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Tbe political authority of West German Chancellor LudVig Erhard hat been weakened In recent acntfcs. He has Buffered en Important electoralltloua olalayanta to his mantle bore grevn bolder, and the view that he lacka the qualitiesational leader seeae more widely held In Germany. Be vill be severely tried by tbe problems of defenae policy now at Issue In Genesn-American relatione. In particular the matter of offset payments. If Otrman opinion concludee that he baa not effectively upheld German Interests, thewhich favor acme alternative to the hitherto close dependence on tbe OS in foreign and defense policy are likely to gain In strength.
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This mcDoranduD has been produced solely by CIA. It was prepared by the Office of National Estimates and coordinated with the Office of Current Intelligence.
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Shedepaupr Christian Union. On!lie the Social Democratic Party (SPD) withightly disciplined, dues-paying oecbers, the Christian unionn aggregate ofpoliticalhich bar* found refuge within Its lll-deflned Ideological borders. Por many years, the often conflicting viewpoints of these eleaents coalescedorkabla consensus around the person of Konrad Adenauer. His departure from the Chancellery3 let an unflliable gap, and there has been no successor in view capable as he was of capping the deep well of lntro-party dissent. Erhard, who came to office ever the objections of his predecessor and has had to suffer sporadic haresGsient from him ever sines, is widely regarded ao an interim leader. Be presides over an increasingly fractious party which now appears more preoccupied with searching for his successor than with affording him the political backing he needs. Its inability toow leader capable of commanding the full support of ths party and the nation tends more than any other factor to preserve Erhard in his position.
rief period after Erhard'a personal victory inelections, lt was thought by some that he might sonage tointo the strong man everyone
was looking for, the portly Siegfried of invincible cigar and "new style administration" who could lead tho party and the nation Into battle ogalnot Germany's manifold problems. But this salable prospect did not last long; the bickering which surrounded the prolonged negotiationsew cabinet destroyed any Illusion that Erhard's resolution bad been Stiffened by his popular mandate. Row that mandate Itself has been weakened by the CDU'a defeat In tho recent North Fhine-WoBtphallan state elections.
3. The forth Phi ne-Westphalia Defeat and Ertard's Hew y'llne mMllty. COT loesss in Korth Rhine -we stphilla sees to have been due primarily to the failure of the governments In Bonn end DuesBeldorf to solve the state's painful economicproblems for which the SPDin opposition In both governmentscould not be held accountable by the voter. Por Erhard, whose reputation as Germany's strongest rote-getter rests almost exclusively on his role as architect of Germany's postwar economic mlraclo, it was particularly damaging that he should be defeated precisely because he had failed to solve the economic problems of Germany's most populous state.
Erhard has managed to keep his sasbltious and
disputatious princelingsor the pest three rears primarily because be vas reputed to be the most popular figure In Germany. That reputation vas sadly tarnished In north Rhine-Westphalia, and lt Is unlikely that coming state elections will
afford him much opportunity to refurbish it.*
Erhard's loss of personal and political prestige renders him far more vulnerable than before to attack by restive elements in the Christian Onion. If ha la to govern effectively, he must seek broader support, must attempt to be more thingse men. Ee will face pressures to "strengthen'* his cabinet by offering representation to dissidents, to seek an accommodation with the Trench, to "stand up" to American demand* for full offset payments ond improvement in Germany's defense posture, to boil out the inefficient and noa-ccapetltive coal and steel Industries, to end inflation without slowing growth still more, to broaden
The most Importact of these state elections are those In Besse and Bavaria. Hesse, like Berlin,raditional SPD strong-bold, and It is unlikely that any meaningful shift towardill occur there. Bavaria, the borne territory of Franz Josef, presents Erhard with somethingeada-you-win,ose situation: should the SPD pick up strength (which isrhard will take much of the blame; should the CSU moke gains, Strauss will take most of tbe credit.
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social legislation, and to find new and acre productivein Ostpolltlk. Much es Erhard night ulsh to resist movement on at least some of these matters, lt la likely that events In the Bundestag thle fall vill amply demonstrate to him that his choice lies between accommodationurther corrosion of his leadership.
* While tbe removalerman Chancellor against bis vill la constitutionally permissible, it haa yet to occur in the short politioal tradition of postwar Germany and is generally held to be virtually impossible in practice. It would require avote of nohe prearranged agreementajority of all members of the Bundestaguccessor.
5. There la already some talk of replacing Erhard In the Chancellery, and while his Involuntary removal is highlya series of policy failures in coming months could bring haraspment Intended to precipitate bis resignation. At this Juncture, however, it appears more likely that Erhard will survive as Chancollor until athen his party will meet to choose9 standard bearer. What might be in danger, however,umber of foreign, defense, and domestic policies which he has managed to follow heretoforeair degree of consistency.
6. Some Changes Idw Eastward. The Erhard-Schroeder prtrolltIk has been cautious and un dramatic, though lt has been deacrlbedpolicy of movement." Aimed et the isolation of East Germany, it emphasizes the dermlcpmant of economle relations with the East European nations, and these hays in fact been growing. The political returns, if any, ofolicy would inevitably be slow in coming. Consequently, the Erhard government's approach to the problem of reunificationuropean settlement is widely held to be at the least
7- The SPD, oo the other hand, boaeries of well-publicized "little steps" designed to bring Germans from east and west together. It Is doubtful that these "little steps" (Berlin pass agreements, the abortive but politically lucrative speakers exchange negotiations, the visits of retired people, and so forth) make any contribution to the eventual solution of tho reunification problem. Nevertheless, the psychological effect on the German voter has probably been of significant help to the SPD, and many members of the Christian Dhlon are likely to demand similar new initiatives from their own
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8. At tbe same time, and for quite differentome West German business interests are likely to call for an even greater expansion in East-West tradeasis vhicb includes East Germany and contemplates the extension of credit to Pankow. ombination of economic and Internal political pressures may bring demands for the replacement of the Schroeder policy of Isolating East Germanyolicy of Increased cultural and economic intercourse with the East Germans. Along with this there would presumably go onto bo leos rigid In dealing with Eastern Europe in such matters as the Berlin douse and the Hall stein Doctrine.
Some Charges in the View Westward. Ihe problem posed for tho Erhard government by Prance's defection from NATO is formidable. German defense policy is completely dependent on NATO; tremors in the Council of Ministers meetings hove long produced major quakes in Bonn. While "Gaullists" and "Atlanticists" hoveitched battle in the German press, Erhardif not always hla Foreign Ministeras seemed to embrace Bundestag President Eugon Gerstenmeler's theory of an elliptical alliance with two centers, Paris and Washington, insisting (at least in public) that satisfactory defense relatione with both powers were
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essential to Grman Interest*. Inere can be little doubt, however, that the Erhard government has appreciated the vastly greater Importance to German Interests of the Americanwhile at tha sane time being concerned to avoid any expression of choice between tha two powers.
however,bility to ward offa fuller accommodation with Trance has bean weakened. agreement to the principle of continued Frenchin Germany without prior negotiation of thein this direction. There Is widespread feelingthat the OS is preoccupied with Its balance ofand with Southeast Asia, and consequently is placing
e lower priority on European defense. The "OauHlst" ldeae of Franz Josef Strauss, Beinrlch Krone, and Baron von Guttenbergthe notion that In the long run Germany must look to herself and to some European association for her defensemay gather more adherents among Germans who feel they are being unjustly pressured by the Americans to carry more than their fair share of the common defense burden.
overdefensebe heightened by two outstanding problems. The first of
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these, tbe apparent American Initiativeo-exaadnation of the role of the Bundeevehr In Jiaropeen defense, has not yet been clearly defined. To many Germans, however, lt appears that the OS li calling for the shiftajor portion of thaleetonventional ratheruclear role. Whatever the military virtues of this Idea say be, many Germans will eae Iturther repudiation of Germany's claim to an equal role In nuclear defense policy.
12* the second issue likely to strain Geman-Amerlcan relations is tbe offset problem. While it does not eppear at present that the Germans will fall in fulfillingillion obligation under the current agreementumber of factorsrowing unwillingness toimilar obligation for. Among these factors ore legging infrastructure development and personnel shortages which prevent the Bundesvehr's assimilation of hardware procured at tha rote of the recentikely freezeor even dropin the Defense Ministry's procurement budget, and pressure from the growing German armaments Industryreat share (now) in theoillion annual procurement pie. The worldwide German balance of payments remains relatively
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favorable, and Boon could find the dollars to make purchases
5 ouUllon per year over and above normal ccmserclal dealings. Tbe difficulty remains of obtaining Americanto purchases outside the area of military procurement which can be counted as offset. Here again, Erhard'a recent loss of power within his own party is likely to force himore uncompromising position in negotiations for theffset agreement. He has long bean criticizedreature of tbe Americans, and he will probably find it politically essential to insist on an agreement more favorable to Germon interests.
13. One possible solution to the offset problem, of course, is some withdrawal of IB troops In Germany. From the German military point of view, theday stockpile and the extensive support structure Decessary to maintain lt are wasteful and based on an unrealistic estimate of tha probable duration of any land war In Central Europe. However, while German military planners mighteduction In the numbers of these support troops acceptable, the public would react with alarm to any substantial cutback in the gross number of American military personnel in Germany. Fears that Germany was being abandoned by her principal ally would be manifested In for more acute form than
on earlier occasions vhen miner reductions of OS forces occurred. Ambitious politicians vould raise demandseorientation of German defense policy away from dependency on the BS and for an exploration of European alternatives.
trong executive In Germany might do much to diminish these threatening frictions In German-American relations, but
IAt this juncture, any suggestion of worsening relations with the US will serve only to weaken Erhard further and to reduce his ability to seek aof current close German-American cooperation. Should he fail to gain from the Americans some alteration In viewpoint which can be portrayedenuine US concession, should the US continue to Insistercent offset payments forr, for whatever reason, carryubstantial reduction In Seventh Army personnel, the blow to Erhard's political prestige would be serious, and he might find himself Increasingly beset by those vbouropean solution to Europe'sand Germany'"problems.
1?. Despite the many pressures for change In Bonn, it Is unlikely that major shifts in policy will come in the next few
months. Orer the short range, Erhard will undoubtedly try very hard to preserve the programs and concepts of the past three years of his administration, and lt will take time for his opponents to marshal their forces. Altogether, however, the combination of his weakened leadership and the political and econoolc pressures that will bear on the German-Americanover the next few years makes lt seem likelyroubled course Is In prospect. The result in Germany will probablyendency to examine more closely the alternatives to the close dependence on the US which has been at the center of Bonn's foreign and defense policies for nearly two decades.
FOR THE BOABD OF RATIONAL ESTIMATES:
AHcVJi' cMlTU Acting
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