Foreign Relations of the United States, 1961–1963, Volume XVI, Eastern Europe; Cyprus; Greece; Turkey

184. Memorandum of Conversation⁰

Washington, October 10, 1963, 4:30 p.m.

SUBJECT

• Austrian-EEC Relations

PARTICIPANTS

• Austria
  • Foreign Minister Bruno Kreisky
  • Ambassador Platzer, Austrian Embassy
  • Minister Kurt Waldheim, Director General of Political Affairs, Foreign Office
  • Minister Hans Thalberg, Director of Information, Foreign Office
• United States
  • Under Secretary George W. Ball Mr.
  • Galen L. Stone, Deputy Director, Office of Western European Affairs
  • Mr. A. Eugene Frank, WE

Turning to the subject of relations with the EEC, Minister Kreisky said that exploratory talks between Austria and the EEC had started. So far as the economic matters to be discussed were concerned, he thought it would be possible to find a common ground with the Commission. However, this might not be possible with the Council. The French, for example, would want an answer soon on Austria’s attitude toward EFTA. To this the Austrian Government will reply that it cannot take a position before seeing what sort of an arrangement is worked out with the EEC. Kreisky noted a dilemma here, with France pressing for Austrian withdrawal from EFTA, while the Dutch, he thought, would not want to see EFTA weakened at this stage by such a move. The main problem, however, was what Austria could actually do, and this will require that the Austrian Government come to an internal agreement on this. He noted that Austrian trade within EFTA had increased from 11.5% to 16.8% without any loss of trade with the EEC. This growing EFTA market had considerable appeal to Austria and it would be reluctant to take any steps which would damage this trade. Moreover, the Socialist Party and elements within the People’s Party would both be unhappy to leave EFTA so long as the other two neutrals were still members. In response to Mr. Ball’s query whether membership in both EEC and EFTA was not an unrealistic goal, the Minister agreed that it was, but he still favored such a “multilateral” solution, even if it were unrealistic. Moreover, at the present time matters in Europe were perhaps on the verge of change with Erhard coming to power in Germany and with the strong possibility that a Labor Government would soon take over in the UK. However, he agreed with Mr. Ball that things would not change very fast.

In response to the Minister’s question of what he thought about the possibility of the UK association with the EEC, Mr. Ball replied that he had spoken to French Foreign Minister Couve de Murville about this a few days ago, and Couve gave the impression that the French were not serious in this and that even a trade arrangement between the EEC and the UK would be impossible unless the UK were to give up its special relationship with the United States and the Commonwealth. Minister Kreisky added that he thought perhaps a Labor Government might be more receptive to the idea of association—that oddly enough, a Labor Government would be more Anglo Saxon than the Conservatives. Mr. Ball agreed except that it might be difficult for Labor to deal with a Gaullist Government in France. Minister Kreisky thought this would be no more difficult than for the United States to deal with Spain.

Minister Kreisky went on to note that the neutrals were of course no problem for De Gaulle. The problem was, as he had stated earlier, what the Austrian Government could do. Turning to the present attitude of the neutrals, Kreisky said that while the Swiss had initially been very strong in their support of EFTA, they were now less favorably disposed. This was because the Swiss industrialists were concerned about the Socialist complexion of EFTA. With Socialist Governments in the Scandinavian countries, with a Labor Government probable in England, and a half-Socialist Government in Austria, the Swiss were worried that EFTA might rely too much on government planning. Sweden, while in favor of association with the EEC, was unwilling to leave EFTA. The presence of the two neutrals and their continued support of EFTA led Kreisky to want to have Austria remain in EFTA. In passing, he thought the UK under a Labor Government would be positive towards EFTA, which was, in fact, a sort of European Commonwealth.

Finally, Mr. Ball asked how Austrian trade with its Eastern European neighbors was going, to which Minister Kreisky replied that at the moment it seemed stabilized. The problem, as always, was what could the Bloc sell Austria in order to enable the Bloc to buy from it? While the USSR was presently able to purchase for cash, he thought that it would not be long before it would be pressing for credit. The meeting closed with a brief discussion of the present grain crisis in the USSR and of the USSR’s intention greatly to expand its fertilizer output.

0. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Confidential. Drafted by Frank and approved in U on October 15. The meeting was held in Under Secretary Ball’s office.