GERMAN OFFSET NEGOTIATIONS

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-14-5-7-3
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: January 11, 2017
• Document Release Date: October 21, 2011
• Sequence Number: 7
• Publication Date: June 25, 1971
• Content Type: MEMO

~~ ~?~
No Objection to Declassification in Part 2012/04/02 : LOC-HAK-14-5-7-3
THE \VHITE HOUSE ~"'/ "~' "/~~
~~~~,
-"~` URGENT ACTION
June 25, 1971
SUBJECT: German Offset Negotiations
MEMORANDUM FOR: DR. KI5SINGER
FRC7M: ERNE5T JOHNSTON ~~ o
J
State's xnemarandum states that unless otherwise instructed the Delega-
tion Chief, Nat Samuels would accept such a German offer an the spot, or
failing that, would accept ad referendum whatever the Germans can be
persuaded to put forward in the ,Monday and Tuesday meetings.
The most recent Embassy cable from Germany at Tab TT.~, received after
State's memo,, indicates that the Germans are not prepared to go much
further khan their current offer. Specifically the FRG Cabinet decision
does not allow additiona:J barracks rehabilitation or interest free loans.
~-o `? ~
State. anticipates that the Germans might be persuaded to improve their'~'"?
annual offset offer by an interest free Joan of $200 to $400 million and a
$l00 milJian proposal to rehabilitate barracks in Germany.
State has come in today for a decision an offset negotiations prior to ~ ,~'~?`
2525X1
The agencies are severely split. Treasury wants to insist on support pay
meats of $300 million which is highly unlikely and also above the fall back
position which the President decided in February 1971. Defense believes
that we should push the Germans in Monday and. Tuesday's meeting but not
decide our response until later.
State's proposal, without the ad referendum element, is within the guide-
lines of the. initial negotiating position approved by the President but its
short fuse and its vague ad referendum feature argue against acceptance
now, particularly in light of the Mansfield episode which occurred after
the. Presidential guidelines were issued.
State argues that we should wrap the negotiations up now since (a) the
Germans are unlikely to go much further than whatever they agree to on
Monday and Tuesday and (b) further delay would damage our relations
DOS, NSS, review
completed
e~rnt'~~r
No Objection to Declassification in Part 2012/04/02 : LOC-HAK-14-5-7-3
 No Objection to Declassification in Part 2012/04/02 : LOC-HAK-14-5-7-3
SECRET
tivith Germany. The real but un,spaken problem,. however, is that a delayed
decision would alloy Laird, and especially Connally and Petersax~, to come
iii with a strong negative recoxnrxzendation on whatever State brings back.
Thus, there is no doubt that a delayed decision is likely to make the issue
more public and would make it more difficult to accept any probable German
position. Samuels' testimony before the Joint Economic, Committee on
Thursday has already brought aut too many details and ha.s probably upset
the Gerrr~ans.
The memorandum far the President at Tab S proposes that we not accept the
State proposal, in view of the shortness of time, the wide interagency dis-
agreexnent and the uncertainty of the German position.. Shave riot mentioned
the State x~nemorandum to Peterson: in case you should wish to recommend
that the. President accept the State proposal. Peterson would undoubtedly
prefer to delay or, even more likely, to accept the Treasury position.
The President's decision hinges partially on what he told Chancellor Brandt.
We have had no direct report on this. However, Sra~t did tell the, Secretaxy
of State that the President had recomxnen,ded that the negotiations be left to
the experts, which strongly implies a soft line.
RE COMMEIVDATSONS:
1. That you sign the memoxandum at Tab S to the Pxeside~xt recommending
that we press the Germans strongly but postpone our offset decision until
after the June 28 meetings.
~. That you inform the State Department before 1V.[onday of the President's
decision by the xnemarandurn at Tab TS.
Concurrence: SI 5onnenfeldt ~~~~'-
No Objection to Declassification in Part 2012/04/02 : LOC-HAK-14-5-7-3