declassified e.o. 12958, as amended june 19, 2008 airgram · leadership. upon succeeding the...

DEPARTMENT OF STATEAIRGRAM

TO : Department of State

INFO : BELGRADE, BONN, BUCHAREST, BUDAPEST, LONDON,MOSCOW, MUNICH, US MISSION NATO BRUSSELS, PARIS,PRAGUE, SOFIA, WARSAW, CINCEUR FOR POLAD,CINCUSAF FOR POLAD, CINCUSAREUR FOR POLAD,USELMLO/Casteau

FROM : US Mission BERLIN DATE: January 1973

SUBJECT : Annual Policy Assessment for GDR

REF : 11 FAM 212.3-5CA 5400 of November 17, 1965Berlin A-018 of January 25, 1972Berlin 0012

NO FOREIGN DISSEMINATION

I. Introduction and Summary

As 1973 begins, the GDR is on the threshhold of a newstage in its development. After a quarter century ofinternational ostracism, it is now virtually a fullyaccepted member of the world community. It has beenformally acknowledged by the FRG as an equal. It isa full participant in the ongoing preparatory talksfor a CSCE, and will have the same status in theprospective MBFR discussions. It has been granted aseat in UNESCO and on the observer bench at the UN.Virtually universal diplomatic recognition is amatter of months, as is full membership in the UnitedNations.

The GDR's newly-acquired international stature, inpart a by-product of East-West detente, and moreparticularly FRG-USSR rapprochement, is also attributable to the pragmatism of the present East German

DeclassifiedA/ISS/IPS, Department of State

E.O. 12958, as amendedJune 19, 2008

leadership. Upon succeeding the failing Ulbricht in early1971, Ho ecker shrewdly took the pulse of political change.He was are that for the GDR there was no alternative butto follow the thrust of Soviet Western policy, and soughtwhere possible to apply that policy to East German advantage.During 1972, a well-entrenched Honecker presided over theEast German regime's efforts to streamline governmentaloperations, to increase industrial and agricultural production, and to raise the, standard of living of itspopulation. Despite its notable foreign policy successesand its relatively impressive economic accomplishments,the regime remains sensitive to the fact of the GDR'screation as a Soviet-imposed German rump state. It continues,therefore, to attempt to improve its public image as asovereign political entity and to further its internalacceptability by instilling in the East German populationthe sense of a new, separate national identity. Whilethese efforts have been only partly successful, thepsychological impact on the population of internationalacceptance of the GDR should make them more effective.

But, as a full-fledged player on the world stage, forcedto adjust to the intricacies and potential pitfalls ofinternational politics, the GDR will also have to contendwith the weighty political/economic embrace of a

considerably more influential FRG. The most immediate problemstems from the diametrically opposed purposes for whichthe GDR and the FRG concluded the General Relations Treaty(GRT): for the former it is a divider, for the latter alink. To dispel illusions that. the GRT may offer the EastGerman population a shared future with the Federal Republic,the GDR now can be expected to apply "Abgrenzung" withstepped-up vigor. It will seek to remove vestiges oftraditional ties between the two Germanies. It will alsoapply administrative measures to restrict a wide range ofpersonal contacts between East and West Germans and thusvitiate some of the concessions it had to make in thisregard. And it will attempt to undercut Brandt's popularityin the GDR by striking hard at Social Democracy and theconvergence theory.

As a key subordinate element in the Soviet power structurein Eastern Europe, the GDR will continue to advance Sovietforeign policy. However, there is always the longer-termpossibility that with some of its major policy objectivesachieved, the GDR will seek new international goals whichmay not square entirely with those of the Soviets.



The GDR will further integrate its economy into CEMA, towhich the bulk of its trade remains committed. With itsnew international ties, however, the GDR can be expectedto try b meet some of its economic requirements byexpanding, within practical limits, its trade with theWest. Additionally, it obviously is prepared to pay apolitical price to retain the distinct economic benefitsof its present trade arrangements with the FRG.

When the U.S. joins the other Allies in establishingrelations with the GDR, presumably some time in 1973, itwill for the first time have a diplomatic presence in bothparts of the truncated Germany. US-GDR relations undoubtedlywill be circumscribed by overriding political/militaryfactors on both sides. But, even within these narrowparameters, there are some possibilities for promotingU.S. interests.

The GDR desire for relations with the U.S. and for afavorable political climate for on-going East-Westactivities should provide the United States with usefulleverage for obtaining a GDR commitment to negotiate onoutstanding bilateral issues. It should also restrain theGDR, at least in the initial stages, from attempting toundermine the Western position in Berlin.

US-GDR trade relations perhaps offer the most likelyimmediate area for progress. While the GDR lacks theeconomic potential to become a major trading partner ofthe U.S., transactions with the GDR could be significantfor individual U.S. firms.

Despite a steady GDR drumbeat of anti-American propaganda,the East Germans display a high degree of positive curiosityabout and interest in the U.S., particularly among theintellectuals and youth.

selective though the regime is certain

to impose restrictions, a elective and flexible U.S.information and exchange program over the long run may beable to influenpe a potentially important segment of EastGerman society.



For the foreseeable future, our political opportunities inthe GDR will be limited. Initial U.S. efforts, therefore,will perforce be concentrated on the normalization ofbilateral relations and the safeguarding of our positionon the status of Berlin. This will also require a cleardivision of responsibilities between the Bonn Embassy, theBerlin Mission and an East Berlin Embassy.

An area where the U.S. could profitably engage the GDR iscooperation on matters of broader international concern,such as environmental protection, etc. The GDR's involvement in such activities eventually could have a positiveinfluence on its policies.

With the foregoing in mind, we propose a relatively modestprogram for our further activities in the GDR. Therecommendations contained in this assessment deal primarilywith ways and means of expanding US-GDR trade and promotingcultural, journalistic and other exchanges, and possibilitiesfor bilateral and multilateral cooperation with the GDR onapolitical issues. They also suggest a delineation of thefunctions of a U.S. Embassy in East Berlin consistent withour position on the special status of the Berlin area.

II. GDR Internal Developments

During the past year, SED First Secretary Erich Honeckerhas consolidated further his position as the man in charge.He has acted with assurance, but without unseemly haste, inpresiding over the revocation of the Ulbricht legacy, 'andhas established his personal primacy with a minimum ofvisible friction and rivalry. He has implanted his styleand precepts on the Party, and proved adept at moving bothmen and policies with effectiveness. His generally colorless image has not prevented him from attaining a degreeof public acceptance in the GDR.

Confronted with increasing bureaucratic sluggishness andproliferation, the Party in 1972 downgraded formally theCouncil of State, vested primary responsibility for policyimplementation in the Council of Ministers, and eliminateda number of bureaucratic sub-groups, primarily in thesprawling economic sector.



To deal with the prevailing public attitude of resignedacceptan c e, the GDR leadership in 1972 intensified itsefforts, to broaden its appeal. Greater latitude was

granted in the arts, although only within the context of"socialist realism." Party propagandists and agitatorsas well as the media were encouraged to concentrate onentertainment value and human needs in their activities.Increased resources were devoted to satisfying the consumer. To enhance the regime's appearance of legitimacy,particular effort was made to instill in the populationa sense of a separate East German pride and identity.Unable to develop a GDR nationalism from. whole cloth, theregime has drawn heavily, and selectively, from Germanhistory. By means of a dialectical interpretation of theGerman past, the GDR seeks to represent itself as theembodiment of the traditional good German values: the evilwas interred with the Third Reich or lives on in the FRG.The success of this effort is questionable. 'While outstanding GDR successes at the Olympic games led to anoutburst of pride and pleasure from the East Germanpopulation, the broader feeling of being "German" is stilldeeply rooted. This feeling notwithstanding, large segmentsof East German society are developing vested interests inthe continuation of the GDR.

The GDR appears on balance to have met its 1972 economicgoals. However, their quantitative fulfillment wasfrequently at the cost of quality. In view of the GDR'spersistent and severe labor shortages, the GDR recognizesthat increased output requires higher productivity and amore efficient utilization of resources. This will callfor the modernization of industry, application of bettermanagerial techniques, and improved technology. Whetherthese requirements can be met within the framework of ahighly centralized, state-operated economy is moot. Whileits intensified integration in CEMA is to a large extentpolitically motivated, the GDR also hopes to supplementdomestic production through cooperation and specializationprojects with its CEMA partners. But it recognizes thatit 'will have to expand its trade with the West as well,even if by so doing it incurs a larger trade deficit.



III. GDR-FRG Relations

The GDR is now in the process of settling into its newrelationship with the FRG. In particular, it has to copewith the diametrically opposed conceptions of the GeneralRelations Treaty: the GDR views it as a license forseparateness, while the FRG hopes it will forge links forsome form of combined German future. The GDR consequentlyis intensifying its "Abgrenzung" campaign, determined tocut es many traditional, national, political, and culturalties with the FRG as possible to disabuse all of notionsthat the two Germanies have a shared future. In practicalterms, it is attempting to vitiate the visit and travelprovisions of the Quadripartite and inner-German agreementsby administrative restrictions on some parts of the population and stepped-up indoctrination and vigilance campaignsgenerally. it is attempting to undercut the personalpopularity Chancellor Brandt has gained among the EastGermans. It is also striking hard at Social Democracy ingeneral and at the convergence theory in particular.

Internationally, the GDR will seek to elude the weightyembrace of the FRG. Inasmuch as it cannot match WestGermany's economic and political clout in internationalcouncils, it probably will concentrate on establishing itsseparate German identity as a loyal, committed member ofthe Socialist camp. At the same time, the GDR will seekto gain leverage in multilateral negotiations from the FRG'sdesire for an inner-German link.

Trade presumably will continue to be an important bondbetween the FRG and the GDR. In 1973, this trade is likelyto expand in line with the GDR's overall trade, or byabout eight to twelve percent. The FRG probably will remainthe GDR's second largest trading partner (after the USSR),with about ten percent of the GDR's total trade. However,the GDR will continue to be a relatively minor tradingpartner of the FRG, accounting for less than two percentof the latter's total trade. The current preferentialtrading arrangement entails some political compromises forthe GDR and economic sacrifices for the FRG. Yet both weresufficiently interested in its continuation to includeit specifically in a supplement to the GRT. This mutualinterest will presumably continue beyond 1975, when thecurrent swing credit arrangement expires.



IV. OR Relations with the USSR and Eastern Euro.e

The constant in Soviet-GDR relations is that the GDR isan essential component of the Soviet power structure inEastern Europe. Even wider international acceptance ofthe GDR, therefore, should not cause the Soviets to relaxtheir control over the GDR. Rather, such acceptanceprobably will be regarded by the USSR as acknowledgmentof its continued hegemony. in the GDR and the Warsaw Pactarea in general.

The GDR, in turn, depends on the USSR as the guarantorof its existence. Its fundamental attitude, characterizedby this dependence, can be expected to remain unchangedfor some time, even though the GDR on occasion hasattempted to take advantage of its importance to theWarsaw Pact to extract more favorable consideration fromthe USSR, especially in the economic area. Internationalrecognition of the GDR, despite its benefits to the GDRand the USSR, may introduce a new, and potentially troublesome, element in their relations. As the GDR developsinto a fuller partner with respectable internationalcredentials, it should gain a greater sense of security.In the long term, it could become more assertive with itsallies, including the USSR. It may, for example, insiston a fairer distribution of the economic costs and benefitsinvolved in the CEMA integration process.

An important but intractable factor in GDR-Soviet relationswill be the further course of Soviet policy towards theFRG. Although Soviet and GDR interests in Central Europe,as elsewhere, largely coincide, broader Soviet objectivescould require of the GDR, as they did in, the recent past,certain concessions and restraints not entirely to theGDR's liking. And there will be continuing GDR concern lestthe Soviet contribution to the FRG's political statureserve to promote a divided allegiance among the EastGerman population.

While the GDR presumably will attempt to diversify itsforeign trade markets, the Soviet Union almost certainlywill remain its main trading partner. It will have tomaintain its extensive deliveries of finished products in



exchange for Soviet raw materials. In other areas ofeconomic cooperation, such as research and development, itwill also have to remain responsive to Soviet requirements.This could be a source of friction between them.

In Eastern Europe, the newly legitimized GDR will no longerbe able to expect special consideration from its WarsawPact allies. Moreover, as the FRG expands its relationsin that area, the GDR will have to reckon with an economicallysuperior competitor for the "good" German image. Forreasons of both internal and foreign policy, it will probablycontinue to develop closer political, economic and culturallinks with its immediate Eastern neighbors, Poland andCzechoslovakia. The opening of GDR borders for visa-freetravel to and from these countries was part of such aneffort. The difficulties resulting from that move revealedthe problems involved in integrating disparately developedeconomies. But the GDR, in line with the CEMA "ComplexProgram," is likely to increase the number of bilateralarrangements within that organization intended to developnew products, joint productive capacity, etc. In so doing,it will also seek to alleviate as far as possible its manpower problem.

V. The GDR and the Third World

Because GDR funds and personnel are limited, the GDR probablywill become more selective in its attention to developingcountries, now that it has established diplomatic relationswith countries more important to it.

The proportion of trade with the developing countries,therefore, is likely to remain small. Favorable terms,such as concessional credit, earlier granted as price forrecognition, will diminish.. At the same time, the GDRprobably will continue to offer economic aid in support ofSoviet objectives in certain areas, such as the Middle East.GDR footholds established in the more important lessdeveloped countries, such as India and Chile, will not berelinquished.



VI. US-GDR

The U.S. presumably will join the other Allies inestablishing relations with the GDR some time in 1973. Forthe first time since the division of Germany, this willprovide it with diplomatic presence, and the potential fordirected influence, in both parts of the area covered bythe Four Power rights and responsibilities.

However, several factors will serve to circumscribe ourrelations with the .GDR. U.S. policy toward the GDR musttake account of the paramount importance of our relationship with the FRG. It must also protect our basicinterests in Berlin. As regards the GDR, it remains anintegral part of the Soviet Union's Eastern Europeanempire, with its major interests coinciding with, and itspolicies subordinate to, those of the Soviet Union. Italmost certainly will regard the U.S. as a supporter ofspecial FRG aspirations concerning the future of Germany.

At this juncture the GDR seems sufficiently interested inestablishing relations with the U.S. to refrain fromencroaching upon our legal position on Germany and Berlin,as well as related procedures and practices. It may also be relatively forthcoming as regards U.S. pre-conditionsfor the establishment of relations, including a commitmentto negotiate at a later date on such bilateral issues asclaims', restitution, and consular matters. The GDR'slater general attitude may reflect its own and Sovietdesire to maintain a favorable atmosphere for such negotiations as a CSCE. Nevertheless, the possibility of theGDR's attempting even in the early stage, and especiallyfollowing its entry.into the UN, gradually to alter existingAllied practices in Berlin cannot be excluded. Grantedthat the Allies for their part may wish over a period tomake modifications in those-practices, it is essentialthat in doing so the Allies avoid giving the impressionthat they are 'renegotiating such rights with the GDR.Otherwise, the basis of these rights would appear to have been changed from an original to a contractual one.

Even if the GDR were to make a general commitment tonegotiate on claims and restitution, a satisfactory resolution is likely to be difficult to achieve. Thus, far. theGDR has maintained that it is not a successor state to the



Third Reich and has refused, therefore, to accept any waror pre-war claims. Should it be pressed on the' issue,however, it may counter by advancing claims of its own toformer Reich assets. As regards claims to assets lost byU.S. citizens since creation of the GDR, the East Germansmay be somewhat more forthcoming in order to qualify forbetter trading conditions. However, the GDR clearly lacksresources to satisfy all claims which a number of countriesapparently plan to raise. It' may also seek to applypolitical criteria to claimants of German origin.

Trade is perhaps the most promising area for early progressin US-GDR relations. Thus far, this trade has been mostmodest--a fraction of one percent of each country's tradeand the potential for its expansion is minor in terms ofour over-all trade volume. However, it could becomesignificant for individual U.S. companies or industries.Neither the GDR's commitment to the USSR and CEMA, nor itsarrangements with the FRG pose insurmountable hurdles.Since the GDR apparently is interested in expanding andsomewhat diversifying its trade, this should make anincreased share of the GDR market available to the U.S.This could be especially true for those U.S. productsgenerally unavailable elsewhere. This development can befacilitated by expanding informal channels of communicationswith the GDR and by reducing unilaterally some of thecurrent obstacles to such trade: The GDR now enjoys agood credit reputation, and U.S. measures to promote tradewith it would serve not only our economic but over thelonger term our political purposes as well.

The East German regime's lack of confidence in the allegienceof its' population will make it particularly sensitive aboutU.S. information activities in the GDR. Despite a steadydrumbeat of anti-American propaganda, however, the populationgenerally seems to harbor no animosity toward the UnitedStates and has been according visiting Americans courteousand even friendly treatment. Especially among the youthand intellectuals , the high degree of personal curiosityabout and interest in the United States offers someopportunity for reaching a potentially important segmentof the East German population. The GDR probably will wantto have a highly controlled exchange program with emphasis



on arrangements that would best serve its own purposes--collecting scientific and technological information,propagandizing, and earning hard currency. But even so,an exchange program could be turned to United Statesadvantage. Therefore, it would be in the U.S. interestnot to insist on strict numerical reciprocity but ratherto adopt a flexible approach providing for as many GDRvisitors as feasible.

In the immediate future, our political objectives in theGDR will remain, to a large extent, a function of ourrelationship with the USSR in the broader East-West context.Our initial efforts in the GDR will have to be aimedprimarily at the resolution of outstanding bilateral issuesand at defining our relationship with the GDR in such away as to inhibit the East Germans from encroaching uponquadripartite rights and responsibilities. This will alsorequire drawing clear lines of authority between theEmbassy in Bonn and the U.S. Mission in Berlin on the onehand, and the Embassy in East Berlin on the other. As arule, the Embassy in East Berlin presumably would confineitself to US/GDR bilateral-relations, with Embassy Bonnand the Berlin Mission handling quadripartite matters withthe Allies and the Soviets.

The U.S. could profitably cooperate with the GDR onmatters of broader international concern, such asenvironmental protection, conservation of fisheries, etc.The GDR's involvement in such activities eventually couldhave a positive influence on its policies.

Some ground work has already been laid for, our futureoperations in the GDR. A number of informal contacts havebeen established with GDR academic and official circles.Channels of communication for exploring US/GDR tradepossibilities are being expanded.. Discussions have beeninitiated about facilitating activities by U.S. journalistsand assistance has been provided to GDR and U.S. academicinstitutions interested 'in exchanges.

The following recommendations are designed to build uponthese efforts both before and after the establishment ofrelations.



VII. Recommendations

A. Pride to Establishment of Relations

The Mission should continue to develop and maintainan appropriate range of contacts in the GDR, particularlywith a view to exploiting more fully the potential of theGDR as a trading partner. Also, U.S. trade with the GDRshould be facilitated, if necessary, through unilateralsteps to lower some of the existing trade barriers, forexample by eliminating controls on exports to the GDR beyondthose applicable to other EE countries.

2. Non-governmental academic and cultural exchangesbetween the U.S. and the GDR should be expanded.

3. Efforts to gain or improve access for U.S.journalists covering the GDR should be intensified.

B. Following Establishment of Relations

1. A clear division of responsibility should be madebetween a U.S. Embassy to the GDR on the one hand, and theU.S. Embassy Bonn and the U.S. Mission Berlin, on the other,to assure that quadripartite rights and responsibilitiesare not in anyway undermined.

2. With satisfactory resolution of such bilateralissues as claims, restitution, etc. , consideration shouldbe given to negotiating a trade agreement with the GDR whichwould place American business on as equal a footing aspossible with its Western (non-German) and Japanese competitors.

3. A modest program of informational, education,scientific and cultural exchanges designed to give EastGermans a better understanding of the U.S. and its policiesshould be undertaken.

4. GDR cooperation, both bilateral and multilateral,in such areas of presumed mutual interest as environmentalprotection, health, conservation, narcotics control, etc.,should be. sought.

5. Pending negotiation of a consular convention, GDRassurances should be obtained as regards the protectionand welfare of American citizens.



6. wring the initial stages of relations with theGDR, existing Allied practices in. Berlin and on accessroutes 4hould be steadfastly maintained, even in face ofpossible GDR challenges. In the longer term, the Alliesshould, determine which of those practices are absolutelyessential and which could be modified for broader politicalpurposes. However, in making any modifications, theAllies must avoid appearing to renegotiate Allied rightswith the GDR and thus transform the basis for thoserights from the original to a contractual one.

[signed]KLEIN



declassified e.o. 12958, as amended june 19, 2008 airgram · leadership. upon succeeding the...

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