GERMANY 

I . Germany in PcrsE__eC' ti~ 
The advent of the present Bonn Government in December 1966 marks a turning point in German American relations . The Adenauer Erhard years were years of German dependence upon the United States , with the FRG accepting U. S . t utelage in return for our security guarantees and our support for German efforts to rebuild a prosperous and respected nation. The fall of Erhard late in 1966 , and the c reation of the Kiesinger Brandt government , signalled the evolution of German policy toward greater emphasis on t he pursuit of reunification of their divided nation. The r e l ative absence of crisis in Europe and the public belief t hat Soviet aggression had become somewhat less likely ; t he growth of a detente psychology; the passage of years since 1945 and the erosion of the post·war fears and sense of guilt ; de Gaulle ' s reki11dling of nationalism first in France and then elsewhere in Europe; all contributed to a greater German sense of independence from tutelage, and more active efforts t o lay the ground~ork for eventual reunification. I n Germany , hm~­ever, this has taken place without serious strain on FRG ties witb NATO , and without rupturing cooperation and partner­
ship with the U0 S. NATO  and  the  U.S .  are  still regarded  in  
Germany  as  the basis  of  secu rity  on  which  German  efforts  t o  
pursue rLunification  rest  .  

The Kiesinger·-Brandt government ' s main single policy innovation has been the pursuit of a more flexible Eastern policy aimed at opening a dialogue with the Soviet Union , impro1ing relations with the Eastern European states , and seeking to xtend the FRG ' s ties with East Germany (short of recognition). The FRG regards improved relations with the East as a contribution to European peace and stability ; but at least equally importanL, it is a necessary prelude to ~rogrcss toward reunification. The results of this policy up to now have be n modest . This is not surprising . The 
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German leaders have been aware that they are pursuing <lifficuJt and long-range goals with their Eastern policy, and that resuJts will be slow at best. 
II. U.S. Policy Objectives 
We seek, in the frameworlr of a stable and secure European community, a friendly unified peaceful and democratic Germany. With these goals in mind, our specific objectives are to 1) maintain the excellent and confident bilateral relations we enjoy with the Federal Republic at all levels; 2) encourage continuing German support of European integration; 3) promote continuing German confidence and participation in maintaining the security of the West within the NATO framework; 4) promote German co­operation in meeting global economic and financial problems; 5) assure the continued freedom and viability of Berlin; and 6) help promote the eventual peaceful reunification of Germany. 
III. 
Problem Areas 

A. 
Berlin -Our policy is to seek to preserve access to the city; maintain the confidence of the Berliners in our ability to keep tLe city free; and maintain Allied solidarity to the degree possible in the face of serious problems with France in maLters external to Berlin but occasionally affecting Berlin directly. We must assure that our relations with Berlin officials are kept harmonious; and support the principle of close political and economic relations between Berlin and the Federal Republic but avoid al]owing serious confrontations with the USSR over Berlin Lo develop, as far as this can be done without nbandoning our responsibilities and rights. 


The Soviets have given the East German regime a certain amount of latitude on Berlin access matters. On March 10, the East Germans issued a ttdecreeu banning members of the right­radical N ~ parly of the FRG from traveling to and from Berlin. This was followed on April 13 by a ban on the travel of FRG cabinet members and other high FRG officials through East Germany. The Three Allies (U.S., U.K. qnd France) protested this action in a statement delivered to the Soviet &nbassy in East Bcrljn on April 19. To date, there are only three confirmed cnses of GDR authorities turning back FRG officials on the basis 0 ( this ban. Two were relatively minor officinJs; 
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the third was the Governing Mayor of Berlin, Klaus Schuetz, who is also currently President of the Bundesrat (Federal Council), the upper house of the FRG parliament this month. GDR officials indicated that it was the latter position that resulted in the refusal to let Schuetz travel on the Bcrlin­Helms ted autobahn to the FRG on April 26 . 
Identical letters protesting the illegality of this GDR interference with Berlin access were sent to the Soviet Ambassador in East Berlin by the three Allied Ambassadors in Bonn. These letters reminded the Soviets of their responsibility to provide access . NATO has been briefed on the situation and the FRG has propos e d a series of diplomatic countermeasures to try to force the Soviets t o tighten the reins on the GDR. 1he possibility of trade and travel restrictions on the GDR is also being studied by the three Protective Powers and the FRG. . 
The motives of the Soviet Union and the GDR in stirring up the Berlin access problem right now seem to include the following : 
1 . The East Germans are becoming increasingly isolated even witLin the Soviet bloc . In addition, they are pretty thoroughly isolated from the ma jor international trends ~nd activities o[ the day ( e.g., they arc absent from the NPT debate in tlie UN; they view wi th alarm the trend toward liberalization in some parts of the Soviet bloc and the first small steps now being taken to bring together the two parts o[ Europe) . One of the few ways available to Ulbricht to exercise leverage on both his friends and his adversaries i s 
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the GDR's de facto hold on German ground access to Berlin. He is now using this to sho\J everyone that the GDR is stiJ J around and has to be reckoned with. For the longer range, the East German regime may also hope that it can gradually, by salami tactics, assert an increasing degree of access control, reduce the free flow of traffic, and strangle West Berlino 
2. The Ru~~ians may wish to use Berlin frictions as a way of maintaining their hold on the increasingly restive East European countries. They may also be willing to let the GDR demonstrate to Bonn one side of the stick and carrot technique (Tsarapkin's willingness to talk with Brandt about non-aggression pacts being the ncarrot"). Finally, it is not unlikely that the GDR initiated the decrees and access interruptions on its own, with the Soviets acquiescing but not pushing the GDR into these acts. 
We \·.1ill have to see, through c1uiet diplomcitic intercession with the Soviets, whether the Soviets can be brought to recognize that some of the objectives they themselves say they have in mind for Centra] Europe (e.g., German acceptance of NPT, avoidi112. cbnll nge to the status quo there) are put in jeopardy by tbe GDR's challenge to free German access to Berlin. If we can interest the Soviets in this, the result will not be a sudden retraction by the CDR, but more probably an unannounced diminution in the nlunbcr of interruptions and denials of access . 
Tbere will probab1y be a rescission, without a major crisis, of the iITUllediat, probl ·rn over Gcrm3n officials ' access to Berlin, since t11e Sovie Union retains strong controls over the East Germa11s; has not ch3llenge~ the Allied regime in West Berlin; and gives no i ndic3t:Lon of \Jishing to provoke a major confrontation over the issue. The protests already made to the 
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Soviet Union have led lo some easing of East German inter£e1:ence. There are other measures available for use if necessa ry, includ­ing higher-level discussions with the Soviets and gradu:ted Western economic countermeasures against East Germany. 
The Berlin problem can probably be solved finally only in the context of a growing together of divided Europe of which it is a microcosm. In the meantime , we should use the politic2l, diplomatic, and economic means at our disposal to counter threats as they arise . These would include engaging the Soviet Union ' s own interest in not disturbing the status quo ; East German economic interests and fear of isolation ; and a clear understanding on our own side of the serious consequences to ourselves if Berlin were allowed to die on the vine. The damage to our relations with the Federal Republic; to Western confidence in our coITullitments and resolution; and to Soviet restraint based on tl1eir respect 
for our power and determination to protect our European 
inter sts , would be very grea t . 

B. German ~euni[_icat):.on and Eastern P~licy -One FRG 
major foreign po]icy goal remains the reunification of the 
German people . The ~Jstern policy of the governing coalition 

(better relations wilh Moscow, relations short of formal recognition with East Germany and diplo111atic relations with the Eastern European stales ) reflects an effort to shake up existing rigidities in the hope of developing a climate or , at leasl opportunities, for ultimate reunification steps . No responsible German has a reunification timetable but most politicia11s arc convinced that reunification can come about in sonc fashion . The leaders of the FRG know that at best i t will be a slow process, and they will have to be patient . 
Relations have been established with Romania and reestab­lishC'd with Yugoslavia . The Czcebs , treading cauti ous l y to avoid Soviet reaction to their internal liber8lization, will probably delay stablishing diplomatic relations wil h Germany for a year or two , but closer economic ties arc p robable . 
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Barring unforeseen circwnstances flowing from the present t urmoil in Poland, the Poles can be expected to resist FRG blandishments longer than the others. The USSR will resist any increase of German influence in Eastern Europe , but eventually may try to weaken German ties with the West, using German desire for reunification as bait. For the foreseeable future, however, the Soviets will not allow the GDR to be absorbed by the Federal Republic , nor is the Federal Republic likely to be seduced into abandoning NATO and EEC. More probalily, we are seeing the beginning of a long process of greater interchange and discourse between the two parts of Europe, to which current FRG policy has made an indispensable contribution. 
The FRG Eastern policy is consistent with our own. In fact, the FRG probably was influenced toward greater flexi­biliLy by the U.S. example, Nevertheless , there has been German sensitivity to the U.S. reaction as the FRG seeks to open a dialogue with the Soviet Union . German press reports , private gossip in Bonn and reports by German travelers returning from the U.S., all have been quoted to the effect that the U.S . is worried that the FRG is too accommodating to~ard the East, tallcing with the Russians behind our backs , etc . 
The _U.!..§Jo_§it_J-_2..I) -The highest U.S. officials have assured Llie FRG time and again tbal we think German Eastern policy is wise, and that we understand and sympathize with it. We \7ill have to show patience and sympathetic understand­
ing  on  this  score  for  some  time  to  come.  At  the  srnne  time,  
we  have  a  right  to  e~pcct the FPG  to keep  us  fully  i nformed  
about  their conversations with the ussr .  

C. Non-Proliferation Treal_y _(NPT) -Beginning i n 
January, -j 96i, wel1a.v8"-c-0-ndu~t-ccl -h-l~1cl~eds of consuI ta tions with the Germans about the NfT. The Germans have had some ser i ous objectjons to the Treaty text, most of which have been met. 
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Essentially, hoHever, they rernain lukewarm. For one reason, they feel that the Soviets want it primarily to hurt German security; the Germans in turn don ' t like to make this kind of commitment to their enemies (a commitment they did not mind makina in 1954 to their NATO Allies). Many Germans feel they ·ill have to sign the Treaty . This realization does not make them any happier . Brandt ' s SPD , in general, advises adherence ; Kiesinger ' s CDU is either opposed or 
lukei.:varm. Principal opponents of the Treaty include the 
leader of the Bavarian wing of the CDU , the CSU--Franz Josef Strauss. 
The ~~.§-~ Posi!_ion We believe the FRG should adhere to the Treaty both because the Treaty is valuable in itself and because FRG policy objectives in relations with other Western nations and wit~ Eastern Europe would suffer if the FRG impedes or rejects the NPT. 
D. Eur_QpeaJ}_S~curi_1=Y Q~~§!}--9fl.~. ,,. -When the Cha.ncellor speaks of the future of Europe, we know he is not thinking of a Europe which would in any way be hostile to the United States. He foresees our acting together in friendly agreement. Beyond that, it is less clear what he has in mind . It does seem, however} that the Germcins today prefer a ELn.'.'ope related to the U.S in a partnership of equals rather than in what used to be called the Atlantic Community framework . 
Although the Gern~ns sense hat European arrangements are presently in flux, they contir1ue to rely on NATO as the surest guarantee of German survival, at least under foreseeabJe circumstances . They recognize that the U. S. with 200,000 men in Gc~rrnany and its nuclear capacity i s t he best guarantor of German security. At the same time , t hey are aware of our need to neutralize foreign exchange l osses 
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incurred by stationing our troops and their dependents in Germany. Between 1961 and 1966 the German Government purchased military equipment here in the amount of $600-$700 million annually. In 1966, the Germans no longer found it possible to make military purchases of the previous magnitude. The current arrangement (German purchase of $500 million worth of medium-term Treasury securities) expires June 30. US/FRG talks in Washington May 9 and 10 resulted in an impasse. The German offer to continue cost neutralization for one year at the $500 million level was unacceptable to us in view of the anticipated net foreign exchange loss of about $770 million. We pointed out the seriousness of our balance of payments situation, congressional pressure for troop reductions, and the favorable FRG balance of payments position. There was, however, no give in the German position. The talks were adjourned for two or three weeks to permit the FRG to review the matter with the Bundesbank and in the Cabinet. We still expect to achieve agreement. 
E. International Monetar,y_ Pr_oJ21-_~ms -The strong measures announced at the end of the year by the President to correct our balance of payments problems and to control American investment overseas were accepted by the FRG as a welcome step, although there is concern that we may adopt additional restrictive trade measures. To counter the need for US restrictive measures, the FRG has proposed European concessions .in Brussels to encourage US exports. In Washington during gold discussions and later at Stockholm the Germans have been very helpful in maintaining the international monetary system. 
F. Relations with France -The relationship with France is important for the Federal Republic because a) rapprochment with France has wide popular appeal; b) the Franco-German tie is necessary for progress toward a more united Europe, eventually; 


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c) association with France may help German efforts in Eastern Europe. The promise of closer ties with France was a key policy plank of the coalition (in contrast to Erhard's alleged neglect to this relationship). 
The above considerations sometimes put the Germans in positions where they come perilously close to having to choose between their basic security interests (NATO/USA) and their relations with France. This is a choice which the Germans assiduously avoid. Nevertheless from time to time the Germans publicly disagree with the French on issues such as: 1) unity '1ith the United States and others in Stockbol.rn on the two prices for gold and the additional drawing rights; 2) continued need for N_TO protection and specifically United States protection at a time when France has withdrawn from the Alliance in all but na1n~; 3) FRG desire to expand the EEC to include the United Kingdom. The Germans in fact seek to maintain a friendly tone in their relations with France while disagreeing with many major elements of French policy. , 
U So Po1icy -We should continue to express understanding for German desires for good relations with France. At the same time, we expect the Germans to keep the United States fully in­formed of any Franco· German agreements or planning that affect our interests and security arrangements. 
G Political E·tremism -Political stability under a democratic govc1:-n111ent is clearly a prjmary American objective in Germany. As if rcco~nizin8 this, the radical movements of both the right and left shar a virulent anti Americanism. The extreme right, r prcse11ted by the National Democratic Party (PPD), is now seated in all but two of the German state parliaments. 






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It had its greatest victory in Baden-Wuerttemberg on April 28 with almost 10 percent of the vote. It is likely to gain Bundestag representation in 1969. Although it may not grow much more, its major importance is that the major parties may during the 1969 elections try to pre-empt some NPD attitudes in order to attract voters. Furthermore, NPD growth causes public uneasiness in other countries, including the United States and other NATO members, and has been and will be exploited by the USSR in savage propaganda attacks against the FRG. Left-wing anti-Arnericanisrn has found little echo among the population except with respect to the war in Viet-Nam, \Jhich has been exploited as an issue by left-wing elements. 
There has been some concern expressed in Eastern and Western Europe that the recent growth of the NPD may mean that Germany could repeat the process by which the Nazis came to power in 1933. It is important to bear in mind that there are fundamental differences in conditions now: the German economy is now strong; Germany is now no longer politically adrift and alone in a hostile Europe; it is no longer potentially lhe strongest military and industrial po~er on the entire continent; its people have been through the erpcri .nee of Nazism once, and except for the ten percent fringe (which Germany has in common with many other countries), the German people have not shown an inclination to repeat thal tragedy. 

U.§~ Posture -We can do very little directly about right radi alisrn in Germany. We should (a) recognize that 90 percent of the electorate has consistently voted against the NPD; (b) avoid official public comment on what is after all an jnterna1 polit.:ica1 matter; (c) be CJware that the NPD is fed by the absence of any other means for registering strong protest on election d~y; and (d) see that frustration in the pursuit of lcgjtimate German nationnl aims feeds nationaljst extremism. Basically th:i.s is a problem the Gern1ans will have to mcPL themselves. Sharply aware of their past history, the Germa11s kno\7 perfectly well from Lhe press alone what the outside world thinks of the NPD . Offj ci al pub] j c cornrnc.nl. from alYco.:1d only feeds extremists. 
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t to g(neral on lut·on hat th d ·.vis:Lon that male up rious