Page 71
SECRET
SECRET
Page 71
2. FOREIGN EXCHANGE COST OF BRITISH FORCES IN GERMANY (Previous Reference: OPD(67) 7th Meeting, Item 1)
THE FOREIGN SECRETARY said that the situation in respect of German offset payments had now been clarified. A spokesman of the Finance Ministry of the German Federal Republic had stated that, in the coming financial year, civil purchases in this country to a value of £22 million would be made in an offset context, together with purchases of military
equipment, which though they could not yet be precisely defined, had been
estimated in background briefing at a value of £8-9 million. These
arrangements were for one year only and would not match the foreign exchange costs of our forces in Germany. Preparations for the withdrawal
of forces from Germany should therefore proceed and we should take a firm
line in the tripartite discussions due to start on 27th February on our
need to withdraw forces from Germany if the full foreign exchange costs
of these were not met.
In discussion it was agreed that our delegation to the tripartite
talks did not need further instructions. Although it would be necessary
in these talks to deal with strategic as well as financial and economic
matters in order to pave the way for a withdrawal of forces that could be justified to the Western European Union (WEU) Powers and to the North Atlantic Treaty Organisation (NATO) on military grounds, it should be made
clear that the urgent problem for us was the financial one. The main
discussion of the strategic issue would take place in NATO. As regards
the timing of the withdrawals of forces from Germany it was noted that
providing agreement to that effect were reached with our allies it should
be possible, without breaching our agreement with the United States, to
make the necessary arrangements with WEU and NATO and give notice to those
of our forces which were to be withdrawn by the time the NATO Defence
Ministers met in May. Planning for force withdrawals should proceed on this basis, subject to agreement eventually being reached.
The Committee then considered progress with the arrangements to accommodate troops and families to be withdrawn from Germany to this
country.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (MR. MELLISH) said that the programme for accelerating the construction of houses for service families by the Ministry of Public Building and Works and the emergency programmes for purchasing houses to meet requirements of forces to be withdrawn from the Far East and from
Germany were going well. The building programme against normal
-7-
SECRET
Page 71