Foreign Relations of the United States, 1961–1963, Volume XIII, Western Europe and Canada

37. Circular Telegram From the Department of State to Certain Missions in Europe⁰

Washington, May 4, 1962, 9:32 p.m.

1895. Following is preliminary summary based on uncleared memcons of discussions with Gorbach and Kreisky re Austrian relations with EEC on which posts may draw for guidance:¹

1. Austrians presented moderate and measured statement their traditional position on relations with the EEC stressing:

a. Dependence on trade with Community;

b. Urgency of need for solution in view expected rapid impact discrimination on Austrian economy;

c. Willingness to accept a degree of economic integration with Community. Described what they were seeking as an “arrangement” rather than using word “association.”

2. President and Acting Secretary explained Austrians were told we wished be helpful in finding solution Austrian problem. We did not consider “association” with Community desirable and hoped pragmatic approach would produce practical solutions which would meet four principal objectives which we believed we shared with Austrians:

a. Keep Austria tied to West;

b. Not interfere with development of process Western European political and economic integration based on European Communities;

c. Meet Austria’s economic problems; and

d. Not create grounds for Soviet protest or violation Austrian neutrality.

3. Acting Secretary reiterated our feeling that association Austria with Community under Article 238 Rome Treaty objectionable on political grounds because:

a. Could lead to Soviet charges breach neutrality in view fact “association” involved political tie to Community, and Community was organization with political and possibly defense implications. Acting Secretary stressed that we could not see Community playing kind of role we expected of it without somehow becoming involved in Western defense.

b. Association of neutrals with Community could create situation where every new step forward towards closer political union among members Communities would be delayed or frustrated by question whether this created new problems for neutral associates.

4. US pointed out that Austria’s economic position in terms dependence trade with Community similar to that of number of other countries in Europe and outside. It was primarily to deal with these problems of third countries (including US) that President had proposed trade expansion program, and we believed action under that program would deal with substantial part of trade problems Austria and other third countries. However, we recognized that Austria as involuntary neutral was in special position and we therefore particularly anxious be helpful finding solutions to its problems. This reason, we would favor possible special arrangements between Austria and Community to deal with especially difficult residual problems not covered under negotiations pursuant Trade Expansion Act.

5. Acting Secretary added that as concerns Austrian desire align its economic policies more closely with Community, this would seem possible through bilateral arrangements and in OECD. In any case, stressed our belief that more active Austrian role OECD desirable in order create closer ties with West in a forum to which Soviets could not object.

6. Replying to Acting Secretary, Austrian FonMin Kreisky stressed four points:

a. His view that Austria must remain in step with Sweden and Switzerland, as failure do so could lead to Soviet charge Austria being granted special concessions in order encourage Anschluss. For this reason, he (Kreisky) and “half of Government” feel Austria must keep in step with other two neutrals.

b. Austria as prewar political football recognized importance political unity Western Europe and did not wish do anything interfere with it.

c. Austria strongly supported OECD because of US membership. However, not certain yet whether OECD would be able to play necessary role; was essential it pass from research to action. If OECD could be made into real instrument for economic coordination, this might help solve Austria’s problems with regard coordination and integration economic policies.

d. Austria supported pragmatic and flexible approach to solutions its problems. Envisaged “exploratory discussions” between three neutrals and Community, in course of which could decide what next steps should be. Next steps he mentioned explicitly included possibility separate rather than joint negotiations with EEC.

7. Comment: Austrian position appeared considerably less rigid in these talks than in previous discussions. We are particularly encouraged by Kreisky’s emphasis on pragmatic approach and desire not interfere with political progress European union. We have impression Austrians went away with a clearer and more sympathetic picture of US position, including an understanding of our sympathy for Austria’s special role, and an inclination to make serious effort to find pragmatic solutions.

Ball

0. Source: Department of State, Central Files, 375.800/5–462. Confidential; Priority. Drafted by Cleveland, cleared with WE and U, and approved by Tyler. Sent to 12 missions in Europe.
1. Memoranda of the conversations with President Kennedy and Acting Secretary of State Ball on May 3 are ibid., Conference Files: Lot 65 D 533, CF 2086.