I attach herewith two studies prepared in the Department on the subject of "German Reunification and European Security", and "Disarmament". It seemed best to treat these two questions separately since that appears to have been the decision of the Big Four at Geneva. These two papers attempt only to analyse the proposals made on these subjects.

2. We are working on a study of the wider implications of the Geneva Conference, but I would prefer to delay presenting it to you for your consideration until further assessments of the Conference, its impact on our relations with the U.S.S.R., and its probable effect on the NATO alliance, can be received and thoroughly studied. I hope this may be ready by the end of next week.

J. L[éger]

Secret
[Ottawa], July 29, 1955

As expected, disarmament was one of the main topics of discussion at Geneva. In their opening statements, two heads of government, Messrs. Faure and Bulganin, devoted a good deal of attention to this subject which was also dealt with the President Eisenhower, while Mr. Eden considered its European aspect. The agenda agreed to on the second day included disarmament as the third of four items, the first two being German reunification and European security and the fourth the improving of East-West relations. The summit discussions on the fourth day were thus devoted to disarmament and the final Directives issued by the heads of Government to their foreign ministers also dealt with the subject.

The Eisenhower Proposals

2. The most spectacular development was President Eisenhower's suggestions (1) that the United States and the U.S.S.R. should "give each other a complete blueprint of our military establishments, from beginning to end, from one end of our countries to the other"; and (2) that each country provide unlimited facilities for aerial photography of its territory by the other country - "We to provide you the facilities within our country, ample facilities for aerial reconnaissance, where you can make all the pictures you choose and take them to your country to study, you to provide exactly the same facilities for us and we to make these examinations".

3. There is nothing fundamentally new in these proposals. Provision for aerial surveys of national territories under certain conditions was made in the United Nations plan for the control of atomic energy which was vetoed by the U.S.S.R. in 1948. Similarly, the disclosure of full information on armed forces and armaments (both atomic and non-atomic) as a necessary preliminary to disarmament was the subject of proposals submitted by the United States in the Disarmament Commission in 1952 which were consistently rejected by the Soviet Union. There is no doubt that both features are implicitly included in the Western perennial proposal for unlimited inspection "anywhere at any time" which has proved the main stumbling block in East-West disarmament negotiations. The novelty of the President's proposals resided in the fact that they were presented in a dramatic fashion in a new psychological context brought about by recent technological developments.

4. In presenting his proposals, the President was elaborating on the suggestion contained in his opening statement that future discussion on the vital issue of inspection might be oriented towards the establishment of "an alarm system". This was in line with recent indications given by the Americans that total inspection, Western style, might not be a practicable proposition from the United States point of view at this juncture. The new approach is also prompted by the consideration that the most thorough system of inspection which might provide for adequate control of future atomic and non-atomic activities from the time of its establishment could not ensure the complete elimination of stockpiles of nuclear weapons. The President confirmed this development specifically in his July 21 speech when he said, "We have not as yet been able to discover any scientific or other inspection method which would make certain of the elimination of nuclear weapons. So far as we are aware no other nation has made such a discovery. Our study of this problem is continuing."

5. One great advantage of the President's proposals is that they may provide new ground for further discussion by the United Nations of the most important aspect of the disarmament problem. There is no indication that the Russians may be able to accept this new approach. They refrained from making any direct comment during the conference on the President's suggestions which Bulganin described as "frank declarations" having "great significance for the examination of this point in the future". The offhand reaction of many observers is that the U.S.S.R. would have little to gain and a good deal to lose from the implementation of the proposals since, as Senator George put it, the United States "are living in a fish bowl from the military standpoint". Perhaps the greatest merit of the President's proposal was to offset to a large extent the propaganda advantage which the Russians had gained by the submission of their latest disarmament plan originally put forward in the Disarmament Sub-Committee last May and pushed again into the spotlight at San Francisco. If this was the main aim of the Stassen-Radford-Rockefeller team, which apparently rushed to Geneva to assist Mr. Eisenhower in this particular exercise, the President's gesture may be regarded as a master stroke.

6. Although President Eisenhower reiterated in his inaugural speech the suggestion which he originally put forward in 1953 that part of the savings resulting from the reduction of armaments should be earmarked for an international development fund, he did not elaborate on this in his disarmament speech. This idea was developed at some length by Mr. Faure both in his opening statement and during the disarmament discussions.

The Faure Plan

7. Mr. Faure proceeded on the premise that agreement on control and on sanction for violation of disarmament provisions can hardly take place within the framework of a convention dealing exclusively with the "traditional and negative aspects" of disarmament. It is necessary to consider the problem in its "positive" aspect and more specifically to connect the disarmament programme with the disposal of all the savings resulting from disarmament measures through the establishment of an international economic organization which would carry out a world-wide programme of assistance to under-developed countries. Disarmament control would thus become a global control of a financial and budgetary nature which would be easier "inasmuch as the budget is a single document". The essential point according to Mr. Faure is that there would be automatic sanction since a participant guilty of a violation "would be penalized by a sum equal to the amount of the dissimulation and the infraction".

8. The Faure plan bears, it seems, the characteristic mark of French idealism and while in some respects it develops a familiar idea, it will have to be examined very closely. On first examination it is debatable whether the basic assumption of the plan, i.e., that all money saved should be assigned to the international agency, will be generally acceptable. There would be no reduction, under the French scheme, in the burden carried by the people in the most prosperous countries. It is hard to visualize how the participating countries' budgets could be left as they are, should there be a substantial reduction of tension.

9. The question of earmarking savings resulting from disarmament for international development was discussed in recent years by the General Assembly. Canada, together with the majority of industrial countries, then indicated that it could be prepared to devote only "a portion" of the savings achieved through disarmament for development purposes. Unless industrial countries come around to the view that the totality of savings should be deposited in the international fund, the implementation of Mr. Faure's plan for mathematical control would need to take place in such a way as to ensure that the portions of savings not committed to the development fund are not ultimately diverted in one way or another to military purposes. Assuming universal acceptance of the plan to earmark all savings to the development fund, the French scheme would raise the problem of establishing a budgetary and financial control which would be effective. President Eisenhower's remark in his disarmament statement that "we have not as yet been able to discover any accounting or other inspection method of being certain of the true budgetary facts of total expenditures for armament" was obviously directed to Mr. Faure's proposal. Even assuming that effective financial control is possible, the French plan would still raise a number of problems from a security point of view. A country like the U.S.S.R. might be prepared to accept considerable burdens over a period of years to manufacture clandestinely hydrogen bombs towards world supremacy. It is clear that the French proposal could not be implemented unless satisfactory arrangements could be made as regards inspection and control.

10. As it stands one sure disadvantage of the French plan is that it will likely raise unnecessary expectations on the part of underdeveloped countries and will make it more difficult for the industrial countries to resist pressure to take decisions on a number of problems which they consider premature. Whatever its merits, the Faure plan has contributed substantially to offset the impression which might otherwise have been left in the first part of the conference that the Russians were attaching more importance to the problem of disarmament than the Western powers. While, as intimated above, the plan should not be summarily discarded it can hardly be regarded as a realistic proposal in terms of furthering the progress made in the Disarmament Sub-Committee.

Eden Plan for European Disarmament

11. In addition to new proposals by the United States and France on disarmament in general, the West formally introduced in Geneva the idea of regional disarmament as a first step towards general disarmament. This suggestion was made by the United Kingdom and may be regarded for all practical purposes as an extension of the Eden plan for a German settlement. Mr. Eden's proposals for European disarmament appear to be based on the assumption that the German problem can hardly be solved without some agreement on the limitation of armaments at the German, if not the Central European level. The Eden plan suggests an agreement on "the total of forces and armaments on each side in Germany and the countries neighbouring Germany". The implementation of this agreement would require "a system of reciprocal control to supervise the arrangements effectively."

12. The Prime Minister underlined that these suggestions were intended to make a practical experiment in the operative control of armaments in Europe "which might, as it were, extend outward from the centre to the periphery." He suggested that the operation might begin "on either side of the line which now divides East and West in Europe" and called for immediate agreement on joint inspection teams appointed by East-West military commanders. This suggestion seems in line with the Soviet proposal of May 10 for a Four-Power joint control of forces in the two Germanies.

13. The German Government apparently holds the view that the European problem can only be solved in the context of global disarmament and that in any event armaments control and inspection should not begin before the unification of Germany. Whatever the answer to the question whether disarmament can be separated in whole or in part from other outstanding issues, the United Kingdom suggestions for the regional limitation (if not reduction) of armaments and armed forces and also inspection should be regarded as a sensible move at this juncture in line with the policy of seeking all possible avenues of agreement.

Soviet Proposals

14. In contrast to the Western powers, the Soviet Union added little to its proposals of May 10 last submitted in the Disarmament Sub-Committee. Bulganin's opening statement may be regarded in the main as an amplification of the first part of these proposals concerning political questions with the emphasis being laid on European security. The Soviet Prime Minister thus reiterated his government's suggestions for the withdrawal of foreign troops, the settlement of Far Eastern issues and the normalization of trade relations. In this case the withdrawal of foreign troops was related not only to Germany but to "the territories of European States."

15. Most of the proposals on disarmament proper contained in the Soviet plan of May 10th were reiterated in Geneva either in Bulganin's opening statement or in the disarmament paper which he tabled on July 21. These proposals relate to the levels originally suggested by France and the United Kingdom for the armed forces of the United States, the U.S.S.R., China (1 million to 1.5 million each) France and the United Kingdom (650,000 each), the pledge not to use nuclear weapons except in defence against aggression subject to Security council approval, the timing for the complete prohibition of nuclear weapons (after completion of 75% of agreed reductions on conventional armaments and armed forces), the discontinuation of nuclear tests and the freeze of present levels of armed forces, this time limited to "armed forces stationed on foreign territories." (The United States government has not yet accepted the Anglo-French proposals on the levels of the Big Five armed forces and on the time-table for the complete prohibition of nuclear weapons. Neither the United States nor the United Kingdom has yet committed itself on the question of discontinuing nuclear tests).

16. The novel features in the Russian programme put forward in Geneva are three-fold. In the first place, Bulganin announced that the Soviet Union had decided to demobilize the military contingents to be withdrawn from Austria and he suggested that the other occupying powers should equally reduce their armed strength in an amount corresponding to the number of their forces in that country. In the second place, the Russian disarmament plan suggests that pending the conclusion of the disarmament convention, the Big Four should "undertake not to be the first in the use of atomic weapons against any nation and call upon all the states to join in this declaration." This proposal involves a number of military and political factors which will have to be carefully weighed by the West bearing in mind the possible use of smaller atomic weapons in a limited war as recently suggested by the United States in connection with the Formosa crisis.

17. The third addition to the Russian programme is the proposal that armed forces of countries other than the Big Five should be limited to 150,000 to 200,000 men. This proposal may be related to the Soviet suggestion on May 10 that armed forces in Germany should be withdrawn and that "strictly limited contingents of local police forces" be formed in both parts of Germany. At present, the NATO limit set for West German armed forces is 500,000 and the present number of armed forces in East Germany is believed to be approximately 100,000. When agreeing to co-sponsor the above-mentioned proposal for the limitation of Anglo-French forces to 650,000 men each, the French explained privately that their implementation of this measure would only be possible if Germany had no more forces on the European continent than France, which in practice would mean a German ceiling of 300,000 men.

Conclusions

18. In general and bearing in mind the admittedly limited purpose of the Geneva Conference, the Four-Power discussions on disarmament may be regarded as a satisfactory exercise. The West has put forward new proposals which may conceivably lead to further progress in disarmament negotiations although in the case of the Eden proposals further exchanges may take place more fruitfully in Geneva than in the United Nations. The United States has adopted a more positive attitude than that to which we have been accustomed in recent years. Their more flexible and realistic approach on the question of inspection which has been the main stumbling block in East-West negotiations was reflected in President Eisenhower's disarmament statement. Although they made no new concessions, the Russians on their side have not retreated from the advances towards the Western position which they made in their proposals of May 10. The Soviet disarmament plan tabled at the Conference was stripped of the unacceptable proposals on sensitive political issues contained in their previous paper. In addition, the Russians have agreed to make a contribution to the proposed international atomic energy agency "as soon as an agreement on setting up the agency has been reached". Finally, there was unanimous agreement on the continuation of the Disarmament Sub-Committee discussions on August 29 in New York.

19. On the other hand, there has been no narrowing of the gap between the Western and Soviet positions. The Russians have not clarified their position on the question of control and inspection nor did they react to President Eisenhower's suggestion of a new approach to this problem. What is more immediately important, the Western Powers may not have succeeded in "unwrapping the package" of May 10, i.e., isolate its disarmament proposals. In spite of what is said in the preceding paragraph about the new Russian disarmament proposals, there were indications during the drafting of the directives to the Foreign Ministers that the Russians intend to keep these proposals in a political context and the final wording of the directives which is apparently the result of a compromise may still enable the Soviet Union to prevent fruitful discussions in the United Nations sub-committee.

20. From a propaganda point of view, President Eisenhower undoubtedly stole the show with his proposals of July 21 and, in general, the sum total of Western plans will have offset to a marked degree the gains derived by the Russians from their proposals of May 10. The Russians, however, may have scored a point on the subject of the prohibition of nuclear weapons at which they have hammered both in their opening speech and in the disarmament discussions. In the light of reports available, the Western powers seem to have just about ignored the subject and their public statements leave the impression that they have definitely abandoned the idea of eliminating nuclear weapons. Behind the scenes the United States succeeded in preventing any reference to this aspect in the final directives.

Secret
[Ottawa], July 29, 1955

As had been expected by all the participants, the Geneva Conference produced a definition and confrontation of substantive positions but produced little or no progress towards concrete solutions of the main problems the Conference faced: German reunification, European security, disarmament. Important proposals on all three subjects were, however, put forward. In this paper we propose to examine those relating to German reunification and European security.

2. In their opening statements, all four Heads of Government agreed that these two related questions lay at the heart of their problem. But whereas Western leaders insisted that German reunification must have priority, Premier Bulganin gave first place to the development of a European security system. It was not until the final day of the conference that agreement was reached, in referring the question to the Foreign Ministers, on the basis of "the close link between the reunification of Germany and the problem of European security and the fact that the successful settlement of each of these problems would serve the interests of consolidating peace". After this preamble, the substantive part of the directive instructs the Foreign Ministers to deal first with "a security pact for Europe or for a part of Europe" and relegates German reunification to an acknowledgement of Four Power responsibility for "the settlement of the German question and the reunification of Germany by means of free elections ... in conformity with the national interests of the German people and the interests of European security".

3. At the beginning of the conference, the Western Powers sought to protect the position of the German Federal Government, that European security should not be discussed until agreement had been reached on German reunification. This was really an untenable position from the beginning and the final position adopted can be defended on the grounds that the directive was given on the clear understanding that the two questions of European security and German reunification were to be regarded as interdependent. There is, therefore, no intention on the part of the West to agree to perpetuate the division of Germany by including both Germanys in a European security system. At the same time it is clear that the Soviet authorities have no intention of agreeing to a European security system which would sanctify the reunification of Germany within NATO.

4. Apart from private conversations with members of the Soviet delegation of which we know very little, proposals were made by both sides in an attempt to find a way around the central road block of the conference. From the Western side a number of proposals and suggestions were put forward to convince the Soviet leaders that, if they agreed to German reunification, they need have nothing to fear from a reunified Germany in NATO. To this end Sir Anthony Eden made the following suggestions:

(a) A Mutual Security Pact of the Locarno type between the Big Four and a United Germany (which he later said might be extended to include other European countries as signatories);

(b) A scaling down "of the forces and armaments of each side in Germany and the countries neighbouring Germany", with reciprocal supervision in which a unified Germany would participate with the Big Four;

(c) A demilitarized zone between East and West in Central Europe.

5. Premier Faure made the further suggestion that the Western Powers should offer the Soviet Union the same safeguards vis-à-vis Germany as the Western Powers had already undertaken among themselves under the Paris Agreements. He went on to propose that a united Germany be included in a European security organization open to all European states and held out the prospect "that in the future these two systems of security (NATO and EETO) could be fused into one." This organization, he observed, would be "particularly useful in case ... Germany does not remain in the Western European Union".

6. President Eisenhower spoke in general terms of the need to "take account of the legitimate security interests of all concerned", including the Soviet Union, and directed attention to the safeguards contained in the Paris Agreements, adding that the United States was "quite ready to consider further reciprocal safeguards which are reasonable and practical and compatible with the security of all concerned". However, he did not commit himself to more specific proposals, though he of course agreed to the definition of the problem in the final directive to Foreign Ministers.

7. The initial Soviet reaction to the proposals of Sir Anthony Eden and Premier Faure was disappointing. Although promising their proposals close attention, Premier Bulganin made it clear on the second day of the conference that the Soviet Union had no need of a system of mutual guarantees; in fact he implied that it was almost insulting to a strong power to be offered such guarantees. However, he showed much more interest in Sir Anthony Eden's proposals when they discussed them in private and at the end of the conference he produced a proposal for an East-West treaty which is not far removed, on the face of it, from the combined suggestions which Sir Anthony Eden and Premier Faure had made in their opening statements. Premier Bulganin's proposal of July 21 (submitted under the heading of European Security) suggests that the Four Powers sponsor a European Non-Aggression Pact to be concluded between the states party to NATO and the states party to the Warsaw Treaty. This pact would be based on two principles:

(a) An undertaking "not to use armed force against one another" without prejudice to "the right of states to individual or collective self-defence";

(b) An undertaking to consult in case of differences or disputes which might present a threat to peace in Europe.

The proposed treaty would be temporary, pending the establishment of a collective security system for Europe.

8. This stopgap Soviet proposal for European security should presumably be interpreted as supplementing the first phase of the two-stage programme proposed by Premier Bulganin in his opening statement. The first phase he defined as a stand-still agreement not to increase the number of foreign forces in Europe under either European or EETO arrangements. In the second stage outlined by Premier Bulganin the states party to both NATO and EETO would simultaneously terminate their respective treaty arrangements and establish a European collective security system. The draft European collective security treaty proposed by Premier Bulganin at Geneva to implement the second phase of his programme does not differ in any important respect from the text tabled by Mr. Molotov at Berlin in February 1954.⁸³

9. Although the second phase of the Soviet programme remained as unacceptable to the Western delegations as it had been at Berlin, Premier Faure and to a lesser extent Sir Anthony Eden, expressed some cautious interest in the Soviet first phase, involving an East-West non-aggression pact and an undertaking not to increase the level of foreign forces in Europe under either NATO or EETO. Had there been the slightest indication of a change in the Soviet position as regards German reunification, there might have been greater difficulty in maintaining a unified Western front on the question of the organization of European security. As it was, however, there was no problem, for the U.S.S.R. not only called for the "complete termination" of NATO in the second phase but in the first phase would have perpetuated both the division of Germany and the régimes of Eastern Europe.

10. When the four Foreign Ministers reassemble in Geneva in October, Chancellor Adenauer will probably have been to Moscow (though he is now thinking of sending Foreign Minister von Brentano in his place if all the Russians want to discuss is establishing diplomatic relations). We may then have a better idea of whether the U.S.S.R. is prepared to move on German reunification. Although this seems improbable at the present time, nevertheless the framework for a negotiated agreement combining German reunification and European security has been set up at Geneva whenever it proves possible to utilize it. As Sir Anthony Eden seemed to be hinting in the closing session of the conference when he pressed the Russians to agree to discuss the two issues "simultaneously", it might not be impossible to combine the safeguards suggested by him with a "freeze" of all foreign forces in Europe and mutual guarantees between the two blocs, provided that steps to reunify Germany through free elections were fitted into the timetable for implementing a European security agreement.

11. On one central point, however, Sir Anthony Eden's proposals are not quite clear. He seems in fact to be suggesting that, at least as an interim measure, Germany should for military purposes remain divided even after it had been politically reunified under an all-German Government. I do not see how else to interpret the second proposal of his opening statement when he said "we would be ready to discuss and try to reach agreement as to the total of forces and armaments of each side in Germany and the countries neighbouring Germany" with reciprocal supervision in which a unified Germany would participate with the Big Four. This inference is also strengthened by Sir Anthony Eden's further suggestion of a demilitarized zone or of reciprocal inspection privileges within a specified area on either side of the East-West line.

12. Before the Foreign Ministers resume their work at Geneva, a great deal will obviously have to be done among the Western powers to achieve better co-ordination of their proposals than was evident at the summit conference. M. Faure seems to have been as much shocked by the United Kingdom's proposal of a demilitarized zone combined with Locarno-type guarantees as were President Eisenhower and Sir Anthony Eden by the French Premier's suggestion of budgetary controls as a solution to the problem of disarmament inspection. However, if the Western delegations had confined themselves to suggestions on which they could all have agreed in advance, there would now be much less material for continuing negotiations.