Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

87. Telegram From the Mission at the North Atlantic Treaty Organization and European Regional Organizations to the Department of State⁰

Paris, December 13, 1959, noon.

Polto 1138. For USEC. From Dillon. Following highlights discussion of reps of OEEC with Dillon.¹

I. OEEC represented by Ellis–Rees (Chairman of Council), Ockrent (Chairman of Exec Com) and Sergent (Sec Gen). Two subjects discussed: (1) Meeting of Council of Ministers, Jan 14, 1960 and (2) future role of OEEC. In addition to Dillon, Upton (Under Sec of Treasury) and McCarthy (USRO) were present.

II. Council of Ministers

(a) Date, Jan 14th to be announced next week. Ellis–Rees explained that had not called Council of Ministers for a year as had not wanted another display of disunity² but that now felt that time had come following recommendations of Economic Policy Committee for Europe to look at use of own surplus and not allow piling up, especially in view of US balance of payments situation. Emphasized importance capital flow to LDCs (both to OEECLDCs and outside Europe). OEEC has had considerable experience and developed techniques in case of own LDCs (Greece, Turkey and Spain). A more liberal import policy also needed. Both in trade field and in financial field pressures on government more effective if part of a joint effort. Said Ministers would not be expected to make precise decisions but to give their blessings to further work.

(b) It was brought out that on the financial side much needed to be done and that many aspects of European capital market had not been investigated. In this connection Upton stressed importance of changed structure of lending, i.e. longer-term which Europeans had not developed.

(c) Reps throughout underlined importance to the OEEC of Dillon’s presence at Jan meeting.

III. Functioning of OEEC

Ellis–Rees said following convertibility and development of EEC some doubted OEEC had future role. Hoped that Ministers could decisively show had a role as a European rallying point which neither NATO nor EEC could fulfill and as a forum for ironing out differences. He emphasized its political significance in the creation of economic strength against communism and its unique attractive power for such countries as Yugoslavia, Israel, Finland and Morocco which all sought some relationship. Ockrent said OEEC was Art 2 of NATO in operation with neutrals added. Quoted Spaak to this effect also and said that western world efforts vs communism depended on political will; that NATO could provide political impulse but not implementation.

IV. Dillon stated that he hoped to be able to attend Council of Ministers to which attached importance, explaining difficulties of his absence from US while Sec away. Said US was studying how could take more active part in European efforts to cope with trade problems and LDCs and that OEEC was certainly a possible forum.

Burgess

0. Source: Department of State, Conference Files: Lot 64 D 560, CF1547. Confidential. Drafted by Dietrich. Repeated to the OEEC capitals.
1. The meeting took place in Paris at 5 p.m. on December 12.
2. See Document 43.