Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 1

MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”: Telegram

No. 26
The United States Special Representative in Europe (Draper) to the Mutual Security Agency¹

confidential
priority

Paris, March 31, 1952—11 p.m.

Repto 1519. Fol is general summary and appraisal of OEEC mtg March 27–29, 1952.

1. We are encouraged with spirit of mtg and decisions taken. Though not formally on agenda major issue was future role OEEC. Discussion at informal, off record session occupying most of day Fri and attended only by mins and close advisers made clear that most govts desired OEEC be maintained and strengthened. Specific decisions on future work prog will in our judgment permit OEEC be more effective instrument for close collaboration between countries of Western Eur, US and Can than at any time in past. Much credit for successful outcome due realistic and statesmanlike participation Butler, Brit Chancellor of the Exchequer. Stikker as chairman handled mtg with usual skill and useful contributions also made by Schuman, Bluecher (Ger), Brofoos (Nor), Van Zeeland (Belg), Parkinson (Can). Latter was particularly helpful in supporting concept of more vigorous organization.

2. Council accepted US resolution² proposing OEEC conduct annual review econ position and prospects member and associated countries, fol strong supporting statements by Draper and Ger, Swedish, Swiss, Ital and Nor reps. Only significant opposition came from Brit, although Butler and Salter immediately saw great advantages in proposal. Though never officially stated for the record in order save possible embarrassment neutrals, it was fully understood such review wld provide basic data needed by NATO in its annual reconciliation of def requirements with econ possibilities. Council decision to conduct review is generally regarded as most important single action establishing broad responsibility for OEEC. Further details pouched by air.

3. On US and Belg initiative council approved decision designed to provide emergency high level attention to question internal financial stability in member countries. Council procedure involves:

(a) High level group experts to examine internal financial stability on country basis;

(b) Review of experts’ report by small, select comite mins, including min of country directly concerned;

(c) Report to ministerial council.

First two stages are particularly important, especially the second, since its purpose is to adapt expert opinion to polit possibilities. For this purpose small comite essential in order avoid generalities and deal confidentially with issues great delicacy. Technique to be followed will closely parallel that of special comite on coal production whose recommendations have been specific and practical and accepted by countries to which addressed.

4. Major developments at mtg with respect to EPU were:

(a) Unanimous agrmt EPU must be continued. Belgs made their agrmt subj satisfactory settlement their special creditor status.

(b) Clear-cut statement by Draper that US did not intend to make further contribution to EPU reserves.

(c) Managing board will prepare specific recommendations for next ministerial mtg of council, tentatively set for May 15. Separate cable will cover council action on EPU more fully.³

5. Council established a steering board for trade which shld result in strengthening OEEC authority with respect to trade liberalization. This subj will be covered more fully in separate cable.

6. Council accepted substance US amendments to working party report on expansion of production. Amendments designed to give OEEC clear responsibility to fol up effectively on report, examine production prospects of individual countries and develop popular understanding and support of expanded production.

7. Council approved in principle reduction OEEC budget by 30 percent. On basis detailed examination present setup it is generally believed the budget reduction need not cause curtailment of any important useful work. It is also recognized that there may need to be re-examination of proposed cut when staff requirements for new functions are carefully estimated.

8. In general US played more active role in mtg in line our feeling that OEEC is organ of Atlantic Community. Closer association of US and Can exemplified in fact both countries to participate fully in annual econ review and internal financial stability exercises.

9. We are warmly appreciative of Washington sympathetic understanding and prompt responses to our msgs in period preceding council mtg. This seems to us to have been an example of teamwork at its best. We are particularly appreciative of prompt action taken to arrange message from Acheson to Eden and of Washington approval of proposals on annual review and internal financial stability.

Draper

1. Repeated to London for SUSRep, Bern, Stockholm, Ottawa, and all MSA missions.
2. The text of this draft resolution was transmitted to the Mutual Security Agency in telegram Repto 1495 from Paris, Mar. 28. (MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”)
3. This is a reference to telegram Repto 1541 from Paris, Apr. 1, which gave a detailed summary of the discussion concerning the future of the EPU. (MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”)