Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

Secretary’s Letters, lot 56 D 459, “F–G”

No. 537
Memorandum by the Director of the Office of Western European Affairs (Byington) to the Assistant Secretary of State for European Affairs (Perkins)¹

secret

[Washington,] August 14, 1952.

• Subject: Summary of country team comments on problems of US Policy in France with respect to French & NATO military effort (Embtels 941–943²)

1. The current difficulties over the financing of French armament production are the result both of imprudence on the part of the French Government and prolonged misunderstandings about the nature and extent of US aid. To avoid further difficulties and possible dire political repercussions, it is essential that negotiations be undertaken at the earliest moment and in advance of the NATO annual review to transform the Lisbon and Letourneau understandings into a carefully defined commitment. In spite of the serious problems regarding availability of funds every effort should be made to extend $650 million FY 1953 budget support aid, conditional upon a commitment by the French to undertake certain agreed priority defense tasks, including a CY 53 defense effort of the size and general composition as recommended in the NATO annual review. We should also make a precise statement of the relationship of our budgetary support to OSP (especially regarding the additional $186 million OSP envisaged in Ambassador Dunn’s letter to M. Pinay³). (These recommendations are discussed in detail in Tomus 101, August 8.⁴)

The French would also have to agree that this would be the maximum limit of US aid in FY 1953. Any approach to the French involving a lower US commitment is likely to result in a lower French contribution with attendant political risks both in France and the US.

2. An amount of $325 million for FY 1953 in defense support appears appropriate to the MAAG. The MSA recommendation for defense support is $300 million. There is no agreement among the country team regarding the manner in which defense support funds should be applied.

3. The French end-item program for FY 1953 has been reduced by the MAAG from the initial estimate of $690 million to about $400 million. This amount will be sufficient only to meet the barest minimum of essential equipment scheduled at Lisbon for 1953, and covers NATO forces only.

The initial $690 million estimate was scheduled among the services as follows:

(a) Ground force—$390 million: This amount is based on a 15 ⅓ division commitment for NATO but exclusive of all elements of home defense.

(b) Navy—$164 million: This figure is believed by MAAG to be the minimum required to enable the French Navy to meet its NATO force goals, but not sufficient to provide for attrition or to maintain all naval equipment already in being or under construction.

(c) Airforce—$135 million: This amount will only provide items needed to support units previously equipped under MDAP and will not generate new French airforce units for NATO.

The JAMAG screening which reduces the MAAG estimate of $690 million to about $400 million, will have the following effect:

(a) The reduced figure for the ground forces is $174 million which MAAG believes will reduce standard of equipment below desirable levels for the 15 ⅓ division NATO goal of the French (Emb/MSA and MAAG disagree on the likelihood of the French proceeding with its 15 ⅓ division NATO goal, Emb/MSA taking the negative view).

(b) New amounts within the overall $400 ceiling are not available for the French Navy and airforce. However, MAAG states that further curtailment of the proposed FY 1953 program will deprive existing French NATO airforce units of their support and definitely cripple the combat effectiveness of those airforce units. Emb/MSA question the inflexibility of the naval program requirements as discussed by the MAAG.

MAAG recommends that the sharply curtailed FY 1953 end-item program not be further reduced, and that every effort be made to increase amounts made available for French rearmament. The MAAG further recommends that both military assistance and defense support funds be directed to achievement of NATO force goals. Emb/MSA add that importance of French IC efforts should not be overlooked in this process.

4. Given a $650 million total aid program MAAG recommends use of $325 million in defense support funds for off-shore procurement of necessary military equipment not furnished under end-item program either because of inadequacy of funds or non-conformance with Defense Department screening criteria (such as the MD–452/II aircraft). In view of the Lisbon understanding as well as our broader objectives in France, the above approach is regarded by Emb/MSA as impossible to justify.

5. The crucial political aspects of our current difficulties with France are predominantly short-term. At stake are the ratification of the EDC, and the approval of the air base agreement, and possibly the Indochina effort may be affected gravely.

1. Drafted by James D. Tallman of the Office of Western European Affairs.
2. Telegrams 941–943 from Paris, Aug. 12, are in file 751.5 MSP/8–1252.
3. This is a reference to Dunn’s letter of July 25, transmitted in Document 533.
4. See footnote 6, Document 535.