740.5/11–1651: Telegram
The Ambassador in France (Bruce) to the Acting Secretary of State 1
confidential
Paris, November 16, 1951—4 p. m.
2924. Subject is European Defense Forces.
- 1.
- Proposed financial articles of draft treaty approved by
Steering Comite Nov 14 subject to blanket reservation of Belgian
and Dutch delegates to entire financial section. Following is
summary of financial articles to be inserted in treaty:
- a.
- Council is to approve common budget by November 1 each year by two-thirds majority. Benelux countries desire unanimous vote. Assembly would have until December 15 to modify budget by suppressing, reducing, increasing or creating expenditures or receipts other than contributions of member states. However, Assembly could not increase total of expenditures proposed by Council except in case where it re-establishes an expenditure proposed by commissioner but reduced or rejected by Council. Council may override any changes made by Assembly by unanimous vote.
- b.
- If budget has not been voted by beginning of calendar year, institutions of community are authorized to utilize three monthly appropriations equal to one-quarter budget of previous year.
- c.
- Budget will include all expenditures of common armament, supply, and infrastructure program and will be established in single currency unit to be selected by Council. Benelux countries have formulated specific reservations on content of common budget and fact that it will go into effect day treaty enters into force.
- d.
- Commissioner will be responsible for execution of budget and will have sufficient flexibility to shift credits between budgetary chapters as well as to open credits for new expenditures with approval of Council.
- e.
- Role of financial comptroller will be to follow execution of budget for Council and to certify proposed expenditures as conforming to purposes set forth in common budget. Community’s acounts will be subject to post audit by independent comite on accounts which will report both to Council and Assembly on execution of common budget by commissioner’s service.
- f.
- Contributions are to be paid quarterly and in advance on basis exchange rate in effect day contributions are due. Dutch have reserved this point specifically.
- g.
- Each member state is required to furnish over and above original contribution further amount up to 10 percent of contribution against receipt of currencies of other EDC members at going rate of exchange. EDC currencies thus received in exchange will be freely utilizable in territories of all other member states. Member states also agree generally to soften present restrictions on capital movements and to aid community as much as possible in obtaining currency of non-EDC members. Germans have provisionally reserved position on this article, while Dutch again have formulated specific reservation.
- 2.
- Italian delegate Lombardo stated that although financial section of treaty did not correspond to Italian ideas (Embtel 2106, Oct 102), he engaged himself personally to accept all these articles in spirit of conciliation and in order not to delay conference by joining ranks of “reservistes”. However, he reserved right to re-open this question if other delegations formulated reserves on right of first Assembly to consider during initial period definitive manner in which Assembly might be elected on basis of universal suffrage with power to legislate European taxes.
Bruce