2. The line of division lay between France, Germany and Italy, on the one hand, and Belgium and the Netherlands, on the other. The latter two countries rejected the idea of a common budget for the European Defence Community. They insisted on the right of national governments to veto decisions on the Council of Defence Ministers which is to be the supreme executive authority of the Defence Community. While all parties rendered varying degrees of lip service to the idea of an eventual European federation or confederation, the meeting underlined a basic difference of view. The Benelux countries seemed to want little more than a coalition of European Governments presiding over a European Army composed of national contingents. The French, Italians and Germans want a measure of pooling of sovereignty in the defence sphere to lead eventually to more ambitious plans for political fusion.

3. A second difference arose over the relationship between the European Defence Community and NATO. It crystallized over the question of the duration of the European Defence Community Treaty. The Netherlands Government suggested that it should be co-terminous with the North Atlantic Treaty, i.e. for a twenty-year period. The French proposed a fifty-year period for the European Defence Community Treaty.

4. The Netherlands Foreign Minister returned to The Hague with the suspicion that the French regard the North Atlantic Treaty as an ephemeral defence alliance, organized to cope with a particular crisis and that they take no interest in the idea of a North Atlantic Community. Mr. Stikker has told our Ambassador in The Hague that he could not believe his ears when he heard M. Robert Schuman describe in a speech the "caractère occasionel et essentiellement éphémère" of NATO.

5. The Netherlands Ambassador, under instructions from his Government, called on me on January 8 to express Mr. Stikker's concern at this development. We have, of course, always considered that there was nothing incompatible in developments leading towards European confederation and the idea of a North Atlantic Community. Indeed, from our point of view, those two concepts must be intimately related, both politically and militarily. We think that the French Government share this view and hope that Mr. Stikker's concern is ill-founded. In view of Mr. Stikker's interest in the matter, I have today sent him a personal message on this subject, copy of which is attached hereto.⁴¹

6. Despite the somewhat gloomy prospects, the French Government still are optimistic that they may be able to obtain an agreement on the principles of the European Defence Community before the Lisbon meeting, but it may be at the cost of dropping, at any rate for the immediate future, a good many of their more ambitious plans for the political superstructure of the European Defence Community.

7. One method of compromise, which is at present being explored, is for agreement upon a period of transition, perhaps to last till 1954, during which national control over defence policies and budgets would remain. Only then would a European commission produce European defence estimates and submit them to a Council of Ministers.

8. Even in this attenuated form, the conception of a European Defence Community remains, in our view, of the greatest political importance. It provides the only framework yet suggested by which Germany could be associated with the defence of Western Europe on terms acceptable both to the French and German Governments. Its failure would be a very serious blow to French prestige and morale. Meanwhile, the fall of the French Government has been a further disturbing factor. Although it is unlikely to affect French policy towards the European Defence Community, it may bring further delays in the timetable.

9. The United States, for their part, have in the past taken the view that if agreement could not be reached on the European Defence Community by the date of the Lisbon meeting, they would proceed with plans of their own for the association of Germany with Western defence. The latest messages from Washington, however, indicate an important modification in this attitude. In conversations with Mr. Churchill and Mr. Eden, Mr. Acheson has now made it clear that he sees no alternative to the creation of a European Defence Community.

10. The relationship of the United Kingdom to the European Defence Community is a somewhat uneasy one. Mr. Churchill's resumption of the Prime Ministership gave rise to some unjustified hopes of a fundamental change in United Kingdom policy towards plans for European federation or at least for a United Kingdom contribution to the European Army. These hopes have been dashed by the subsequent attitude of the United Kingdom Government.

11. Insofar as such hopes looked to the participation by the United Kingdom in a European federation, they were founded on a misconception of the realities of the United Kingdom position - realities unlikely to be changed by any change of Government. The United Kingdom could not merge itself in a Western European federation without profoundly modifying not only its ties with the Commonwealth but its relationship with the United States. It is probable that the dislocations that would be involved in any precipitate move towards the federation of the United Kingdom in Western Europe would weaken the free world. Our Ambassador in Washington reports that these facts are appreciated by Mr. Acheson, although there are certain tendencies in Congress towards the more facile assumption that the United Kingdom could be dragooned into a Western European federation.

12. So far as the relationship of the United Kingdom Government towards the European Defence Community is concerned, there is little doubt that the obvious skepticism of the United Kingdom regarding the feasibility of the Pleven Plan⁴² has, in the past, played a part in strengthening the reluctance of the Benelux countries to accept the more drastic implications of that Plan.

13. Mr. Churchill's personal views on this subject are obviously of importance and you may think it desirable to discuss the problem with him during his visit here.⁴³ There seems now to be little question of the United Kingdom Government actually offering a token force for integration in the European Army, although this might still turn out to be a possibility if the European Defence Community develops along the very loosely integrated lines advocated by the Benelux countries. For the present, however, Mr. Churchill and Mr. Eden have both made it clear that they have no intention of making such a contribution. Moreover, the French Government have now indicated that United Kingdom participation which would require an alteration in the proposed basis for the European Army would be unwelcome as it would tend to delay the acceptance of an agreed plan even further.

14. Recent public statements by the United Kingdom Government have been carefully designed to allay any suspicion that the United Kingdom does not in fact fully support the idea of a European Defence Community, even if unable to join it. Nevertheless, as you may recall, Mr. Churchill, in his private discussion of the European Army with me in London, made it clear that he considered the French plan as highly impractical. As he put it, the proper way to bring European armies together was to maintain their national identities and tie them together "as a bunch of sticks" rather than to mix them up as "wood pulp". It is much to be hoped that this private skepticism will not be sensed by the Dutch and Belgians who might then be encouraged to hold out against any compromise on the European Defence Community in the hope of securing an even looser organization which might secure participation of the United Kingdom.

15. It might be desirable, if you agree, to emphasize to Mr. Churchill the importance which we attribute to the concept of a European Defence Community and the dangerous and difficult situation which would result if the Pleven Plan collapsed.

16. This question has some bearing on the future location of the principal agencies of NATO. As you know, the United Kingdom has insisted that any such concentration should be in London rather than in Paris. It might be desirable to point out to Mr. Churchill that the establishment of NATO Headquarters in Paris would have the effect of securing a close working cooperation between the European Defence Community and the North Atlantic Treaty Organization. Close cooperation between the two is essential if, in the words of the communique on the Churchill-Truman talks issued today, the defence of the free world is to be strengthened and solidified by "the creation of a European Defence Community as an element in a constantly developing Atlantic community".

17. I am attaching to this note an excerpt from a teletype from Washington, dated January 9, on the Churchill-Truman talks, which deals with the discussion on the European Army which took place in Washington between Mr. Acheson and Mr. Eden.^? You will see that Mr. Eden agreed to do his best to convince the Benelux countries that they should cooperate in the European Army Plan.

L.B. PEARSON