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United States Department of State / Foreign relations of the United States, 1947. The British Commonwealth; Europe

Europe,   pp. 196-654 PDF (168.7 MB)

Page 394

  3. That some important trade with eastern Europe be established.
  4. That there be effective internal financial stabilization which in the
case of France could bring out hidden resources in commodities, gold,
and foreign exchange.
  Kennan said that this was a vital question and that if the possibilities
of a balanced position by 1952 were actually remote it would call for
a reconsideration of the problem and a frank discussion of the matter
with our own people. Bonesteel inquired whether Frank's pessimism
was fused [based?] on the inadequacy of the time period or on a
fundamental disequilibrium. Sir Oliver replied that the big question
marks were terms of trade and marketability.
  The Scandinavian representative (Coel Bjoernsen of Norway) said
that it must be assumed that after 1951 Europe would be a capital
importing country in the broad sense. Bonesteel replied that this was
recognized and that what we had in mind was an end to the need for
direct assistance from the US Government.
  In commenting on the foregoing observations we pointed out that
an inflow of foreign capital from the International Bank and other
sources was a reasonable assumption if western Europe could make
itself a going concern and get out of its red-ink status. We emphasized
that a prime condition of any plan is that it should accomplish its
purpose of placing Europe in a balanced position by the end of the
contemplated period, saying that any other approach would be dis-
astrous in terms of public reaction in the US. It seems evident that Sir
Oliver's expectation that deficits will persist is based on a higher
standard of living than Europe's productivity will support. It will
also be noted that, while Franks was talking in terms of developments
outside the immediate control of the European group, most of Al-
phand's conditions relate to objectives the attainment of which pri-
marily depends on the Europeans themselves.
  In discussing Point c (production of items essential to European
recovery), we emphasized that it seemed to us that reasonable goals
would be prewar fuel output by France and Italy and British coal
production at level which would again result in annual shipment to
continent of 25-30 million tons. We also recognized joint US-UK re-
sponsibility towards the European group for high level Ruhr output.
  Alphand emphasized that while most European countries were pro-
jecting programs equal to or in excess of prewar coal production, the
figures submitted by bizonal authorities gave a target below prewar
output. Ambassador Douglas said it was his understanding that de-
strucition to the mines was greater in the case of the Ruhr. Hirschfeld 2
confirmed this and said, furthermore as a result it is now necessary to
open five new mines a year whereas under the Hitler regime it was
necessary to open only one.
2M.H.M. Hirschfeld, Netherlands representative on the Committee of Coopera-
tion at the CEDO.

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