ECA message files, FRC 53A278, Belgrade: Telegram
The Chief of the ECA Mission in Yugoslavia (Allen) to the Office of the United States Special Representative in Europe, at Paris1
Torep 91. Subj—Yugo membership EPU, Triffin transferability proposal. In response Despres memo proposing series of currency transferability agrmts with Yugos Eur trading partners (ref Despres ltr to Triffin July 302), Kopcok discussed this proposal and EPU question in three hour mtg with Despres Aug 17. Kopcok’s statements this mtg had obviously been deliberated and cleared at high level.
Main points: (1) Yugo Govt finds bilateralism costly and hampering trading system and seeks remedy. (2) Finds process of bilateral negot with Eur govts irksome and somewhat humiliating. (3) Fears Eur trading partners, if requested by Yugo Govt to enter into transferability agrmts of type proposed Despres memo, wld demand in return reduction in swing ceilings. (4) Is most eager join EPU, but does not wish plead for admission, and (5) cannot understand why purely tech difficulties eld obstruct Yugo Govt membership.
Despres replied: (1) We favor and want to facilitate Yugo Govt membership EPU, but have reluctantly concluded unwise press matter strongly for present. (2) Objections encountered have been partly substantive rather than merely tech (a) Yugo debtor and deficit status vis-à-vis EPU members; (b) differences in econ institutions which raise problems re Yugo participation in EPU trade liberalization program and in slowly developing functions managing board in coordination fiscal and wage-price policies of EPU members. (3) In our opinion (a) of primary importance; (b) only secondary and wld present no serious obstacle once some improvement had begun to be recorded in Yugo B/P. (4) If Yugo Govt interested we wld be willing undertake initial exploration of willingness EPU members to enter into transferability agrmts with Yugo Govt without reducing swing ceilings, so that Yugo Govt need enter negots only after EPU members had indicated to us their willingness grant transferability. (5) Feasibility this approach cannot be determined in advance, but Amer observer EPU thought it feasible. (6) We are not urging this approach on Yugo Govt but merely submit it for their consideration.
[Page 1842]Kopcok expressed warm thanks for frank discussion this problem, said Yugo Govt wld consider subj further in light of info furnished and wld later request further discussion with us. His reluctance to consent to our sounding out EPU members re Triffin proposal apparently due partly to preference to EPU membership and partly to fear bilateral negots re transferability wld merge with and complicate impending debt negots.3 OSR, ECA/W, and State pls comment.
- Repeated to Washington as Toeca 93 which is the source text.↩
- Not found in Department of State files.↩
- In telegram Toeca 115 from Belgrade, September 7, the Embassy reported that although the Yugoslav Government was originally hesitant and lukewarm in its attitude toward the question of joining the EPU, it finally decided that its advantages were sufficient to warrant departure from its general policy of nonparticipation in international organizations of exclusively Western membership. Although the government was disappointed when the problem of admission to the EPU seemed insolvable, it did indicate a willingness to explore the possibility of currency transferability arrangements with its European trading partners. (ECA message files, FRC 53A278, Belgrade)↩