Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972

206. Telegram From the Embassy in Germany to the Department of State¹

Bonn, November 24, 1971, 2045Z.

14641. Department pass Treasury and Federal Reserve. Subject: German views on the G-10 Ministerial and the Brandt-Pompidou summit.

1. Our discussions with German officials on their preparations for the G-10 Ministerial and the following Brandt-Pompidou Summit meeting have essentially only confirmed information reported by a number of posts regarding the parameters of the European position. The Germans continue to seek a quick, world-wide solution. The Foreign Office has stressed, in this regard, that a quick solution will avoid a confrontation with the US which might otherwise develop, and will prevent a long delay in resolving issues which, if left open much longer, could turn US/European economic/commercial and political relations in the wrong direction. The Foreign Office insists that the EC is ready to play its part in attaining a world-wide solution which would include at least something on the trade side. We are told that the Germans are optimistic the French would go along. From our side, the Europeans need an indication that the US also wishes a quick world-wide solution and that the US is prepared to make a contribution itself to this end.²

2. In order to maximize the results of the subsequent Brandt-Pompidou discussions, the Foreign Office has urged that the US be as specific as possible at the G-10 Ministerial as to its wishes on trade. The Foreign Office has held out to us a hope that the Germans could make a contribution to the problem of what to do about the value of the unit of account of the CAP by limiting its revaluation in the general upward realignment of EC currencies. The Foreign Office has also reflected a positive attitude toward the limitation of price increases in the agricultural sector; towards helpful agricultural storage policies; and towards a reciprocal trade package in industry. We are told that what is needed, however, is concrete US trade proposals which would “thereby put the ball clearly in the European court.”

3. The alternative to an early world-wide solution is, according to the Germans, an interim European solution which would be less desirable from everyone’s point of view.

Rush

1. Source: National Archives, RG 59, S/S Files: Lot 73 D 153, Box 124, Morning Summaries. Confidential. Repeated to Brussels, The Hague, London, Luxembourg, Paris, Rome, USEC, and USOECD.
2. Earlier in the day the Embassy had reported on a meeting of the Bundesbank’s Central Bank Council and President Klasen’s comment that there was a real chance for a successful G-10 meeting in Rome, but no chance without a dollar devaluation (i.e., an increase in the official price of gold). (Telegram 14625 from Bonn, November 24; ibid.)