CAB129-37 — Page 78

Printed for the Cabinet. October 1949

SECRET

C.P. (49) 208

18th October, 1949

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EUROPEAN POLICY

MEMORANDUM BY THE SECRETARY OF STATE FOR FOREIGN AFFAIRS

This paper, which is circulated for the information of my colleagues, discusses the question whether the aim of European policy should be the creation of a third world power or the consolidation of the Western world.

I. INTRODUCTION

Until about the end of 1947, when the Great Power system known as the Council of Foreign Ministers broke down, it was assumed, with decreasing confidence, that the general structure of peace would be based essentially on co-operation between the United States, the Soviet Union and the United Kingdom, which to some extent might be taken as representing the British Commonwealth and Empire. The breakdown on the question of Germany, how- ever, destroyed this conception, perhaps temporarily, perhaps for ever. Although the United Nations was maintained as a kind of symbol of a real world system, and no doubt in the expectation that it would ultimately prove possible to revert to it, it was then clearly necessary to cast around for some alternative system of security which would be capable of maintaining peace for a long period to

come.

2. This process of consolidating the non-Communist world really began in June 1947 with the announcement of the Marshall Plan and my acceptance of it. It passed from the economic to the political and military sphere early in 1948. At that time I envisaged action in three stages. The first stage was the conclusion of the Brussels Treaty, described as the hard core of the European system. The second stage was its reinforcement by the power and wealth of North America. The third stage was the extension of the European system. The first stage was completed by the signature of the Brussels Treaty on 17th March, 1948. second stage was completed by the signature of the Atlantic Pact, which, for the first time, committed the United States and Canada to the defence of Western Europe. The third stage has now been initiated with the signature of the Statute of the Council of Europe. It therefore seems desirable to consider carefully what is to be the ultimate aim of this policy.

The

3. For the moment the Brussels Treaty and the Atlantic Pact provide a military alliance of those free democracies of the West which are threatened by the Soviet Government. But it has been suggested that this should be a temporary phase, and that the real object should be to organise Western Europe into a Middle Power," co-equal with and independent of the United States and the Soviet Union alike. The supporters of this proposal admit that for a considerable period of time, and notably for such period as Western Europe is dependent for its very existence on American economic support, the European political organisation, whatever it may be, will have to lean heavily towards America and away from the Soviet Union. At the same time it is suggested that the underlying aim of an organisation of Europe should be the eventual creation of af system which would enable Western Europe, plus the bulk of the African continent, and

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in some form of loose-association with other members of the Commonwealth, to run an independent policy in world affairs which wild not necessarily coincide with either Soviet or American wishes.

4.

This concept of a Third World Power has had many advocates. In this country it has appealed particularly to those who find American capitalism little more attractive than Soviet Communism, and to those who feel a natural dislike of seeing this country in a dependent position. But the policy is not without its advocates in the United States itself. These have included, at one time at any rate, the Planning Section of the State Department, who thought that the best way to consolidate the 'Western world was to build up another power-unit with a strength equivalent to that of America and Russia. It has also found favour among the isolationists, who feel that if this unit came into existence it would provide America with an excuse for retiring into her shell and leaving the task of containing Russia to the Third World Power..

5. Another school of thought, more common perhaps on the Continent of Europe than in the United States or the United Kingdom, has suggested that a Third World Power of this kind, even if its physical power were less than that of either of the other two great Powers, would by remaining neutral develop an influence out of proportion to its strength, since it could hope to be courted by both sides. The ability of a weak State to exploit its neutrality in this manner is illustrated by the conduct of Bulgaria in 1914-15 and Italy in 1939-40, though the subsequent experiences of these two countries are not encouraging.

6. All these schools of thought, different as they are, have in common the assumption that it is possible to create a workable Third World Power, indepen- dent equally of Russia and America. The object of this paper is to consider whether this assumption is justified; whether, if the creation of a Third World Power is possible, it is also desirable; and, if not, what the alternatives are.

II. POSSIBLE COMPOSITION OF A THIRD WORLD POWER

7. The first question that requires consideration is what the composition of a Third World Power might be. The only serious suggestions that have been made are that it should consist of the Commonwealth, or of Western Europe (including the United Kingdom) with its overseas territories, or of these groups combined. These suggested groupings may be examined under three headings, political, economic and military.

(a) Political

Commonwealth

8. There are no political tendencies in the Commonwealth to-day which suggest that it could successfully be consolidated as a single unit. The Common- wealth is not a unit in the same sense as the United States or the Soviet Union. It has no central authority and is unlikely to create one, and its members are increasingly framing their policies on grounds of regional or local interests. The only member of the Commonwealth which might assume a position of leadership within it is the United Kingdom, and it seems unlikely that any proposals originating in London for a closer co-ordination of Commonwealth policy would be welcomed at present. It should not be assumed that centrifugal forces are certain to increase, and it remains true that concerted action may well be achieved in a crisis. The substantial identity of view among Commonwealth countries is undoubtedly an important influence for world peace. Nevertheless, there is no guarantee that a common policy will be followed.

(b) Economic

9. Since the creation of the O.E.E.C. machinery, the economic planning of the United Kingdom is tending to become more closely tied in with Western Europe than with the Commonwealth. The general trend of O.E.E.C. planning has so far been satisfactory to the sterling members of the Commonwealth. The United Kingdom, however, needs to be able to speak with greater authority in Paris as the representative of the whole sterling area. Moreover, a greater mutual exchange of economic information within the Commonwealth is needed if the central gold and dollar reserves of the sterling arpa are to be fully safeguarded There is little sign that the other members of the Commonwealth would accept

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collective planning arrangements for the Commonwealth simiPargto 80EE10.9 but we may well hope to persuade them increasingly to discuss their long-term problems individually with the United Kingdom. Even so, Commonwealth countries are likely to take the view that their needs for investment capital for industrial development cannot be met by co-operation with the United Kingdom and Western Europe alone but that dollar assistance will be needed. The Americans have shown reluctance in the past to use the United Kingdom as a channel for extending dollar aid to the rest of the Commonwealth..

(c) Military

10. The military picture is similar. As a result of the Brussels Treaty the United Kingdom has gone much further in military planning with Western Europe than it has with the Commonwealth. Moreover, the Commonwealth is not a strategic unit, and here again it must be clear to other Commonwealth members that their defence cannot be assured without United States support. For example, the Commonwealth, even with the help of Western Europe, will not in the foresee- able future be strong enough to hold the Middle East, which is vital to its security. (d) Conclusion

11. Despite the possibility of improved economic consultation, there seems little prospect of the United Kingdom being able to unite the Commonwealth as a single world power. The attraction exerted by the pound sterling and the Royal Navy is now less strong than that of the dollar and the atom bomb. An attempt to turn the Commonwealth into a Third World Power would only confront its members with a direct choice between London and Washington, and though sentiment might point one way interest would certainly lead the other.

Western Europe (including the United Kingdom) with its Overseas Territories

(a) Political

12. The progress so far made in such directions as Benelux and the Italo- French Customs Union is primarily economic in character, although there are political implications. These experiments have, however, not yet reached a suffi- tiently advanced stage to permit of optimistic conclusions regarding prospects of more far-reaching political unity. The new Council of Europe may gradually create in this old Continent a consciousness of European unity and a will to play an independent part in world affairs. But it must be recognised that centrifugal tendencies are still strong and there is a danger that the Council of Europe may seem to give Europe a greater cohesion and strength than it in fact possesses and so encourage the Americans to retire into an isolation dangerous both for them- selves and for Europe. Whatever the tendencies may be, the fact remains that the military and economic situation of the Western European nations is now such hat there can be no immediate prospect of welding them into a prosperous and secure entity without American help; and even with American help it is uncertain whether this can be achieved for some time to come.

13. The above has been written without special regard to the problem of Germany. The problem of including Germany, in whole or in part, in Western Europe and the effect which this would have on the possible constitution of a Third World Power, cannot be dealt with fully within the limits of this paper. There are many schools of thought on this topic. Some claim that Western Europe could only hope to achieve security and independence if it included the whole of Germany. Others feel that the inclusion of all Germany in any Western European group would involve a serious risk of its eventual domination by a revived Reich, and moreover that Western Europe would thereby become involved In quarrels about Germany's eastern frontiers which it would be highly desirable o avoid. Others again say that the inclusion of Western Germany in the Western European group is now a foregone conclusion, that the addition of the Soviet Zone, f that ever became practicable, would not be of such weight as to alter the whole alance, and that ways can and must be found of integrating a united Germany nto the European family of nations. In any event if Western Germany, or even unified Germany, is, after a period of years, fully integrated in the economy of Western Europe, that would probably not in itself result in Western Europe

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becoming an independent Power of the same order of magnitude as the Soviet Union or the United States, unless indeed the military gas well as the economic

welbas potential of Germany was fully developed and it is difficult to see this being accepted by the Soviet Union or even by the Western democracies themselves.

(b) Economic

14. Western Europe, including its dependent overseas territories, is now patently dependent on American aid, although in the longer run it should be able to pay its way. It is, however, always likely to be dependent for the maintenance of a reasonable standard of living on a large exchange of goods and services with the Eastern bloc, with the Commonwealth and with the United States. Although the O.E.E.C. countries and their dependent overseas territories now enjoy a pre- ponderance of economic potential over the Soviet orbit, this preponderance may well disappear within ten years if Soviet plans are fulfilled. Soviet plans may be particularly limited by commitments to the satellites and by high military expendi ture, or even by technical shortcomings in Russia itself. But it is safest to assume that, even if the economy of Western Europe is closely linked with that of the United States, their present joint margin of superiority over the Soviet economic system will tend to shrink.

15. It is true that O.E.E.C. has shown the beginning of satisfactory economic co-operation, but the impetus has been given by the United States in the conditions which they imposed as a price for dollar aid. There are already signs that as the individual countries become economically stronger and more self-sufficient the cen trifugal tendencies are likely to increase, and it may well be that when American aid ceases altogether the present limited degree of European economic co-operation will not survive. We should in any case be wise not to place undue reliance on it at the expense of our relations with the Commonwealth and the United States.

16. Moreover, from the United Kingdom point of view, economic integration with Western Europe involves great risks which would only be worth taking if we could be confident that economic integration would create a unit economically and militarily strong enough to be capable of resisting aggression. For the moment there seems little prospect of such a development and we might, if we went too far along this road, find Europe over-run and our own segment of the economy unable to function on its own.

(c) Military

17. From the military point of view, the situation is that even with American help there is nothing at present to stop the Russians occupying the entire Atlantic coast of Europe. In ten years' time Western Europe might possibly be able to hold out until full American assistance could be brought into play. Even this limited defensive rôle involves an expenditure which may well be too heavy for European national incomes. Unless therefore we are prepared to effect a drastic lowering of our present standards of living or to accept the remilitarisation of the Reich, any thought of a Third World Power in Europe being militarily capable of resisting Russia by itself can be dismissed.

18 In actual military strength Russia is now, apart from weapons of mass destruction, vastly superior to the United States and Western Europe combined and although, as has been said, our economic potential may for the time being be greater than that of the Russians, the difference will lessen with time. Moreover owing to the Soviet Union's present ability rapidly to overrun Western Europe there is a danger that American potential will be left with no area in which to deploy itself.

(d) Conclusion

19. Whereas in the case of the Commonwealth the principal difficulties i the way of consolidation as a Third World Power are political, in the case of Western Europe the difficulties lie mainly in the economic and military weaknes of its members, though the political will to union must always be doubtful.

The Commonwealth and Western Europe Combined

20. Unfortunately the objections to either group in isolation are not remove by thegempinad, and this alternative is thedragers hotf dined in detail

Political cohesPage8 the floonwealth countries with Westergofeligen less likely than with the United Kingdom, and the dangerous choice between London and Washington is not eliminated. Moreover, the economic and military weaknesses of Western Europe are not significantly diminished by the addition of the Commonwealth countries other than the United Kingdom, and the need for American support remains. Incidentally, this need for American support underlines the danger of even trying to create a group which could give the United States an excuse for believing that a buffer State had been created and that accordingly America need not exert herself strenuously on behalf of Western civilisation.

General Reflections on a Third World Power

21. The preceding paragraphs suggest that none of the possible combinations of Powers is likely in the near future to amount to a unit capable of pursuing a policy independent both of the Soviet Union and of the United States. There is, moreover, a further argument which is valid in regard to any possible combination of Powers. The belief in the ability of a Third Power to exploit its independence by a policy of neutrality and by playing off the other two Powers against each other is based on a total misconception of Marx-Leninist ideology. It is surely essential to take at their face value the frequent assertions by Soviet leaders that Marx-Leninism is the basis of their policy. This being so, they would not be prepared to establish any lasting agreement with a neutral, non-Communist Third World Power; at the most they might be prepared to make a show of reaching such an accommodation for tactical reasons. A policy of neutrality would in fact only encourage the Soviet Union to swallow its opponents one by one and, from the point of view of the United Kingdom especially, would afford no protection for our vital interests in the rest of the world, notably in the Middle and Far East.

III. CONSOLIDATION OF THE WEST

22. The conclusion seems inescapable that for the present at any rate the closest association with the United States is essential, not only for the purpose of standing up to Soviet aggression but also in the interests of Commonwealth solidarity and of European unity. The form which such an association should ake is a matter for another paper, but it is perhaps worth recording the negative conclusion that the mobilisation of general collective security on the basis of Article 51 of the United Nations Charter does not seem a promising method. The probable result of such a process would be the establishment of a new United Nations organisation without the Soviet Union or its satellites, resulting in an anwieldy bloc of countries with no organised leadership, in which the special interests of single countries or groups of countries would be liable to paralyse action by the organisation as a whole.

23. The positive arguments in favour of the consolidation of the West, in which at first, at any rate, the United States would be the largest single unit, may

e summarised as follows:--

(a) As long as Russian policy continues to be based on the Marx-Leninist

philosophy which regards all non-Communist Governments as enemies, these Governments will be forced to combine, and in this sense the consolidation of the West will come about as a natural process.. (b) The combination produced by this natural process, of which the Atlantic Pact is the first example, represents such a vast effort that once achieved it may in practice be very difficult to dissolve.

(c) The association of the United States, Western Europe and the Common- wealth, different though their cultural backgrounds and political philosophies may be, has at least in its favour a sufficient number of common traditions to make the group workable.

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24. There are of course some arguments on the other side. It must be ecognised that in a Western system the United States will be the most powerful ember, will inevitably take the lead in a number of fields, and will no doubt xpect her viewsagepreveni 1097 considerable extent. This, howeg,82as falready

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the case before the signature of the Atlantic Pact. In all fields in which the United States makes the major contribution, whether financial, military or other wise, Hofs Inevitable that proportionate (although hotways determining) weight must be given to her views.

25. At the same time experience has shown that it is usually possible to reconcile British and American views. As United States policy evolves from isolation to the assumption of increasing responsibility in world affairs, her outlook (e.g., over colonial dependencies) is evolving also, and it has so far proved less arduous for us to find a common approach towards world problems with the Americans than with most other Powers. While, therefore, extremely difficult adjustments of policy, which are inevitable in any partnership, will have to be made under a Western system, there are not so far sufficient grounds for the fear that partnership with the United States in a Western system would involve the United Kingdom in dangerous dependence on the United States. There is sufficient kinship of ideas to make this unlikely. We are in fact more likely to find it difficult to reach a common approach with Western European countries, and most of all with Germany.

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26. The fear is sometimes expressed that the United States might be tempted to indulge in adventurous policies, and that too close a partnership with them would add to the risk that the United Kingdom and its other partners might be involved against their will in the consequences of such policies. Although the possibility of their adopting ill-considered and therefore dangerous policies is always with us, the likelihood of the United States embarking on an aggressive policy is extremely remote. In spite of occasional violence of talk, American public opinion and the American Congress are both peace-loving and cautious, and more likely to err on the side of prudence than of rashness. Moreover if the United States were nonetheless to embark on adventurous policies the United Kingdom would almost inevitably be involved in the consequences in any case, and it may reasonably be expected that partnership with the United States in a West ern system would increase rather than diminish the opportunities for the United Kingdom to apply a brake to American policy if necessary

27. The possibility must also be considered that a slump might occur in the United States which would have serious repercussions on the economies of the United Kingdom and of Western European countries. This is true. But the effect would be much the same whether a Western system comes into being or not. More over, here again the existence of a Western system improves the outlook for fruitful discussion on economic policies between the members.

28. There is no necessary contradiction between the consolidation of a Western system and a much greater unification and strengthening of Europe. It is only the concept of Western Europe as a Third World Power acting independently both of the United States and of the Commonwealth, in other words as a Third World Power in the strict sense of the term, which is inconsistent with the consolidation of Western system.

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29. During the next ten to twenty years the economic dependence of Western European countries on the United States ought to disappear, and their ability to make a valid military contribution to a Western system ought to increase. Even to-day it is a mistake to regard the relationship of the Western European countries, and particularly of the United Kingdom with the United States as one of complete dependence. In fact the United States has no desire to find herself confronted with a Western Europe under Communist domination, or a Western Europe which is completely neutral. On the contrary, the United States recognises that the United Kingdom and the Commonwealth, and to a lesser extent the Western Continental Europe, are essential to her defence and safety. Already it is, apart from the economic field, a case of partial interdependence rather than of complete dependence. As time goes by the elements of dependence ought to diminish and those of inter-dependence to increase. The United Kingdom in particular, by virtue of her leading position both in Western Europe and in the Commonwealth, ought to play a larger and larger part in a Western system.

30. It must, however, be appreciated that the Western system is coming into being under the pressure of Soviet policy. It is probably fair to say that it is a system desirable in itself, since had it been in existence at the time the wars of 1914 a88 1939 might well have been avoided. Butahether this is so or not, it

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