SECRET
SECRET
Page 236
2.
FOREIGN EXCHANGE COSTS OF BRITISH FORCES IN GERMANY
(Previous Reference: OPD(67) 15th Meeting, Item 2)
The Committee had before them a note by the Secretaries (OPD(67) 60) to which was attached a report by an interdepartmental
working party of officials on the future approach to the foreign exchange
costs of British forces in Germany.
THE FOREIGN SECRETARY said that the report brought out the conflict
between the need to reduce the foreign exchange burden of our forces in
Germany and our political interest in avoiding any further redeployment
of forces from Germany. Since the time when Ministers had decided, in
the context of the 1967-68 offset agreement, to redeploy to the United
Kingdom one army brigade and one air force squadron starting on 1st January 1968 and had considered the possibility of the withdrawal of
a second brigade and further air force squadrons, the situation in the North Atlantic Treaty Organisation (NATO) had reached a critical point.
In the course of the offset negotiations earlier this year we had drawn
heavily on United States and Federal German goodwill, and our other
allies in NATO had been disturbed by the manner in which decisions to
redeploy forces had been reached in tripartite discussions between
ourselves, the United States and Federal Germany. Now the Germans were
considering reducing their contribution, as were the Belgians, while the
French might be on the point of deciding to withdraw entirely from the
Alliance. Any suggestion therefore that we were contemplating further
redeployment of our forces was not only likely to have a serious effect
on future offset negotiations but might also bring about a further series
of withdrawals of forces from the Alliance and lead eventually to its
disruption with consequent grave risk to our national security. We had
recognised in the recent review of our defence policy that Europe should
be given the highest priority in our defence effort and that it remained
a vital British interest to ensure NATO's continued strength and
solidarity. These considerations suggested that we should aim to secure
a long-term settlement of the problem of the foreign exchange cost of
our forces in Germany. The most satisfactory solution was to increase
the sales of British arms and equipment to the German forces. We should
seek to negotiate long-term arrangements with the Federal German Government for collaborative projects in military research, development and production which both countries would accept as the right means in the long term for obtaining equipment for their forces and which would
Page 236
SECRET
Page 236