WEST EUROPEAN INTERESTS IN THE MIDDLE EAST: IMPLICATIONS FOR US PEACE INITIATIVES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86S00588R000100050002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: September 29, 2010
• Sequence Number: 2
• Publication Date: February 1, 1985
• Content Type: REPORT

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West 'European Interests
in the Middle East..
Implications for
US Peace Initiatives
Secret
EUR 85-10010
February 1985
Copy 3 9
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Intelligence
West European Interests
in the Middle East:
Implications for
US Peace Initiatives
This paper was prepared by
are welcome and may be directed to the Chief
European Issues Division, EURA,
Secret
EUR 85-10010
February 1985
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Secret
West European Interests
in the Middle East:
Implications for
US Peace Initiatives
Key Judgments While most West European countries belonging to the European Commu-
Information available nity (EC) and NATO will probably remain broadly cooperative with US
as of 4 January 1985 policies in the Middle East, we believe they may seek a somewhat more
was used in this report.
active and independent role in the Arab-Israeli conflict. At the same time,
they will be very cautious about supporting or assisting US military
interventions in the region.
The West Europeans' primary interest in the Middle East lies in protecting
their extensive economic links-trade, military sales, and investment, as
well as energy. They thus place a high priority on regional peace and
stability and on maintaining friendships with the key economic powers in
the region-including the more disruptive countries such as Iran and
Libya. They worry less than in past years, however, about offending these
powers because the possibility of a repeat of the 1973 oil embargo has
nearly vanished. In our view they see cooperation with the United States as
a mixed blessing. On the one hand, they recognize that Washington is best
placed to promote peace and security in the region; on the other, they fear
that US support for Israel, combined with what they see as its tendency to
overreact and its penchant to use military force, could jeopardize their
interests.
The EC, including the French, has become more cooperative with the
United States on the Arab-Israeli conflict, while maintaining its advocacy
of Palestinian "self-determination" and a role for the PLO in the peace
process. It has supported the Reagan Plan while abandoning earlier efforts
to develop an independent peace initiative after encountering strong
resistance from Israel. Its behavior reflects a realization that the United
States is uniquely capable of promoting an Arab-Israeli settlement owing
to its influence with both Israel and the Arabs.
Most EC and NATO members have taken a neutral position in the conflict.
between Iran and Iraq, although France has in effect supported Iraq
through extensive arms sales and credits. They appear reluctant to join
with the United States to protect freedom of navigation in the Persian
Gulf, probably because they do not feel immediately threatened by the
possibility of a stoppage of oil tanker traffic and because their dismay over
US behavior within the Beirut multinational peacekeeping force has made
them wary of close military cooperation in the region.
Secret
EUR 85-10010
February 1985
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The general attitude of West European governments toward cooperating
with the United States on peace and security initiatives in the Middle East
is unlikely to change dramatically in the near future:
? We believe that most EC members will continue to support the Reagan
Plan and will avoid taking actions that would obviously prejudice the
chances against its revival. At the same time, the EC could assume a
more active role in the conflict-including the dispatch of an Italian-led
factfinding mission to the Middle East in early 1985-in order to goad
the United States into taking action on the Reagan Plan. The Communi-
ty, in our judgment, would undertake another independent initiative only
if the United States' unwillingness or inability to pursue a settlement on
the basis of its own formula raises a threat to West European interests in
the Middle East.
? In the Iran-Iraq conflict the West European NATO Allies-essentially
the United Kingdom and possibly France-would be inclined to take
concurrent action with the United States only in the case of a prolonged
and damaging shutdown of tanker traffic, or if a widening of the conflict
threatened the safety or stability of their Arab Gulf economic partners.
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The West European Stake in the Region
Political and Security Interests
4
West European Policy and the Middle East
6
Iran-Iraq War
10
West European Reactions to US Policies in the Middle East
11
Prospects for US-West European Cooperation
15
15
Persian Gulf Security
16
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West European Interests
in the Middle East:
Implications for
US Peace Initiatives F_
Introduction
During the past two years the European Community
(EC) has dropped earlier independent efforts to pro-
mote peace negotiations on the basis of its 1980
"Venice Declaration," and has been both publicly and
privately supportive of the 1982 Reagan peace initia-
tive. Several of the major West European countries-
France, Italy, and the United Kingdom-have worked
with the United States in efforts to promote security
and stability in the region, such as the multinational
force in Lebanon and the more recent minesweeping
of the Red Sea. In the Persian Gulf conflict, the
United Kingdom and France-albeit independently-
have indicated some willingness to take military ac-
tion with the United States to maintain freedom of
navigation in the Gulf should it be impeded by hostile
Iranian action.
We believe that the level of West European coopera-
tion with the United States in the Middle East can
influence the fate of US peace and security initiatives
in this region. First, the capacity of West European
governments to make mischief for the United States
by pursuing divergent policies is considerable, particu-
larly since many in the Middle East may believe that
West European countries can pressure the United
States into changing its policies in the region. Second,
the major West European countries dispose important
assets in or relating to the Middle East-extensive
political links with many of the countries in the
region, as well as military intervention forces and
support facilities-which could make significant con-
tributions to the success of US political or military
initiatives.)
This paper assesses the nature and limits of our West
European Allies' willingness to cooperate with the
United States in the Middle East through an exami-
nation of the factors that influence their behavior in
the region. Focusing on the EC and its four major
members, it examines Western Europe's economic
and political interests in the Middle East, its policies
concerning the two major problems in the region-the
Arab-Israeli and Persian Gulf conflicts-and its
record on supporting US military and political actions
in the region in recent years.F_-]
The West European Stake
in the Region
Western Europe's economic interests in the Middle
East are extensive, although they are no longer quite
as important as they were a few years ago. While
some countries remain substantially dependent on the
region for their energy needs, overall West European
imports of Middle Eastern oil have declined in recent
years. Western Europe maintains major export mar-
kets for both civilian and military goods in the region,
although these, too, have declined recently. F_~
In political terms, most West European countries,
including the major ones, view their principal underly-
ing interest in the Middle East as avoiding a major
conflagration that could jeopardize their own security,
according to diplomatic reporting and press and aca-
demic commentary. They also want to maintain good
relations with the richer Arab states in order to
maintain or expand their economic ties to them. Most
West European governments also want to stay on
good terms with the more disruptive forces in the
region, such as Iran, Libya, and the PLO, both for
economic reasons and in order to lessen the terrorist
threat. Because they think some US interests differ
from theirs-particularly on the issue of support for
Israel-and because they fear the United States will
overreact in a crisis, the Allies have been leery of close
association with US policies in the Middle East.
Economic Interests
Although Western Europe continues to import sub-
stantial amounts of Middle Eastern oil, its importance
to the West European economy as a whole has fallen
considerably in recent years. In the late 1970s, West-
ern Europe imported approximately two-thirds of its
consumption requirements from the producing coun-
tries stretching from Algeria to Iran. Because of such
factors as recession, improved conservation, rising
North Sea oil production, and increased imports from
producers outside the region, Middle Eastern oil
imports have declined in volume by over a third since
then and in 1983 were about 41 percent of current oil
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Table 1
West European Dependence
on Middle East and Persian Gulf
Oil Imports, 1979 and 1983
Middle Eastern Oil Imports as a
Percent of Consumption
Persian Gulf Oil Imports as a
Percent of Consumption
59
26
30
13
78
32
73
43
United Kingdom
45
12
40
8
Austria
52
26
41
13
Belgium
Luxembourg
0
0
0
0
Denmark
19
14
19
14
Finland
35
11
35
11
Greece
a
a
Netherlands
a
Norway
17
4
14
3
Portugal
75
57
75
55
Spain
82
55
68
39
Sweden
33
10
30
5
Switzerland
27
28
16
6
Turkey
71
90
52
70
Ireland
33
1
33
1
Iceland
0
0
Because these countries export a substantial share of their Middle
Eastern oil imports as finished petroleum products, available data
on imports as a percentage of consumption offer a misleading
picture of their dependencies.
consumption requirements. Imports of oil from the an intermediate position, although they differ in one
war-troubled Persian Gulf region now constitute only key respect: France receives the bulk of its Middle
about 27 percent of West European consumption Eastern oil from the Persian Gulf countries while
requirements as compared with more than 55 percent West Germany receives about half of these imports
in l979.F--] from North African producers, Libya in particular.
The drop in West European dependence on Middle
Eastern oil has not been uniform, however, as table 1 Next to oil, trade is the most important West Europe-
demonstrates. Among the major countries, the United an economic interest in the Middle East.
Kingdom, for instance, has become largely independ- the Ten's exports to the Middle East
ent of Middle Eastern oil because of its own North increased sixfold from the time of the oil price hikes of
Sea oil. At the other extreme, Italy remains depend- the early 1970s through their peak in 1982. They fell
ent on the region for over two-thirds of its consump-
tion requirements. France and West Germany share
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Table 2
West European Exports to the Middle East, 1983
Middle
East
Western Europe
Saudi Iran Iraq
Arabia
European Community 7.6 2.1
France
United Kingdom
6.3 1.4 0.4 0.9
9.2 2.4 1.0 0.7
7.5 1.8 1.8 0.9
Italy 13.6 4.1 1.2
Belgium/ Luxembourg 4.4 1.5 0.5
Netherlands 4.3 1.3 0.7
Denmark 5.5 1.6 0.8
Ireland 4.3 0.8 0.6
Norway 0.8 0.3 0.2
Spain 10.8 2.9 2.1
Portugal 2.8 0.3 0.1
Turkey a 38.4 4.0 5.0
a 1981 figures.
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Percentage of
world exports
Gulf Egypt Syria Jordan Libya Israel
States
1.2 0.8 0.2 0.2 0.7 0.5
1.3 0.8 0.2 0.2 0.7 0.5
1.2 1.2 0.2 0.2 0.4 0.4
1.0 0.7 0.2 0.1 0.5 0.5
1.1 1.9 1.2 0.3 0.3 2.9 0.6
0.3 0.4 0.4 0.1 0.2 0.2 0.8
0.2 0.6 0.6 0.1 0.1 0.4 0.3
0.6 1.0 0.7 0.1 0.1 0.3 0.3
0.2 0.3 1.3 0.1 0.1 0.7 0.2
0 0.1 0.1 0 0 0 0.1
0.5 0.8 2.2 0.3 0.2 1.4 0.4
1.4 0.1 0.6 0 0.1 0 0.2
11.9 1.5 1.5 2.8 2.1 9.4 0.2
in 1983 because of the deteriorating economic situa-
tion in the oil-producing countries. Nevertheless, at
over 7 percent of total EC member exports in 1983,
sales to the Middle East were more substantial than to
any other region of the Third World and indeed were
greater than those to Latin America and the Commu-
nist Bloc combined (see table 2):
? In 1983 Italy was the most dependent of the major
West European countries on Middle Eastern trade,
with over 13 percent of its exports going to the
region. It was followed by the United Kingdom at
about 9 percent, West Germany at over 7 percent,
and France at 6 percent.
? The largest share of West European Middle Eastern
exports in 1983 went to Saudi Arabia and the
bordering smaller Gulf states. Sales to what are
generally considered the more radical oil-producing
states Libya and Iraq-have fallen sharply during
the past three years mainly because of a drop in
these two countries' ability to pay.
1.8 3.7 1.7 1.5 5.2 0.5
? Although dropping in the aftermath of the 1978
Islamic revolution, EC exports to Iran have recov-
ered. Iran has emerged as an especially important
trading partner for West Germany and Italy, com-
prising, respectively, the first- and third-largest
Middle Eastern markets for these countries in 1983.
Military exports to the Middle East are of particular
importance to many West European governments.
West European
defense industries need to achieve a substantial level
of exports in order to remain profitable.
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? During 1979 through 1983, France was the largest
supplier of military goods to the region, selling twice
as much as the next largest supplier, Italy.
? Iraq made the largest purchases of West European
arms during this period, mainly from France. It was
followed in order by Saudi Arabia, the combined
smaller Gulf states, Egypt, Jordan, and Libya.
? Arms sales to Iran have been fairly limited,
accounting for about 3 percent of the total from
1979 through 1983.F--]
Political and Security Interests
West European countries perceive their major politi-
cal/strategic interest in the Middle East to lie in the
maintenance of peace and stability, in our view,
because they fear that conflagrations in the region
would threaten the survival of the more pro-Western
regimes, which they consider essential to their eco-
nomic interests. Embassy reporting makes it clear
that they also fear such hostilities could escalate to
the point of involving the superpowers--and thus
threaten their own security through a possible "spill-
over" into the European theater. F_~
Ever since the 1973 Arab oil embargo the West
European governments have also worried about facing
oil, trade, or financial sanctions if they did not satisfy
Arab sensibilities on important issues, especially those
concerning Israel. We suspect that their anxieties
about Arab retaliation have eased substantially in
recent years because declining oil revenues, the grow-
ing Iranian threat, and deepening divisions in the
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Arab world have reduced the Arabs' economic power
and political self-confidence and thus their likely
willingness to challenge Western Europe. Diplomatic
and press reporting make it clear, however, that the
concern has not disappeared-particularly in those
states that still are heavily dependent on Middle
Eastern oil. Moreover, the same reporting indicates
that major countries cultivate the Arabs and Iran
because even minor cutbacks in purchases could add
to unemployment and jeopardize their defense indus-
tries. West European officials have told US represent-
atives that they worry about the more moderate
Arabs turning toward the Soviet Bloc for political
support-and military supplies-should they lose con-
fidence in Western Europe. F__1
We believe most West European governments will
remain reluctant to confront the more disruptive
forces in the region, such as Libya, Iran, Syria, and
the PLO. Both Libya and Iran represent important
potential markets. Moreover, Libya, Iran, Syria, and
the PLO have all been involved in terrorist activities
in Western Europe, which, as figure 1 indicates,
continue to be a significant problem. In our judgment,
West European governments believe that by main-
taining lines of communication with disruptive forces
they reduce the likelihood of being targeted for
terrorist actions. Finally, according to US diplomatic
reporting, they also believe that efforts to isolate the
disruptive forces in the Middle East will only impel
them toward greater irresponsibility and toward a
closer relationship with the Soviets.
The West Europeans, in our judgment, perceive they
have only a limited stake in Israel. On the one hand,
most mainstream West European leaders have ex-
pressed at least modest sympathies for the Jewish
state, and nearly all indicate they realize that blatant-
ly anti-Israel policies could complicate their own
relations with the United States. On the other hand,
economic concerns prompt them to maintain consider-
able distance from Israel in order to protect ties with
Israel's far richer adversaries. Moreover, USIA poll-
ing data and press accounts indicate that public
support for Israel is no longer sufficiently strong to act
as a check against their emphasis on economic self-
interest. Because of growing sympathy for the Pales-
tinians and negative reactions to Tel Aviv's use of
force to achieve political objectives, Israel's once
Terrorist Incidents in Western
Europe by Middle Eastern Groups,
1973-84
Number of incidents
35
0 1973 75 80 84
June
positive image in Western Europe has deteriorated
sharply, in the view of most commentators on this
subject. According to 1984 USIA surveys, British,
Italian, and West German publics were somewhat
more favorable to Israel than to the Arabs," but the
great majority in all three countries were
noncommittal.
We believe that the major West European countries
perceive there are advantages both in working with
the United States in the Middle East and in standing
aloof from it. Leaders of all major West European
countries recognize, in our judgment, that the United
States is best placed to promote peace and security in
the Middle East because of its unique ties with both
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Israel and the Arab states and because of its abilities
to project power into the region. They also realize that
disputes with the United States over the Middle East
could threaten the effectiveness of the Atlantic Alli-
ance. At the same time, they fear that identification
with the United States could jeopardize their ties with
the Arabs because of US support for Israel. More-
over, diplomatic reports and academic studies suggest
they believe that the United States is fundamentally
naive in its approach to the problems of the Middle
East-too insensitive to Arab claims, too inclined to
view regional conflicts in East-West rather than in
local terms, and too ready to use military force.
These, in our view, are the main reasons why the
major West European countries are inclined to con-
sider cooperation with the United States only on a
case-by-case basis.
Three of the major countries have more specific
national interests in the Middle East. Both France
and the United Kingdom have been involved in the
region since the colonial era and consequently believe
they have a special knowledge of the region and a role
to play in its affairs. France, moreover, views direct
independent involvement in the Middle East as part of
its more general effort to conduct a foreign policy
separate from the United States. Italy has increasing-
ly viewed itself in recent years as a "Mediterranean
power" with an interest in political developments in
the Levant and North Africa-and a right to be
consulted about Western actions in these regions.
West Germany lacks major historical or geographic
links with the Middle East and thus its political
interests in the region are less pronounced than those
of the other major powers
West European Policy
and the Middle East
All West European governments place heavy empha-
sis on the need for a resolution of the Arab-Israeli
conflict and take what most observers consider a
generally "pro-Arab" position on the issues separating
the two sides. They are united in favoring Israeli
withdrawal from the occupied territories in exchange
for Arab recognition of the Jewish state. They also
support the elastic concept of Palestinian "self-
determination" and a role for the PLO in peace
negotiations, although attitudes toward this organiza-
tion vary by country and are generally less favorable
than they were a -few years ago due to the PLO's
political decline.
Most West European governments have taken a neu-
tral position on the Iran-Iraq war and have been at a
loss for ideas on how to end it. They worry, however,
about the possible implications of an Iranian victory
for their interests in the region. The major West
European countries have not been overly concerned
about the possibility of a Persian Gulf shutdown
because they believe they could make up any resulting
cutback in oil deliveries by resorting to alternative
sources of supply.
The Arab-Israeli Conflict
Since the 1973 Middle East war and oil embargo,
West European governments have agreed that the
resolution of the Arab-Israeli conflict is central to the
protection of their interests in the region. They have
feared that a continuation of the conflict would lead
to increased terrorism in Western Europe, complica-
tions in their commercial relations with the Arab oil
producers, and further conflagrations in the region
that might threaten their own security. Because their
economic interests in the Middle East are heavily
weighted toward the Arab side, all West European
governments have tended to emphasize the need for
Israeli concessions on territory and on the Palestinian
question.F_~
The European Community's policy on the Arab-
Israeli conflict, outlined in its June 1980 Venice
Declaration and in subsequent statements, calls for
Israel's withdrawal from the occupied territories in-
cluding East Jerusalem, with, at most, minor territori-
al modifications to create defensible borders. EC
members-including countries such as West Germa-
ny, the Netherlands, and Denmark, which are gener-
ally friendlier to Israel-are particularly critical of
Israel's settlements program in the occupied territo-
ries and have repeatedly called for an immediate halt
to the establishment of new settlements. At the same
time, they have emphasized the need for Arab recog-
nition of the Jewish state.)
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EC member governments agree that the Palestinian
question is at the heart of Arab-Israeli conflict and
believe that it can be resolved only by satisfying the
"legitimate rights" of the Palestinians to a "home-
land." In the Venice Declaration, the European Com-
munity came out in favor of the concept of Palestinian
"self-determination," later expanded to include the
phrase "with all that this implies." Although the
Community's position suggests that it supports the
concept of an independent Palestinian state, only
French President Mitterrand, among the leaders of
major countries, has publicly endorsed that concept-
albeit only in general terms.
Since the late 1970s, EC-member governments have
viewed the mainstream faction in the Palestine Liber-
ation Organization and especially its leader Yasir
Arafat as "moderates" capable of reaching an accom-
modation with Israel. With the exception of Greece,
however, they have refrained from granting the orga-
nization diplomatic recognition as the sole spokesman
for the Palestinians, claiming that this status could
only be determined in free elections. They have
referred to it as "a representative" of the Palestinians
and most have maintained official communications
with it. In the Venice Declaration the EC called for
the "association" of the PLO in peace negotiations, a
formulation designed to express the Community's
support for PLO involvement in the peace process
without departing too sharply from US policy of
exclusion of the PLO unless it accepts UN Resolution
242 2 and Israel's right to exist.F__1
The Community's united stand on PLO involvement
in the peace process belies subtle but important
distinctions in attitudes toward the organization
among the major members:
? The United Kingdom and West Germany currently
have only modest sympathies for the PLO. Both
countries, for instance, have limited contacts with
2 Resolution 242 calls for Israel's withdrawal from occupied
territories to secure and defensible borders, mutual recognition
25X1 between Israel and the Arab states, and measures to improve the
quality of life of Palestinian refugees.n
the organization to meetings at the subcabinet level
and have conditioned fuller ties on the PLO's formal
renunciation of terrorism and recognition of Israel's
right to exist. In our view, London's current attitude
toward the PLO-considerably cooler than a few
years ago when senior officials publicly played down
the degree of PLO involvement in terrorism-
largely reflects its perception that the PLO's loss of
its power base in Lebanon has dramatically reduced
its clout in the Arab world, thus opening the way for
the UK's longtime friend, King Hussein, to reassert
claims to the occupied territories. Bonn's attitude
reflects its disinclination to offend Tel Aviv as well
as its distaste for the PLO's radicalism.
? France and Italy are both fairly favorable to the
PLO. Both maintain regular contacts with PLO
leaders at the foreign minister level. Italian Prime
Minister Craxi also recently met with Arafat; Mit-
terrand, on the other hand, has conditioned his
willingness to meet with the PLO chieftain on the
PLO's acceptance of UN Resolution 242.F__1
We believe even Paris and Rome had some second
thoughts about the PLO during 1983 and 1984
because of its continued internecine fighting. Indeed,
an early 1984 EC statement on the Arab-Israeli
conflict included somewhat more flexible language on
Palestinian representation that, according to the US
Mission to the EC, was specifically inserted to avoid
tying the Community too closely to the PLO should
Arafat not prevail. We suspect that EC members are
at least moderately encouraged by the recent Pales-
tine National Council meeting, which gave Arafat a
vote of confidence without, however, reconciling the
split within the organization. The most recent EC
Middle East statement took note of the meeting and
then reaffirmed support for PLO involvement in the
peace process. F_~
Although they believe that face-to-face negotiations
offer the best hope for progress toward a settlement,
EC members have expressed a belief in recent state-
ments on the Arab-Israeli conflict that the United
Nations eventually should be brought into the peace
process. This preference reflects their general support
for UN involvement in a conflict resolution and, more
important, their belief that a UN setting would
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facilitate Soviet involvement in the peace process-
involvement that, according to diplomatic reports,
they believe to be ultimately essential to its success.
At the same time, most EC members are skeptical of
Soviet motives in the Middle East and prefer only a
"limited" Soviet role in any peace talks. For this
reason, the EC favors Arab-Israeli negotiations within
the context of the UN Security Council rather than in
a UN-sponsored Geneva-style conference where the
Soviets would have greater latitude for mischief-
making. F_~
On the related issue of Lebanon, the EC has been
insistent on the need for the withdrawal of all foreign
military forces-including Syria's-from the country
except for those requested by the Lebanese Govern-
ment. EC members have been especially critical of
Israel's actions in Lebanon-they supported the Sep-
tember 1984 UN Security Council Resolution con-
demning the Israeli occupation of South Lebanon
vetoed by the United States but also recognize
Israel's right to security guarantees, according to
diplomatic reporting. The EC has publicly indicated
that its members might be willing to increase their
contribution to the UNIFIL forces or UN observer
teams in southern Lebanon if doing so would facilitate
foreign troop withdrawals from the country. France,
for reasons of linked history, claims to take a special
interest in Lebanon's problems, but its decision to
withdraw from the Beirut multinational force only
about a month after the United States, Italy, and the
United Kingdom suggests that it places tight limits on
the political and economic costs of its involvement.
Iran-Iraq War
The European Community has taken a position of
neutrality in the conflict between Iran and Iraq,
limiting its involvement to general calls on both sides
to seek a negotiated solution.
The EC's low-key neutrality toward this conflict, in
our judgment, reflects:
? Lack of ideas on how to act effectively: West
European officials have told US diplomats they
believe there is little that the West can do to end the
conflict until both sides tire of the fighting. They
have discussed within the EC the possibility of
promoting a new cease-fire resolution at the United
Nations but have concluded that Iran probably
would ignore it.
? Economic self-protection: Although Western Eu-
rope's economic interests in the Gulf region lie
mostly in Iraq and in Iraq's Arab allies, several
West European countries including West Germany
and Italy have reestablished substantial trading ties
with Iran, and others probably look forward to
obtaining a substantial share of this potentially
large market. The West Europeans are therefore
anxious to avoid statements or actions that might
antagonize either the Arabs or Iran.F___1
the region.
Turkey has been particularly concerned to remain
neutral in the Iran-Iraq conflict because it borders
both countries, and because both are major trading
partners and oil suppliers. Turkey has indirectly aided
Baghdad, however, by protecting the Iraqi-Turkish oil
pipeline against sabotage and by dispatching troops to
northern Iraq to help quell a Kurdish uprising-which
Ankara feared might spill over into Kurdish regions
within Turkey. The Ozal government has recently
attempted to soothe Iran's irritation over this action
by concluding an agreement with Tehran under which
neither would provide safehavens for the other's dissi-
dents. According to US Embassy reporting, Ankara,
in fact, is more concerned about the prospects of an
Iraqi than an Iranian victory because it fears that
Tehran would then move closer to the Soviet Union,
thereby endangering Turkish and Western security in
Other West European governments are considerably
more concerned, in our judgment, about the possibili-
ty of an Iranian than an Iraqi victory. France would
suffer directly should Tehran prevail, because its
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loans to Baghdad would be put in jeopardy
French and other West European officials have ex-
pressed concern, moreover, that an Iranian victory
would jeopardize their extensive economic interests in
the rest of the Arab Gulf. They fear it might open the
way for further Iranian military expansion or encour-
age Islamic radicals to challenge the generally pro-
Western regimes of that region. F_~
Although the major West European countries are, in
our judgment, concerned that the Iran-Iraq fighting
might stop oil tanker traffic in the Persian Gulf, they
believe that they would not be gravely harmed by
such a development, at least over the short run.
According to US Embassy reporting, they believe
they could largely make up any shortfall by conserva-
tion and by tapping alternative sources of supply,
including:
? The emergency oil stockpiles that they have built up
since the 1973 embargo.
? The estimated 4 million barrels per day in surplus
oil production capacity that does not require trans-
port through the Persian Gulf. Current West Euro-
pean imports from the Gulf amount to just over
3 million barrels per day.
Several smaller West European states-Portugal,
Greece, and Turkey-depend on the Persian Gulf for
more than half their oil consumption requirements
and may therefore be more concerned about the
effects of a Gulf shutdown j
West European Reactions to US Policies
in the Middle East
The West Europeans in the last two years have
participated along with the United States in several
ad hoc efforts to promote security and stability in the
region, including the multinational force in Beirut and
the effort to implement the Reagan Plan. We believe
the greater willingness of West European govern-
ments to cooperate with the United States reflects the
decrease in Western Europe's vulnerability to Arab
pressure, its recognition of the unique ability of the
United States to project power and influence in the
Middle East, and its generally favorable attitude
toward the substance of the Reagan Plan-which
many West European governments would like to see
revived. Indeed, Embassy and press reporting indi-
cates some are looking for ways to encourage renewed
US action.)
At the same time, the West European allies have only
reluctantly considered US requests for contingency
plans involving joint military action outside the
NATO area-including the Middle East. We think
their reluctance stems from a desire to husband their
resources and avoid any move that might be consid-
ered controversial by the oil-producing countries, as
well as concern over US intentions in the region and a
desire on the part of some countries to keep the
Western Alliance focused on their own security needs.
Moreover, we believe disenchantment with some US
actions in Lebanon has made them more wary of
cooperating closely with the United States on security
initiatives in the Persian Gulf. Nevertheless, the
United Kingdom and-somewhat more tentatively-
France have indicated that they might be willing to
take concurrent military action with the United
States to maintain freedom of action in the Gulf as a
last resort, after all diplomatic options had been
exhausted.F__1
Attitudes Toward Peace Initiatives
In the autumn of 1982 the EC and the leaders of all
its principal states publicly endorsed the Reagan Plan
for resolving the Arab-Israeli conflict. They took this
action in spite of the fact that the plan's call for a
Jordanian-Palestinian confederation fell short of their
own formal proposals for Palestinian self-
determination. Although the EC simultaneously en-
dorsed the Arab League's Fez Plan-which calls for
the creation of a Palestinian state-their subsequent
diplomatic efforts were directed at encouraging Jor-
dan to begin negotiations on the basis of the Reagan
Plan and persuading other Arab countries to support
Amman.
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Western Europe's support for the Reagan Plan con-
trasted with its attitude toward the US-sponsored
Camp David peace process. West European govern-
ments had reacted tepidly to the Camp David accords,
praising them only as a first step toward a general
solution of the conflict. More importantly, maintain-
ing that the Camp David process had ground to a halt
in 1980 because of the US Presidential election, the
West Europeans tried to launch their own Arab-
Israeli peace initiative. The EC dispatched several
diplomatic missions to the Middle East for the pur-
pose of arousing interest in the Venice Declaration.
Because West European proposals on the Palestinian
question were more in line with Arab preferences than
those of Camp David, this initiative threatened to
undermine US efforts to gain support among the
Arabs for Egyptian-Israeli negotiations.F__-]
We believe three broad factors account for the more
positive reaction to the Reagan Plan:
? The decline in concern about the threat of Arab
economic sanctions meant that EC members felt
they had greater freedom to work alongside the
United States in the Middle East. The EC's attitude
toward the Reagan Plan was also influenced by the
fact that the Arab countries did not bitterly reject it
as they had the Camp David accords.
? According to Embassy reports, many West Europe-
an governments were extremely anxious for progress
toward a settlement in the immediate aftermath of
the Lebanon war because they feared that Palestin-
ian frustrations would boil over without it, leading
to upheavals in the Arab world and increased
terrorist activities in Western Europe. Because ear-
lier West European efforts to develop a peace
process based on the Venice Declaration had been
brushed off by Israel and largely ignored by the
Arabs, we think they concluded that only the Unit-
ed States could bring both the Israelis and the
Arabs to a settlement.
? We believe many West European leaders concluded
that the Reagan Plan's call for a Jordanian-Pales-
tinian confederation, unlike Camp David's autono-
my proposals, represented an approach to the Pales-
tinian issue that might prove acceptable to all sides
in the conflict.)
We believe that King Hussein's April 1983 decision
against seeking negotiations with Israel about a
Jordanian-Palestinian confederation diminished the
hope of West European leaders that the United States
could engineer a peace settlement,
West European members of the Security Council also
acted last spring to scotch a potential competitor to
the Reagan Plan by joining with the United States to
oppose the convening of a special conference on the
Middle East favored by the Arabs and the Soviets.
In recent months, however, diplomatic and press
reports indicate the EC members have debated the
possibility of renewed Community involvement in the
Arab-Israeli problem. This development does not, in
our judgment, indicate that EC members are seeking
to play an independent mediation role or to present an
alternative to US policies. Indeed, senior EC officials
have repeatedly assured the United States that they
did not want to supplant Washington's preeminent
role in the peace process. We believe rather that EC
members worry that the current stalemate in peace
negotiations could prompt the more moderate Arab
countries to turn to the Soviets for support and
stimulate increased terrorism by the Palestinians. In
our view, they believe that through renewed limited
activism they may be able to goad the United States
into taking new steps to implement the Reagan Plan
and at the same time reassure the Arabs of their
continuing concern about the Palestinian problem-
thereby protecting their economic interests in the
Arab world.
EC members last fall had trouble agreeing about the
nature of an initiative. According to US diplomatic
reporting, the United Kingdom-in keeping with its
coolness toward the PLO and the concept of a Pales-
tinian state-proposed that the Community issue a
major statement that would tone down the Venice
Declaration's support for Palestinian self-
determination and for PLO involvement in peace
negotiations. All other members opposed any major
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new statement at least until the implications of recent
important developments, including the Israeli elec-
tions and the Jordanian-Egyptian rapprochement,
could be assessed more fully. The United Kingdom,
on the other hand, opposed proposals by both Italy
and West Germany that the Community send a
mission to the Middle East in early 1985 to assess
current positions and make limited efforts to reconcile
Arab-Israeli differences. London maintained that in
the absence of a new and more realistic definition of
EC policy, such a mission would have little to contrib-
ute to the peace process.F_~
In early December the EC Summit in Dublin compro-
mised on a modest initiative. The Summit issued a
brief statement calling for renewed progress toward a
settlement and reiterating the Venice principles, in-
cluding the association of the PLO in the peace
process. It indicated the EC's willingness to assist
peace efforts-but effectively eschewed a mediation
role for the Community by saying that "no amount of
effort by third parties can be a substitute for direct
negotiations among the parties themselves." The
statement finally called for an intensification of EC
contacts with the Arabs and Israelis, although-
apparently at the sole insistence of the United King-
dom, according to US Embassy Dublin-it did not
specifically authorize an EC mission to the Middle
East.
Attitudes Toward Security Issues
Since the Soviet invasion of Afghanistan in 1979, the
United States has put forward proposals that NATO
develop plans for "out-of-area" contingencies, espe-
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West European NATO Allies have been cool to the
idea of formal arrangements for military cooperation
with the United States in the Middle East:
? In our view, they fear being dragged into military
actions that might jeopardize their economic inter-
ests in the Middle East-for example, actions taken
in support of Israel or against Iran-or into a
confrontation with the Soviet Union that might spill
over into Western Europe.
? They are reluctant to increase their defense budgets
in order to meet the costs of out-of-area
contingencies.
? Some countries, such as Portugal, Spain, and Tur-
key, want to exploit their proximity to the Middle
East by exchanging transit rights for US economic
or political support on a case-by-case basis.
? The French have reiterated their opposition in prin-
ciple to out-of-area planning, both because Paris
does not participate in the NATO military com-
mand structure and because it rejects NATO's
involvement in conflicts outside the European the-
ater. The West Germans have been wary of
NATO's taking on out-of-area responsibilities be-
cause they fear these could detract from its efforts
on the central frontl
Despite their reluctance to engage in formal out-of-
area contingency planning with the United States, we
believe the West European allies broadly share the
US view about the need for Allied action to maintain
security in the Middle East. Their willingness to
cooperate with the United States would depend, how-
ever, on their perception of the wisdom of US actions
and the possible effects on West European interests in
the region, as well as on the quantity of resources they
were being asked to commit.
Mainly, in our view, because they see a need to
placate the disruptive forces in the Middle East, the
West European allies have generally not been willing
to support or to participate in punitive measures taken
in response to terrorist or hostile actions by these
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The Allies have, however, been more inclined to join
with the United States in "peacekeeping" actions in
the region because of their interest in stability in the
Middle East. For instance, the United Kingdom,
France, Italy, the Netherlands, and Norway have
participated along with the United States since 1981
in the multinational force in the Sinai that monitors
observance of the Egyptian-Israeli peace treaty. And
from mid-1982 through early 1984 France, the Unit-
ed Kingdom, and Italy contributed troops along with
the United States to the multinational force in Beirut.
In our judgment, the West European allies' reading of
US actions in Beirut has made them more wary of
cooperating closely with the United States in security
operations in the Middle East. The three MNF
partners objected to US efforts to use military force to
support the Gemayel government because they
believed that to do so would depart from the mission's
peacekeeping role and expose it to attack by antigov-
ernment forces. They also thought the United States
failed to consult with them prior to its decision to
withdraw from the MNF.I
The Beirut experience, in our view, clearly influenced
West European policy regarding measures to deal
with mines in the Red Sea and Gulf of Suez.
Although the United Kingdom, Italy, and France
agreed to dispatch minesweepers to the area along
with the United States, they all made a point of
insisting that their actions were taken independently
in response to Egyptian rather than US requests. In
order to emphasize its independence from the United
States, France refused even to participate formally in
staff level consultations with the United States and
the other countries on minesweeping operations.
In the Persian Gulf region, the Allies grew alarmed
about the security situation in the 1979-80 period
because of the simultaneous outbreak of the Iran-Iraq
war and the Soviet invasion of Afghanistan.
In 1980, in fact, the United
Kingdom, France, an t e Netherlands informally
coordinated with the United States on a joint buildup
of naval forces near the Persian Gulf, a move designed
to provide symbolic reassurance for nervous Arab
rulers. According to diplomatic reports, the United
Kingdom and France also during this period privately
encouraged the Arab Gulf states to form the Gulf
C7.operation Council so that they might have a mech-
anism through which to call for Western assistance.
The West European allies' very cautious reactions to
the emergence of an Iranian threat to Gulf shipping
beginning in mid-1984 suggest, however, that they
would be extremely reluctant to get involved in
military operations in the Gulf.
While French military staff officers have
held discussions with their US counterparts on possi-
ble minesweeping actions in the Gulf, French diplo-
matic officials have been generally negative about the
idea of military action in the Gulf-not excluding it,
however, in an extreme emergency such as a pro-
longed and total shutdown of Gulf tanker traffic.
Senior Italian officials expressed doubt to US diplo-
mats in June 1984 that Rome would agree to direct
involvement in Western military action in the Gulf. In
general, the West Europeans have urged restraint on
the United States.
We believe current West European attitudes toward
Western security cooperation in the Persian Gulf are
molded by:
? A belief that the danger of a major conflagration in
the Persian Gulf region has receded. According to
press accounts, West
European leaders perceive both the Soviet drive into
Afghanistan and the Iranian war effort as being
hopelessly bogged down. They are less fearful than
before of a direct thrust by either Moscow or
Tehran aimed at their key Arab Gulf trading
partners and oil suppliers.
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? A belief that, even if the more limited threat of a
restriction or cutoff in Persian Gulf tankers were to
materialize, a Western military response would not
be required immediately. We think that, because of
the decline in Western Europe's dependence on
Persian Gulf oil, the West European allies believe
that their countries would not be affected by a
reduction in Gulf oil supplies for at least several
months. In our view, they would prefer to keep
Western responses focused on diplomatic action
until the need for military moves becomes clear.
? A probable belief that, in the absence of a major
crisis, West European involvement in Persian Gulf
military actions might prove unpopular domestical-
ly. According to USIA surveys conducted earlier
this year in the United Kingdom, West Germany,
and Italy, no more than 10 percent of the respon-
dents favored their country's involvement in mili-
tary action in the event of a Gulf shutdown, while a
majority supported only diplomatic action even
though they believed a shutdown would have very
harmful consequences for their countries'
economies.
? Wariness of cooperating too closely with the United
States, based partly from their experience with the
multinational force operation in Lebanon. F--]
Prospects for US-West European Cooperation
Given their view that the United States is in the best
position to pursue a Middle East peace initiative, we
believe the West Europeans will probably continue to
support US efforts based on the Reagan Plan. At the
same time, however, they may well be inclined to
resume a somewhat more active and independent
role-including the dispatch of a factfinding mission
to the Middle East-and might consider breaking
more sharply with US Middle Eastern policies if they
were to conclude that the United States is unwilling
or unable to press the peace process. The West
European allies, in our judgment, probably would be
inclined to participate in or support US military
action in the Persian Gulf only after a prolonged oil
stoppage or the development of a broader threat to the
security of the Arab countries.F___1
The Arab-Israeli Conflict
In our judgment, the West Europeans continue to
think that the Reagan Plan represents the most
practical basis for achieving progress toward an Arab-
Israeli settlement. Moreover, because the Arabs re-
main worried about the Iranian threat, oil is in ample
supply, and the Palestinian movement is divided and
weak, we believe the major West European countries
are unlikely to face a threat from the Arab world
sufficiently menacing to prompt them to break with
US-Middle Eastern policies purely to appease Arab
sentiments. For these reasons we believe that any
renewed EC involvement in the Arab-Israeli peace
process would not be designed to compete with US
peace efforts-although it could still complicate these
efforts because of the EC's contrasting attitude to-
ward the PLO.
We believe that the Italian Government-which holds
the EC presidency for the first half of 1985-will
interpret the Dublin Summit's call for an intensifica-
tion of contacts with Middle Eastern parties as autho-
rizing an Italian factfinding mission on behalf of the
Community. Such a move would be in keeping with
Italy's previously noted desire to become a more
important political factor within the Mediterranean
region. It would also enjoy the support of most EC
members, perhaps with the significant exception of
the British. Italian Prime Minister Craxi has already
publicly indicated that he intends to address the
Arab-Israeli problem during Italy's tenure as EC
president. F_~
Craxi and Foreign Minister Andreotti, in fact, have
even already held a series of informal consultations
with Middle East leaders, including a hastily ar-
ranged meeting with PLO chief Arafat in Tunis in
December 1984. The US Embassy in Rome reports
that during this meeting Arafat told them that he now
accepted the need for negotiations with Israel in
conjunction with Jordan and that he was moving
toward acceptance of the Reagan Plan. He also told
them he needed a signal of support from the United
States in order to persuade the PLO to adopt this
path. In reply, Craxi encouraged Arafat to work with
Jordan and to recognize Israel.
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We believe that the Italian leaders will take a similar
line in meetings with Arab governments and in a
possible second meeting with Arafat
Craxi and Andreotti also plan to hold meetings
with Israeli leaders in early 1985 during which they
will probably encourage Tel Aviv to be more flexible,
especially about PLO involvement in the peace pro-
cess. They may also seek to encourage the United
States to send the signal of support requested by
Arafat. In fact, we suspect that the Italians, along
with other West Europeans, may be sufficiently en-
couraged by Arafat's private professions of peaceful
intent that they may heavily emphasize the impor-
tance of increased recognition for the PLO in a well-
intentioned hope to encourage it to move toward
moderation. Because this approach would probably
infuriate Israel, the EC's complementary diplomacy
might still end up complicating US peace efforts.
Apart from the EC, France is likely to be the only
individual West European country that might consid-
er taking a more active role in Arab-Israeli diploma-
cy.' The French already have particularly strong ties
to the more moderate Arab countries and have recent-
ly improved relations with both Syria and Israel,
respectively, through successful visits by Mitterrand
to Damascus in November and by Israeli Prime
Minister Peres to Paris in December. We suspect that
the Mitterrand government might like to play some
role apart from the EC in the Arab-Israeli peace
process in order to bolster French pretensions to major
power status and to improve the government's foreign
affairs reputation, which has sagged, among other
reasons, because of the effective failure of the Chad
withdrawal agreement with Libya. French Foreign
Ministry officials have, however, repeatedly assured
the United States that Paris has no interest in a
mediation role, and we believe in any case that the
Mitterrand government will be wary of major initia-
tives, which, like the Chad agreement, could well
result in dashed expectations. Should Paris decide on
more active involvement, we believe it would probably
limit itself to a background "good offices" role whose
significance could later be inflated in the event of
progress. F_~
' According to US Embassy Lisbon, Portuguese Prime Minister
Soares might lead a factfinding mission to the Middle East in early
1985 on behalf of the Socialist International.
We believe that the Community's policy toward the
Arab-Israeli conflict might diverge more sharply from
US policy if both of two conditions were met:
? The United States failed to press ahead with the
Reagan Plan-or the Plan met with a definitive
rejection from either Israel or Jordan.
? The West Europeans perceived related threats
emerging to their interests such as a major increase
in Palestinian terrorism in Western Europe or a
significant rise in Soviet influence in the Arab
world.
Given their limited capacity to influence events in the
Middle East directly, the West Europeans would
probably turn to the United Nations if they decided to
become more active. We doubt they would reverse
their current opposition to Arab and Soviet proposals
for a UN conference on the Arab-Israeli conflict; they
would probably continue to view such a conference as
an exercise in futility most likely only to earn points
for the Soviets. More likely they would try to bring
the conflict once again before the UN Security Coun-
cil. As a first step they might endorse a Security
Council resolution put forward by France and Egypt
in 1982 that would effectively replace UN Resolution
242 with the principles of the Venice Declaration
including Palestinian self-determination and associa-
tion of the PLO in the peace process. F_~
Persian Gulf Security
We believe that the West European allies would be
very reluctant to accede to US proposals for a joint
military response even if Iran succeeded in closing
down the Persian Gulf. They would almost certainly
counsel the United States to defer action pending
further diplomatic moves. Should the United States
proceed unilaterally, however, the West European
allies would probably be inclined to offer limited
political and logistic support if they could be con-
vinced that US actions would be restricted to protect-
ing tanker traffic and were designed to minimize the
chances of a clash with Iran.F---]
The attitude of West European governments toward
cooperating with the United States in military action
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in the Persian Gulf could change, we believe, under
two conditions:
? A prolonged closure of the Gulf. The closure of the
Gulf for a period of a year or more, in our judgment,
would gravely impair West European economic
performance by causing the price of alternative
sources of oil to rise to more than double their
current levels. Economic growth would nearly come
to a halt, and unemployment, inflation, and bal-
ance-of-payments deficits would rise substantially.
Faced with such prospects, West European leaders
might conclude several months into a closure that
the benefits of taking action outweighed the risks.'
? A spread of the fighting to the Arab Gulf states.
This development would directly threaten West
European interests through its effects on the infra-
structure and stability of these key trading partners
and energy suppliers. It would also probably lead
these states to issue demands for Western assistance
that the West Europeans would ignore only at the
peril of suffering a significant future decline in the
share of the Arab Gulf market. The United King-
dom would face especially strong pressures because
of its close historically rooted security ties to the
smaller Gulf states. London has in fact already
assured Kuwait that it would assist in its defense
should it be attacked by Iran.F----]
We believe that the United Kingdom and France
would be most likely to contribute forces along with
the United States for military actions in the Gulf
should either of the above two conditions materialize.
Both countries have special interests in the Gulf
region, are comfortable with the idea of military
intervention, and possess relevant military capabilities
including the substantial French fleet at Djibouti. We
think it considerably less likely that Italy would
participate because its military intervention capabili-
ties are limited and its major interests in the Middle
East lie in the Mediterranean rather than in the Gulf
region. West Germany would not get directly involved
in a military intervention because it interprets its
Constitution as prohibiting such action. Spain, Portu-
gal, and Italy would probably offer transit rights to
the United States on a case-by-case basis, while
Turkey might demur in order to avoid jeopardizing
close economic ties to Iran.)
According to diplomatic reporting, both the United
Kingdom and France would set conditions on their
involvement in Gulf military action:
? Both countries would insist that the scope of the
intervention be kept as limited as possible and
specifically that the United States refrain from any
attempt at toppling or punishing the Khomeini
regime.
? Both countries would also probably insist on formal
invitations from the Arab Gulf states. The United
Kingdom might insist that France also take part in
the intervention because, according to US Embassy
London reporting, the British resent France's sale to
Iraq of Exocet missiles whose use against Iranian
shipping has raised the possibility of an Iranian
effort to close the Gulf. London also might insist
upon compensation from other countries-Japan in
particular-that would benefit far more than the
United Kingdom from the reopening of the Gulf
because of their much higher dependence on oil
from this region.
? France would almost certainly insist on formally
separating its actions from those of the United
States and the United Kingdom as it did in the Red
Sea minesweeping operations.
Both the United Kingdom and France might also be
willing to take unilateral military action to support
Arab Gulf states facing a moderate external threat
such as occasional Iranian airstrikes or an internal
threat such as an Iranian-inspired Shiite rebellion.
Both countries have forces designed for such contin-
gencies-the recently upgraded British 5th Brigade
and the French Rapid Action Force 6-and both have
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shown some willingness in the past to act unilaterally
in defense of their own and Western interests in the
region. France, for instance, dispatched commandos
to Saudi Arabia in 1979 to help quell the takeover of
the Grand Mosque, while British military officers led
Oman's successful effort during the mid-1970s to put
down the South Yemeni-inspired Dhofar rebellion.
The Arab Gulf countries might prefer to call on the
United Kingdom or France rather than the United
States for assistance because they might believe there
would be less risk of internal criticism or Soviet
countermoves. Because both the United Kingdom and
France lack substantial airlift capacities, however,
they would require US transport assistance to carry
out an independent intervention in the Gulf region.
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