CAB129-45 — Page 514

Page 514

DIS

386

4.

It will be appreciated that the arrangements now being instituted are prodali character and are aimed at achievingeventual arrange ments for the settlement of German debts which, in conformity with the New York decisions, will "assure a fair and equitable treatment of the interests affected, and remove, as far as possible, obstacles to normal economic relations of the Federal Republic with other countries".

5.

It is true that discussions with American and French representa - tives on the Inter-Governmental Study Group have brought to light several differences of view over such matters as the scaling down of both pre-war and post-war debts and the conditions under which a settlement of pre-war debts might be effected in Deutschemarks. It has, however, been agreed that these differences can best be resolved after preliminary consultations have taken place with the Germans and some of the creditor interests affected.

6.

In any event neither the communications which it is proposed to circulate, nor the very general indications which, with the Chancellor's concurrence, I have agreed should be given to the Germans in the early stages about post-war claims, prejudice any of the points in dispute. I shall hope to be in a position to give my colleagues further information and to refer to them for decision any question of policy after preliminary con- sultations have been concluded.

7.

My purpose in circulating this paper now is to let my colleagues know as soon as possible of the procedural steps which are being taken at the present stage to bring about a German debt settlement. The timing of the issue of the documents in Appendix A to other interested Governments will depend on the date of their acceptance by the United States and French Governments, which is expected to be soon. After their issue it is proposed to release a communiqué (Appendix B) and to publish the terms of the basic communication and its enclosures.

Foreign Office, S.W.1,

24TH MAY, 1951.