Draft section dealing with Germany was laid before Co-operation Committee yesterday. Draft stressed importance of German rehabilitation to Western European prosperity and recommended 'substantial increase' in German output. It also referred, however, to reparations and necessity of control of German recovery, and said that Germany's economy must not develop to the detriment of other countries as in the past, and that Germany must not be allowed to become again a danger to European security. The Swedish delegate announced his intention of abstaining from the discussion and I made similar reservation. The Swiss delegate followed and disassociated himself from the political references in the draft. The Chairman appealed to the three delegates not to press the reservations on the final report.

I propose to keep in touch with Swedish and Swiss colleagues and endeavour to preserve joint action with them. I think it would be better for formal neutrals to maintain reservation on any strongly political references to Germany in final report, but if Sweden and Switzerland decide against I don't think we should do so alone. Turkey and Portugal are no good in this matter.

Please instruct urgently.

Mr. Cremin:
I read the Secretary's message to the Taoiseach and he asked that the following reply should be telephoned:

He approves of the action of the Secretary so far. We should disassociate ourselves from any political references in the final report even if we stand alone in doing so. We should however let the Swiss & Swedish delegates know in advance that this is our intention as knowledge of our intention may strengthen them in their present stand & induce them to keep with us on the final report.

The Taoiseach would leave to the Secretary's own judgment the actual wording of our reservation. He suggests a statement to the effect that, as a neutral country, we feel that we ought not to associate ourselves with the political references in the report - but he leaves the choice of words to the Secretary.