CAB148-30-Defence and Oversea Policy Committee Meetings Relating to 1967 Disturbances-1967 — Page 32

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offer (made by President Johnson and elaborated in discussion with the Chancellor of the Exchequer by the United States Assistant Secretary of State, Mr. Eugene Rostow) to place defence orders to the amount of $35 million in this country on the condition that we made no change in our troop and supply dispositions in Germany until 1st July 1967 or the completion of the tripartite talks if that were

earlier. For the same reason, and because we had until very recently hoped that the tripartite discussions would lead to a substantial increase in German offset payments in 1967-68, contingency planning

for the withdrawal of troops and their accommodation in this country

had not been taken as far as incurring substantial expenditure which

would be wasted should no forces be withdrawn. While it remained

possible that the Germans might be brought to make an acceptable offer

on offset payments, it had to be recognised that the character of the

Federal German coalition Government, as well as their budgetary

situation, made it very difficult, if not impossible, for them to

make a satisfactory offer, and planning for withdrawals should now be

carried out as proposed by the Foreign Secretary. The complete

withdrawal of our forces from Germany which the Chancellor of the

Exchequer had suggested the studies should embrace would, however,

have the gravest implications not only for our foreign policy but for

the security of the United Kingdom; and since moreover the withdrawal

of two brigade groups was the most that we could hope to accomplish soon enough to effect our balance of payments in 1967-68, planning by

officials should concentrate on force reductions of that order.

No overt step towards withdrawal of forces could in any event be taken

until 1st July consistent with our undertaking to the United States;

How zak it was therefore necessary for officials to be told whether they should

plan on the basis of the normal six-month notice to troops before withdrawal (which gave them time to withdraw from local financial commitments) or of withdrawals beginning from 1st July (with the consequence that compensation would need to be found for financial losses incurred by withdrawn troops). Additionally we should consider

whether, consistent with our undertakings to the United States, we should now set in motion the formal NATO/WEU procedures for seeking a

reduction in our commitment to maintain forces on the continent of

Europe. Our aim should be to obtain release from any commitment to

maintain a specified number of troops in Europe; but it might be

more difficult to obtain allied approval for such an amendment of our

commitment than for one which merely specified a lower figure than the present figure of 55,000.

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