283 Department of External Affairs to Beasley

Cablegram 2181, CANBERRA, 18 June 1948, 5.45 a.m.

TOP SECRET

Ref Q Nos. 122 and 121.

It is apparent that United Kingdom now regard co-operation with Russia over Germany as impossible unless there is change in 'basic principles' of Russia's policy. Presumably United Kingdom has fully considered future implications of this impasse. Apart from our disagreement with United Kingdom over possibility of co-operation with Russia[1], we have some doubts as to the practical effectiveness of the steps they now contemplate as result of the tripartite talks. In particular we feel that a government of Western Germany may not have adequate support from the Germans themselves if there is no chance of the division of Germany which such a government will confirm being brought to an end in the foreseeable future. We would also like your assessment of the probable Russian reaction once it appears likely that the three power recommendations will be put into effect (i.e. if the French approve).

The situation is all the more serious in that it may be used by the Russians to good propaganda effect. In closing the door to Russian co-operation, the Western powers have made little attempt to clear themselves from the charge that it is they who are responsible for dividing Germany. Absence of four power agreement on currency reform and decision to hold reparation deliveries to Russia will also be used as evidence in support of the same charge.

It seems essential that the western powers should take stock of where their present actions are leading, and of the consequences of closing the door on Russian co-operation.

[1] See Document 313.

[AA : A1838, 29/2/3/7, II]