868.10/7–2150: Telegram
The Secretary of State to the Embassy in France
430. 1. Dept attaches greatest polit importance prompt action re Ger credit Yugo in view imperative necessity providing tangible proof to YuGovt of united Western support this critical juncture. Regard prompt Fr and Brit approval Ger credit Yugo as test high-level tripartite policy assistance Tito regime. (Emb London: This applies discussions with Brit as well.)
2. Dept therefore requests you approach Fr at high polit level, emphasizing that initial negative Fr reaction (urtel 410 July 211) appears inconsistent with Fr own recognition gravity Yugo situation in light possible Sov aggression as stated Schuman aide-mémoire (urtel 332 July 18 para No. 5).2 In view this situation, Fr approval [Page 1438] Ger credit Yugo appears small price to pay for solidifying Tito resistance to potential Sov aggression and resulting benefit Frown security. Fr might be reminded that while US and UK have extended substantial credits Yugo pursuant tripartite policy agreement, Fr have not. Fr approval Ger credit Yugo seems least that can be expected under agreed tripartite policy.
3. Fr FonOff Ger econ official’s reasoning justifying disapproval Ger credit Yugo (urtel 410) appears reflect anachronistic fear Ger econ-polit penetration S.E. Eur. Ger resumption prewar trading methods or any attempt econ domination Yugo out of question in present context.
4. Re post-1952 Yugo trade and payments situation Dept believes Yugo commitments to Ger of $4–5 million additional yearly exports not unrealistic. (Deptel 4197 June 13 to Frankfort, rptd Paris 2753.3) Re further econ aspects Ger credit Yugo, see Dept 394 July 21 to London rptd Paris 3824 and Deptel rptd Paris 2753. Subject ur discretion you might simultaneously approach Auboyneau, in charge East Eur econ affairs FonOff (urdes 15 July 55).
Rptd London as 430, Frankfort as 557, Belgrade as 67.
- Not printed. It reported that the Embassy had been informed by the French Foreign Ministry official in charge of German economic affairs that French opposition in the High Commission for Germany to the extension of a German Federal credit to Yugoslavia represented the considered view of the French Foreign Ministry. It was felt that the credit would prepare the ground for the return by Germany to her prewar trading methods (868.10/7–2150).↩
- Regarding Foreign Minister Schumann July 18 aide-mémoire, which reviewed the events in Korea and proposed intergovernmental consideration of other possible acts of aggression around the world, see telegram 332, July 18, vol. vii, p. 423.↩
- Not printed. It stated that from the point of view of (1) helping the Federal Republic find markets in the nonsatellite countries, (2) developing Yugoslav trade relations with Western Europe, (3) minimizing the requests for United States financial assistance from Yugoslavia, the Department of State was inclined to favor a Federal credit to Yugoslavia. Some of the economic aspects of such a credit were evaluated (462A.6831/6–750).↩
- Not printed. The Department of State found unconvincing several economic arguments raised by the British Foreign Office against the Federal credit to Yugoslavia. The British had argued that the swing margin in the existing Federal-Yugoslav trade agreement provided adequate credit and that Yugoslavia was a poor credit risk (868.10/7–1750).↩
- Not printed. It transmitted the text of a memorandum of a conversation between Edward G. Posniak of the Division of Investment and Economic Development of the Department of State and Christian Auboyneau of the Office of Economic, Financial, and Economic Cooperation of the French Foreign Ministry on the status of French-Yugoslav economic and financial negotiations (868.10/7–550).↩