SQUABBLE IN EUROPE OVER SHARING OF MARSHALL AID

Grey River Argus, 22 August 1949, Page 5

SQUABBLE IN EUROPE OVER SHARING OF MARSHALL AID

Britain Wants £370 Millions, Not £212 (N.Z.P.A.—REUTER CABLE) (Rec. 9.5). PARIS, August 20. After meeting for an hour, the Governing Council of the Organisation for European Economic Cooperation, instructed its chairman, Baron Snoy (Belgium) and its sec-retary-general, M. Robert Marjolin, to study and recommend suggestions for the division of Marshall Aid. The proposal was made by France, who was supported by Great Britain. This was after dissatisfaction among Council members with the Programme Committee’s working party report had produced a deadlock. The chairman and the secretary-general were instructed to maintain contact with the individual delegates while studying technical comments in efforts to solve the problem of the division of the American help. BRITAIN WANTS £375,000,000 STERLING Sir Edmund Hall-Patch (Britain) told the Governing Council Britain could not accept the dollar aid fig" ure, which was believed to be £212,500,000. proposed as Britain’s share of the second year of the European Recovery Programme. This is the figure believed to be recommended in a two hundred-page report drawn up after four weeks’ “searching” by the six-nation Working Group. The report will be considered by the Governing Council to-day. Britain requested £375,000,000. Sir Edmund headed the British delegation. He said he would not accept the Technical Group’s estimate of Britain’s dollar deficit as valid. He said the estimate was not consistent with facts, and it was not on a comparable basis with the treatment of other national programmes. Signor Attillio Cattani (Italy) said he was also dissatisfied with the recommendations submitted in the report.

The report is believed to recommend cuts in several countries’ “wants” for 1949-50. According to usually reliable resources, there will be extra aid for Norway and Turkey. Portugal received no dollars last I year. She might get £7,500,000 next year. The assessment for Western Germany is understood to have been complicated by uncertainty about •the amount likely to be available under occupational Government aid and relief schemes. Sir Edmund Hall-Fatch told the Council the Working Group’s report was not an agreed document. “It is a document which contains a collection of figures, but these do not purport to be joint recommendations”, he said. A British delegation spokesman said later: “We do not expect that Britain’s whole dollar deficit will be covered by Marshall Aid”. BUYERS’ MARKET HITS ARGENTINA BUENOS AIRES, Aug 2u. Some observers here said Argentine, migiu need to devalue tne peso V, compete in foreign trade. The gold and foreign reserves were down to oelow 2,uu0,0i)0,000 pesos (about £100,000,uuu?, comparea with more chan £lzl,00u,00i) in Decenwer oi iasc year.

In 1946 Argentina’s reserves weie at an all-time peak and must have seemed to some limitless. it is said the Angio-Argentine meat pact wnl put new life into the nation’s economy, but is not expecteu to be enough in iuelf. Foreigners say that when the sellers’ market dried up. Argentina exports headed into an alarming decline. Before the brake could be applied, the gold and currency reserves evaporated quickly. The Central Bank defaulted on commitments running into several hundred million sterling. Inflation, breaking to a gallop, led to widespread labour unrest, smothered by still turther wage increases. The stock market crashed and Senoi Miranda (Finance Minister) resigned. For three years the nation has been on a spending spree, involving industrialising the predominantly agricultural country, increasing wages, shortening working hours, raising pensions and food subsidies. Argentina aimed to pass on the resultant inflation to her foreign cus; turners by charging in the sellers market what some openly complained were extortionate prices for promunicipal and federal authorities started spending money in a fashion which brought repeated charges of extravagance ana created a* wide range of new taxes to fin<mce the spending spree. It was obviously based on the supposition that the world sellers’ market would be maintained, thus enabling Argentina to balance through the large volume of exports at high prices her enormous I investment in her newly-proclaimed "economic independence . The independent newspapers and statements issued by business and farmer organisations put major emphasis on drastic cuts in Government expenditure as the first step on a long road of disinflation and then lower production costs through stabilisation of wages and the elimination of labour unrest.