flednesday Dec 2 131 1959 '57 BACKGROUND Reconstruction of hour long talk tonight by Macmillan at Downing Street with about 15 London-based American specials Conversation opened on domestic politics Macmillan feeling extremely self-satisfied over election Doesn't think Labor Party will be gutted by present Innis soul-searching Thought Gaitskell did extremely courageous Job of trying to modernize party though Macmillan claims he if trying same would have chosen more direct approach of political never would have let Bevan be in windup position Thinks bor Party will accomplish transition to tempering socialism withoutn greet internal damage noted with smile that Conservative Party without written_constitution is frequently in history has done about face on its policies While Britain now doing very well with prosperity would be mistake to realize she walks a fine wire Britain doesn't basically have a strong economy and cannot have She is dependent on trade and conditions of trade and while she must export to live her customers don't have to buy from her for them to live Increased US bank rate and German trade pressure now putting a 3 bit of squeeze on her and British reserves will now dip but outlook still good Too early to tell what can come out of Common Market-Outer Seven collision Hope will be limited Britain opposes this kind of bloc action acted out of self-protection Now future might bring Latin American trade bloc etc All this not too bad if overall trend is trade liberalization despite movement by bloc action But if real collision develops repercussions will be great Germany is Britain s real trade rival If peeple of Britain see Germany cutting Britain's economic throat they will say why should we keep 55 thousand tram troops in Europe Let's pull them out and_ let Europe defend itself As for-U S America now paying price of success of her postwar policies in Western European reconstruction But with U S resources and power she really should not be I uneasy U S has been able to get by in world trade with very high wages because her technology was so much more advanced than others Now that edge is slipping What are U S choices Protectionism or free trade If it chooses protectionism it will be underwriting high costs and running counter to world trends Its real choice should be free trade stirring competition for that's where the world trade struggle should be fought for the best interests of all - Domestically Macmillan indicated mating nothing dramatic in store for British policy Said real problem is that in 20 years one-third of Britain's pOpulation will be in school probably to age of 18 one-third of its population the aged will be resting for the last 20 years of its life and remaining three-fifths must support the whole nation Eacmillan - 2 International - Macmillan sees likely Summit date in April the week after holy week Thinks it would be great mistake_to waste time fighting over agenda nhixx which tepics should be in what order etc Prefers simply listing topics which could be discussed at Sumnit with Russians such as disarmament Germany and Berlin aid to underdeveloped countries if anyone wants that on and so forth 7 - Macmillan indicated no specific thinking about what will be done at Western Summit at Paris in DeCember if Implied he had no expectation it should be troublesome at all Bays everyone agreed there will be an EastAWest summit and pretty well agreed it should be first in series of Summits spread 2 over years ' Asked if he did not anticipate trouble with Rn aniin deGaulle call for summit as confrontation on global issues intended to resolve major policies Macmillan had to be reminded-what that was If the Summit is going to get into such wide issues-as Asian and African policy said Macmillan then probably other powers outside the Western Big 21h Three would-demand a voice in it The only authority Western Big Three have for trying to ease tensions at a Summit he said is the Potsdam Declaration Therefore -can't see how a Summit meeting could be held and make progress on more than one or two points As for de Gaulle's views on Nate if de Gaulle's Opposition to Nato integration was based on argument it couldn t fight a battle as an integrated organization well he might have something there Nato couldn't do much fighting effectiVely In the last war integrationoworked because it was really only Anglo-American integration at the top and they think enough like to be able to get on together other units were simply attached to them The #1215 trouble with Nate is that when you set up an organization like that it tries to reach out for things to do in In a continually expanding way -The gunman permanent ambassadors to Nato have to find things to keep themselves-busy and get excited about all kinds of things He hasn t found that the prime ministers of the 11p respective countries worry too much about such things As for Spaak well he is a very energetic fellow Spoken Nato has three purposes First is to hold the fifteen countries itogether Second to keep the New Hark and Canada committed to Europe ' Only thirdly there is the Nato role of defense A war would be a nuclear war Natos forces would only-be fighting a few days Certain things have to be integrated nah such as radar But small countries particularly 11 try to carry integration to extremes because it mean means more jobs-and stature for them You wind up with-several men doing the job of one As for European policy in general there are Certain underlying fundamentals France can never permit German reunification Britain's real political interests have much in harmony with France's the implication was not overly subtle lfv acmillan 4 5 1 De Gaulle has no interest in a United States of Europe he is no Monnet or Schuman and knows little about economics De Gaulle wants a strong powerful France imminent dominating Western Europe He also wants Germany fully tied to he West and here French and German interests concur most Britain can take a strong France and a politically flabby Germany But a strong Germany and a politically flabby France-is not in Britain's interest No one wants to encourage anything which will encourage the militaristic tendencies latent in the Germans The Germans still the heel-clicking discipline of the past You could see that in Adenauer's recent visit Everybody heel-clicks around him even when they know what he is saying is utter rot They are happy when someone else tells him so but wouldn't edare themselves Adenauer has all the strings there is no second man in sight As long as Adenauer lives he can handle the German situation But he is a very old man-although still an extremely active one A Tartar really a strange old face We got along pretty well But what happens after has 0n Ike's tour it is a good thing it will show people he is still quite active and able and that America is outward looking that is important As for the East4West future if we get a detente it is going to make it more difficult to hold together our alliances you can see that already We've got 1h this multitude of Organizations in Europe may the reason is you have Certain nations which can only join together in certain things Maybe we could have just one organization with sections Sweden and Switzerland outside of Nate could belong to certain sections or committees and so on old British theme a 12 As for the Russians despite their Sputniks they're really' a half-civilized people They loved to be praised but like children take offense at the slightest criticism They are half Europeans half-Asians we've got to convince them they are Europeans The struggle between communism_and capitalism certainly will go on if there is a detente but it will amount to an agreement to struggle without the threat of military force a Of course if we leave ourselves wide open as a target we might always tempt them to try force When asked if he saw any real prospect of Joint aid to underdeveloped countries said it could be possible if both realized the small people are now blackmailing'both of us telling one side they otherwise will turn Communist and the other side they will turn Capitalist without aid notes were taken during this hour long rambling a a which was more philosophical a than an q On his remarkably frank German- French assessment said that was-off the record But ground rules were background with no suggestion of attribution to anyone All present thought the talk most enlightening as usual-revealing as much abOut the source as what he said Harder cc to Mr Friendly for circulation and to Roberts                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu