, and that our important technical exchanges with the United States on guided missiles might be stopped by the Americans, for security reasons, if we embarked on a common programme with the E.D.C. countries.
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(c) To attempt to get Dr. Adenauer to agree that these weapons should not be made in Germany except by unanimous E.D.C. Council of Ministers' decision, but without making any offer to embark on a common programme. Instead, we would only offer to enter into early dis- cussions with the E.D.C. countries (and the Americans) to try to work out a joint programme. This line might be justified on the grounds that we cannot enter into any firm commitment without technical examination and consideration with the other E.D.C. countries, whom we might undertake to approach.
I am advised that Dr. Adenauer would be most unlikely to accept any offer on these lines, on the grounds that he needs a firm undertaking to satisfy his own public opinion, as he cannot give up the right to make the most up-to-date weapons in Germany for the protection of his country against Russian air attack, unless there is a common programme.
(d) To agree that short-range guided weapons for anti-aircraft defence should be removed from List II of the E.D.C. draft treaty, subject to very careful definition.
I understand that there would be no serious technical or military objection to this course. It is believed that the Germans are four years behind the Russians, the Americans and ourselves, and that the risk. in allowing them to try to make short-range guided weapons is, therefore, negligible. The Chiefs of Staff concluded at their meeting on 28th April that "we had no alternative but to accept the German proposal, and should therefore support the United States and accept the definition which permitted guided missiles for anti-aircraft defence."
5. The objections I see to course 4 (d) are political and, if my colleagues share them, I see no alternative but to instruct Sir I. Kirkpatrick on the lines of 4 (c) above. If this attempt fails, as it almost certainly will, we may have to fall back on course 4 (d).
Foreign Office, S.W. 1,
13th May, 1952.
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(THIS DOPageOfS200E PROPERTY OF HER BRITANNIC MAP150∞ £20ERNMENT)
SECRET
C. (52) 162
14th MAY, 1952.
CABINET OFFICE
RECORD COPY
COPY NO.
79
CABINET
GERMAN FINANCIAL CONTRIBUTION TO DEFENCE.
Memorandum by the Secretary of State for Foreign Affairs.
In accordance with the decision of the Cabinet on 7th May, (C.C.(52) 50th Conclusions, ivlinuto 4) I asked our Ambassador in Washington to make representations to vir. Acheson, urging that the United States Government should support us in the negotiations on the German financial contribution to defence, to ensure that in the period up to 30th June, 1953 the full Deutschmark requirements of the Allied forces in Germany are met from this contribution. Those require- ments are for expenditure at the annual rate of DM 6.8 milliard, a figure which I agreed upon with Mr. Acheson and M. Schuman in February as a basis for negotiation. Mr. Acheson told Sir Oliver Franks that he was in agreement with us, subject only to the qualification that he still believed, as he had told me in February, that the Allied forces could, by making further economies, reduce somewhat this rate of expenditure and thus make it easier to ensure that in this period there would be enough money both for the Allied forces and the German forces within the agreed German contribution to defence of DM 850 millions a month from the date of entry into force of the Contract.
2.
In the course of tripartite discussions in the Allied High Commission, both the French and American representatives have stated that in their view it will be necessary in order to secure agreement with the Federal Government to accept some reduction in the Allied figure, and that so far as their forces are concerned, they would be prepared to do so. A percentage cut of 15% has been
suggested by the French, and the Americans would probably accept a similar figure. The United Kingdom High Commissioner has been instructed not to agree to any reduction in our share of the total Allied budget but to propose that the division of the German total contribution should be fixed only for the first six months after the entry into force of the Contract, which should take us at least until 31st March, 1953, and that the arrangements for the later period should be settled by later agreement. During the first six months there should be enough money both for the full Allied requirements and for the needs of the German forces. The Cabinet gave authority for this on 7th May.
3.
It is possible that we may reach a solution on this basis, but I do not feel at all sure that this will be so. Both the Americans and the French are ready to reduce their rates of expenditure, and are likely to press that sufficient reductions should be made to admit of the costs of Allied and German forces being covered up to 30th June, 1953. I do not think that it would be politically possible to insist that if a cut has to be made we alone should escape the effects. I expect therefore to be under severe pressure to make some contribution to the reduction of the Allied total by accepting a proportionate cut in the expenditure of the United Kingdom forces in Germany.