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While the Germans had previously been anxious to maintain force levels
in NATO, they would now be glad to use threatened force withdrawals by
other countries as an excuse for unilateral reductions of their own.
The offset agreement we had been able to secure for 1967-68 had been the
result at least as much of United States anxiety to preserve the Alliance
and resist pressure for United States force withdrawals from Europe as
of pressure by us on the Germans.
THE PRIME MINISTER, summing up the discussion, said that the Committee agreed in principle with the new approach to the problem of the foreign exchange cost on our forces in Germany proposed in the report by officials and with the Foreign Secretary's view that it would be
unwise at this juncture to indicate that we proposed to withdraw further forces from Germany. Our Ambassador in Bonn should make an early approach
to the Federal German Government on arrangements for collaboration on
military research, development and production, and the Committee would
wish to consider the question again in the autumn when the prospects of obtaining German agreement to such arrangements might be clearer.
Consideration should be given in good time to the alternative possibility of accepting credits from the Federal German Central Bank, perhaps as a method of financing United Kingdom overseas aid.
The Committee
(1) Agreed in principle that we should seek to make long-term
arrangements with the Federal German Government for collaboration on military research, development and production on the lines indicated in paragraphs 30 and 31 of OPD(67) 60.
(2) Invited the Foreign Secretary to instruct our Ambassador
in Bonn to take an early opportunity to approach the Federal German Government accordingly.
(3) Agreed to consider later in the year the problem of the
foreign exchange cost of our forces in Germany in the light of the German reactions to the approach at (2) above.
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