ARMS POLICY OF U.S.

Press, Volume LXXXIX, Issue 27036, 11 May 1953, Page 9

ARMS POLICY OF U.S.

French Fear Of Recession (NZ. Press Association—Copyright) (Rec. 8 p.m.) LONDON, May 8. Mr Paul Reynaud, a former French Prime Minister, said in Strassbourg today that if America stopped rearming it would cause an economic recession which would profoundly affect Europe. He was addressing a press conference on the discussions between the Council of Europe and the Committee for Economic Affairs aid delegates from the Organisation for European Economic Co-operation who recently visited America. Mr Reynaud said that the O.E.E.C. mission had found it impossible to expect any American action toward the liberalisation of trade and lower tariff barriers before the end of the year. The delegates were not pessimistic about the easing of American tariffs, but they warned against too high hopes that Europe could export more to the United States. Mr Reynaud said that so long as there was no real change in Soviet policy, United States arms production would continue at the present rate. The production of civilian goods had reached its peak in America, and it was difficult to see how any increase could be absorbed by the population. The Republican Administration was trying very hard to prevent aggravation of the economic situation, but politicians who had been out of power for 20 years could not be expected to make immediate decisions on vital matters. The mission had found some unrest in New York financial circles about the possibility of a recession.