Foreign Relations of the United States, 1964–1968, Volume XIII, Western Europe Region

126. Memorandum of Conversation¹

Washington, January 27, 1966, 11:55 a.m.

SUBJECT

• UK Defense Review—NATO Area

PARTICIPANTS

• US
• State
  • Secretary Rusk
  • Under Secretary Ball
  • Deputy Under Secretary Johnson
  • Assistant Secretary Leddy
  • Deputy Assistant Secretary Kitchen
  • Colonel Lindjord
• Defense
  • Secretary McNamara
  • General Wheeler
  • Assistant Secretary McNaughton
• White House
  • Mr. Bator
• American Embassy, London
  • Ambassador Bruce
  • Mr. George Newman
• UK
  • Foreign Secretary Stewart
  • Defense Secretary Healey²
  • Sir Patrick Dean
  • Field Marshal Sir Richard Hull
  • Sir Henry Hardman
  • Sir Bernard Burrows
  • Sir Solly Zuckerman
  • Admiral Henderson
  • Mr. C.M. MacLehose, FO
  • Mr. P.D. Nairne, MOD
  • Mr. G.G. Arthur, FO
  • Mr. E.J.W. Barnes, FO
  • Mr. F.W. Armstrong, MOD
  • A/Cdre. Maynard, MOD
  • Mr. M.N.F. Stewart
  • Mr. D.V. Bendall
  • Mr. K.T. Nash

Mr. Rusk said he had to leave for a brief engagement but suggested that the meeting proceed to a discussion of NATO, and commented that he believed our positions were quite close together in this area.

Mr. Ball considered that the problem of forces in NATO was in many ways more political than military in nature. He believed we all feel that some reductions in Europe would be possible militarily, but that the beginning of reductions might unravel commitment by others. This was our principal concern here. Mr. McNamara suggested that we face a combined military and political problem. The FRG military force structure was unsatisfactory and their defense budget was inadequate. He did not believe the US and the UK were justified in going on with their contributions to the defense of Europe unless the FRG changed the direction of its decisions of the last 9 months. The FRG had a paper army, the real “stage army”. We were willing to tolerate myths for a time after the German forces were organized in the 1950’s, but not indefinitely. He said the German commitment is 12 divisions; they have only 240,000 men to man these divisions plus all their supporting elements, infrastructure, etc. The US would have 600,000 to 800,000 men to provide a 12-division force. There have been two defense budget cuts in the FRG in the last few months. The weakness of the German army means that there is a physical danger to the flank of the US Seventh Army.

Mr. McNamara continued that, a few months before he died, President Kennedy said he would not accept for another year this relationship between the inadequate German force contribution and ours. The situation is worse now than it was then. A solution requires two actions: first, a modification of our force structure, and second, a substantial increase in the FRG financial and force contribution. There is a serious political problem in that the FRG is very unrealistic in their reaction to modifications in allied military forces in Germany. If we withdraw a battalion, it is taken as an indication that we are modifying our political commitment. There must be changes in force structure, as technological advances justify change. This would mean lower foreign exchange costs for us. He noted that such a change would also be beneficial to the FRG because they would have less to offset if some of our forces were withdrawn. Realistically the FRG cannot continue indefinitely to provide a full offset.

Mr. McNamara said he did not want to see a military weakening of NATO, but he also did not want to see unnecessary forces and related foreign exchange costs. There is a need for a more realistic FRG appraisal of the military effects of force modifications. He believed the British could withdraw some air force units to be based in the UK and that the US could also, but we would need to get the FRG to support this politically. He noted that the Belgians and others are waiting for an excuse to cut their own military expenditures, and a chain reaction could set in with cuts in Italy, the Netherlands and further cuts in the FRG itself. Such a reaction could be triggered by FRG statements that the US and UK are reneging on their commitments.

Mr. McNamara did not believe the political leaders in the FRG had been well advised by their military leaders on our strength and their own weaknesses. He suggested that General Wheeler and Field Marshal Hull should work on their counterparts in the FRG. Chancellor Erhard did not know that he had a paper army and an absolutely inadequate defense budget. Mr. McNamara said we must do part of this task through military channels and part through political channels. He noted many signs that the FRG was moving away from their offset agreement with us. The Germans do not believe they need larger forces, and do not understand the relative strength of our forces and the weaknesses of their own. He urged that the British talk bilaterally with the FRG on this problem and indicated that the US would also do this.

Mr. Healey thought an adult education task confronted us but we could not wait for it to take effect. He suggested that political pressure must supplement the education program. He noted that 18 months ago the FRG looked like the best place for the British to make savings in their military expenditures, including foreign exchange. They found, however, that redeploying forces to the UK would involve a large budgetary increase to provide facilities for the forces. Also, the British could not disband forces they might take out of the FRG because they now serve as part of the UK strategic reserve. He noted again that while the Defense Review has been going on, British military tasks have increased. Mr. Healey said to reduce the BAOR would make it appear that the UK was opting for outside Europe rather than into Europe. It was hard for the British to pressure the FRG, but if no foreign exchange savings could be made, the British would be forced to make cuts in their forces in Germany even at the budgetary expense of building facilities in the UK.

Mr. McNamara suggested that we get the following message to the FRG: First, tell them through military channels that their political leaders need to be educated concerning the weakness of their forces, a situation we cannot continue to tolerate. Second, tell them that their defense budget must go up, which should result in more procurement, some of which should go to the US and UK as offsets. Mr. Stewart said we both have a strong interest in getting a more realistic FRG view. He made reference to the proposal to the Permanent Council of NATO for a study of comparative balance of payments costs. Mr. McNamara commented that he was not optimistic on this; NATO studies do not usually lead quickly to agreements. He noted that both the British and the US need results in a matter of months, and suggested further bilateral action. Mr. Stewart added that although it was an immediate problem it will also be a continuing problem. Mr. McNamara agreed and said he did not oppose the idea of a NATO study.

Mr. Healey said all this arises at a point in time when we expect a De Gaulle initiative or “deinitiative”. He raised a question as to whether we should not do more bilateral contingency planning now regarding actions the French might take. Mr. Ball saw no objections to “invisible discussions,” but stated the US did not want to create the appearance of an Anglo-American cabal in NATO. Mr. Leddy said information on possible French moves has varied; at one point it was thought the French might take some initiative in March, but now it seems more likely that it will be June. He suggested that the French will probably not wish to mix the NATO problem and the Common Market problem.

Mr. McNamara pointed out we need to avoid the impression that we are collaborating against the French; in addition, the problem is not really a complicated one. Because of the danger of leaks, and because the problem is not complicated, we are reluctant to undertake bilateral contingency planning. Mr. Ball saw the problem as being somewhat academic unless we also go to the Belgians and the Dutch concerning alternative sites. With the extreme sensitivity of the French and their disposition to use for their own ends any appearance of a US/UK initiative, it appeared unwise to push bilateral planning now, at least until French actions seem clearer.

Mr. Stewart said it is also possible that as a consequence of the election results De Gaulle may speed up his timetable. It would be good for other NATO nations and for France to realize that we could carry on if necessary without France. Mr. Ball commented we have had bilateral discussions with several NATO nations, and they all seem agreed to carry on in NATO without France. The problem is one of preparing to adjust to unknown French demands but discussions of specifics such as relocation of lines of communication, headquarters, etc., are almost too sensitive to get into now. Mr. McNamara suggested we leave this problem for another thirty days and consider it again when Mr. Healey returns in February. Mr. Healey agreed but commented he was worried that we were trying to handle a series of interdependent problems independently. The Special Committee, the German defense budget, etc., are all related to French attitudes. He was not confident that this was a fully integrated operation. Mr. Leddy said there are two possibilities: first, we could have quiet bilaterals now on the NATO posture, assuming the French make a move, but without provoking them; second, we could delay detailed contingency planning until we know more about French intentions.

Mr. Ball then suggested that the press people might be brought in at this point to decide what should be said to the press. Mr. Healey said it would be helpful if we could say that the US reaction was not one of shock. Mr. Stewart agreed. Mr. McNamara asked whether the British would say that they intended to keep a world role. Mr. Stewart replied this was their intent. (There was a discussion of a draft memorandum for the press that had been prepared by Mr. Leddy.)³ Mr. Healey observed that the UK was faced with the ghastly problem of trying to present the Defense Review at home as a bold new look but at the same time reconciling this with the requirement not to “pull down the pillars of the temple” overseas.

Mr. Stewart suggested that information to the press should start with a UK statement on maintaining their world role followed by a statement that they must consider how this is related to UK resources. Then there should be a statement that some adjustments will be required but that major economies can be achieved without loss of strength. Mr. Healey stressed the need to avoid giving the Australians the impression we are ganging up on them. Mr. Stewart thought the meeting today should be portrayed as the beginning of a process which would proceed further in Canberra. Mr. Healey said he would like to indicate that the US is satisfied with the broad picture presented by the British and that there would be a long period of cooperation in working out details.

1. Source: Department of State, Central Files, DEF 4 NATO. Top Secret; Exdis; Noforn. Drafted by Lindjord and Newman and approved in S on March 7 and in U on March 1. The conversation was held in Rusk’s conference room. The source text is labeled “Part 3 of 5.”
2. Foreign Secretary Stewart and Defense Secretary Healey visited Washington January 26–28 for a review of British defense commitments.
3. Not found.