FY 1986 assistance requests for Europe - transcript

It is a pleasure to have this opportunity to speak to you today on behalf of security assistance requirements for the European region in FY 1986. Although the countries of the Atlantic alliance weathered in 1984 a major challenge to their unity, we must ccept the fact that 1985 and future years will bring the additional challenges. Fortuntely, the vast majority of our Europena friends and allies possess the capacity to fulfill their responsibilities and help us meet these challenges without any direct U.S. assistance; a few, however, cannot, and need our help if they are to be able to do their share in safeguarding U.S. and Western interests.

The four allies which do require special assistance are to be found along the nordhern ede of the MEditerranean. These four allies--Spain, Portugal, Greece, and Turkey--constitute much of NATO's southern flank. This region is critical for the defense of the central front and Europe more generally. At the same time, the southern flank is uniquely important for another reason--as a bridge across Europe linking the Atlantic to the Middle East and Southwest Asia. As NATO Foreign and Defense Ministers regularly note, Western interests outside the formal treaty area can and do affect the well-being of every alliance member. The countries of the southern flank, by virtue of their location along major East-West air and sea routes, have the potential to make a special contribution to this increasingly important dimension of Western security. It is U.S. assistance programs which can turn this potential into reality.

But in speaking of what these countries might do in the future, we ought not overlook the accomplishments of the recent past. Each of these four countries has made a difficult but crucial transition toward democracy. Much as I noted last year before this subcommittee, over the past decade several have made important economic strides. Each has negotiated a major base agreement with the United States. And in each and every case, I believe that U.S. security assistance programs have constituted an integral part of this evolution. Our economic and military assistance programs have proven to be an essential foreign policy instrument.

Let me address each of the proposed security assistance programs in turn. I would then like to say a few words about our policy toward Cyprus.

Portugal

A charter member of NATO, Portugal is a long-time, steadfast, and reliable ally of the United States. The Portuguese Government actively supports Western policies in international fora and has been in the forefront of Western reaction to major events such as the invasion of Afghanistan, the proclamation of martial law in Poland, and the taking of the U.S. hostages in Iran. Portugal holds a strategic position of great importance for NATO reinforcement/resupply and other, including non-NATO, contingencies. The Lajes air base is critical to these missions.

Although concerned that expanded U.S. use of their facilities for non-NATO purposes could expose Portugal to increased military and economic risks, Portugal has been highly cooperative in allowing use of its bases, provided that its relatively modest military and economic needs can be taken into account. A new mutual defense agreement signed in December 1983 provides the United States with continued access to the strategic Lajes facilities and reaffirms the strength and vitality of our security relationship. The expanding nature of that relationship is reflected, as well, by Portugal's agreement in March 1984 to installation on the mainland of a U.S. satellite tracking station (GEODSS facility). The facility will be a key part of a global network designed to improve U.S. ability to monitor friendly, as well as potentially hostile, objects in space.

Portugal has come a long way in establishing a working democracy since the 1974 revolution. Portuguese political parties, both in government and in opposition (with the exception of the communists) are pro-Western and agree that Portugal should make a more substantial, active military contribution to NATO. We support Portugal's increased participation in NATO along with other alliance partners and want to help in the long-range Portuguese military modernization effort.

Military modernization has a long way to go, however, since until the 1974 revolution, the Portuguese Armed Forces were largely a colonial force, heavy on foot-soldiers and light on arms. The armed forces have been restructured to more modern proportions, and the process of acquiring modern equipment has begun, in accordance with NATO force goals. It is, nevertheless, clear that Portugal will not be able to bear the burden alone. In recognition of this, we and other NATO partners are cooperating in an ad hoc committee of NATO to coordinate assistance efforts.

Portugal is the least affluent NATO member, after Turkey, and has been experiencing serious economic difficulties. The government has undertaken a painful economic austerity program and in 1984 met or exceeded most of its targets under an International Monetary Fund (IMF) standby program. This, however, has come at the cost of a severe recession. In addition, the country is facing a major adjustment as it prepares to enter the European Community (EC). It is in our best interest to provide substantial levels of economic support fund (ESF) grants to assist the Azores and the mainland economies, and sufficient amounts of military assistance program (MAP) grant assistance and foreign military sales (FMS) to help Portugal achieve NATO readiness and fulfill its obligations in Europe and the Atlantic.

For FY 1986, we have requested an ESF grant of $80 million, a MAP grant of $70 million, and FMS credits of $65 million along with $3 million international military education and training (IMET) funds. In light of Portugal's serious economic problems and its substantial debt service burden, we are requesting that $35 million of our FMS credits come under the concessional FMS category, and we are seeking legislative authority to offer Portugal extended repayment terms for the non-concessional portion of FMS credits. The requested levels of MAP and FMS would help Portugal to acquire equipment to complete the NATO-dedicated brigade and its airlift, start up a second air transportable light infantry brigade, complete a second squadron of A-1P's, commence a three-ship antisubmarine frigate program, and acquire six used P-3B aircraft for Atlantic antisubmarine patrols. IMET will provide professional training for the Portuguese Armed Forces. ESF is intended to provide vital budget support for the economically pressed Azores as well as economic assistance to the mainland.

Spain

Since the death of Franco in 1975, Spain has successfully established a fully functioning democracy, while working to integrate more fully with the West, including joining NATO and soon the EC. In conjunction with a democratic Portugal, Spain's remarkable progress in establishing a free society and in reducing the communists to only a marginal political force has helped to secure NATO's southern flank and enhanced alliance strength.

The U.S.-Spanish bilateral security relationship dates back to 1953 and has been confirmed through a series of agreements regarding U..S. use of Spanish military facilities and U.S. assistance for Spanish military modernization. Since Spain's entry into NATO and its peaceful transition to democracy, it has also become an important alliance partner. The basis for our security cooperation has thus been broadened. Modernization of the Spanish military forces, which strengthens the common defense as well as encourages an institutional role for the military similar to that played by the military in other Western democracies, has gained new importance. Our security assistance relationship has thus become even more significant.

Following national elections in Spain in 1982, the newly elected socialist government, in the face of considerable popular sentiment against NATO, "froze" the process of military integration into the alliance pending a popular referendum, for which no firm date has been set. The Spanish public clearly evaluates membership and military integration partly in terms of what benefits they offer the Spanish military's modernization effort. While we consider the ultimate decision to be a matter for Spain alone to decide, it is important that our assistance effort make clear the value of NATO participation.

Under the 1983 Agreement on Friendship, Defense, and Cooperation, Spain provides the United States with continued access to vital air and naval facilities which are important to the maintenance of our forces in Europe and would be crucial in the event of a European conflict. The agreement also establishes an institutional framework--the U.S.-Spanish Council and the various committees which operate under its aegis--for the development and implementation of our broad political, economic, cultural, and scientific cooperation with Spain. We, in turn, are pledged to "best efforts" in assisting Spain to upgrade its military equipment, modernize its forces, and bring them up to NATO standards.

At a minimum, it is vital that we maintain our current "best-efforts" commitments for FY 1986, which would be to continue FY 1985 assistance levels of $400 million in FMS credits, and $12 million in ESF grants, and to seek $3 million in IMET. The ESF grant would fund scientific/cultural exchanges and programs designed to counterbalance the large military component of our relations. The IMET program is aimed at the professional development of the Spanish military. FMS guaranteed credits are scheduled to fund the purchase of F-18 aircraft, a frigate construction/purchase program, helicopters to upgrade military airlift and capability, a software test facility, torpedo improvement kits, and ground support weapons.

Greece

Greece is strategically important to the United States and NATO. It borders on three communist countries and would block any Warsaw Pact thrust southward toward the Mediterranean through Thrace as well as joining with Turkey to resist any Soviet effort to seize control of the Dardanelles. At the same time, Greece is positioned to help control the sea- and airlanes of the eastern Mediterranean and is one of the countries controlling access to the Middle East. Without this key ally, NATO's southern flank would be split.

We also consider our defense relationship with Greece to be in the broader context of our traditional friendship. Greece is a friend as well as an ally. We are bound by a web of economic, social, and political ties. As two of a small, select group of nations embracing democracy, we share the defense of our common values through NATO.

Our defense relationship continues to operate within the framework of the defense and economic cooperation agreement which formally came into force in December 1983. This accord provides for the continuation of the activities previously conducted in Greece on a mutually agreeable basis. The agreement is valid until terminated by written notice by either side, which can be given at the end of 5 years or thereafter. This arrangement is comparable to agreements we have with other allies.

Under the new agreement, the operation of our bases and associated facilities during the past year has been relatively smooth. The agreement has eased the handling of previously difficult issues such as U.S. requests for waivers of jurisdiction in cases of U.S. servicemen charged with offenses against Greek civil law. Sixth Fleet ships continue to make regular visits to Greek ports. We have experienced problems, however, when the Greek Government, in our view, has not provided adequate security during strikes of Greek base personnel. Moreover the Greek Government has cast doubt over our future ability to use their facilities by its frequent statements to the effect that American access to the facilities will terminate after the agreement has been in force for 5 years.

Unfortunately the problems we have experienced regarding our facilities in Greece are far from unique. Greece is not participating in NATO exercises. The Greek Government regularly disassociates itself from the NATO consensus on intermediate-range nuclear forces. And the Greek Government not only echoed the proposterous charge that Korean Air Lines #007 was on an espionage mission for the United States but questioned the legitimacy of support for solidarity in Poland.

These and other differences with the policy of the Government of Greece are serious and highly bothersome. We will do our best to improve relations with Greece, but the Greek Government must do its part as well if there is to be progress. In the meantime, I can well understand the frustrations in Congress and elsewhere and the temptation to take punitive measures in return against the current Greek Government. But common interests between the United States and the American people with the people of Greece are too important for us to adopt such a short-term prospective. It is for this reason that our security assistance request for FY 1986 deserves congressional support.

The security assistance we are requesting for Greece is an integral part of our close bilateral defense relationship which includes common membership in NATO as well as U.S. use of military facilities in Greece. U.S. assistance is necessary to improve Greece's capability to carry out its assigned tasks under NATO. Recently, for example, Greece committed itself to purchase 40 U.S. F-16s to help upgrade its air defense system. The Greek percentage of GNP devoted to military expenditures remains among the highest in NATO. Greece, in recent years, has used its own foreign exchange resources as well as U.S. loan guarantees to improve its defense posture. However, U.S. assistance continues to be needed. Like other European allies, Greece suffers from inflation, unemployment, and a balance-of-payments problem. The repayment terms for our military assistance loans to Greece are the best available to any nation under our nonconcessional FMS program.

This year we propose to maintain the level of FMS funds at $500 million as was allocated for FY 1985 to permit continued purchase of military equipment, including aircraft, ammunition and spare parts, communications and radar equipment, and missiles. We also propose $1.75 million for IMET, which is particularly important to the Greek Armed Forces at both the professional and technical levels.

Turkey

Our assistance program for Turkey remains the third largest in the world, reflecting the country's strategic importance and its contribution to the defense of NATO and to deterrence of potential aggression in Southwest Asia. Owing to competing demand on our assistance resources, we are proposing a program for Turkey which is only slightly larger than last year's proposal and which thus falls short of Turkish needs. Nonetheless it is a program that would permit us to continue to assist Turkey with its military modernization programs while it consolidates its democratic institutions and economic reforms.

Let met describe for you briefly the variety of foreign policy and strategic interests the United States shares with Turkey. Turkey plays a critical role as the anchor of the southern flank of NATO. It defends one-third of the border between NATO countries and the Warsaw Pact. It controls egress from the Black Sea into the Mediterranean and stands between the Soviet Union and the Middle East and astride the route of a possible Soviet thrust into Southwest Asia.

The United States has access to a variety of military facilities, including air bases and other installations that contribute directly to our national security, as well as to the defense of NATO. We have signed important military agreements in the past year, including a Co-Located Operating Base Agreement involving improvement of bases in eastern Turkey, where both NATO and Turkey share an interest in maintaining an effective deterrence.

Turkey's close relations with key states in the Middle East enable it to play a unique role in that troubled region. We have an active and productive dialogue with Turkey on Middle East issues, based on our close bilateral relationship and shared interest in regional stability.

Over the past year, Turkey has made major strides in the consolidation of democratic institutions and in the protection of human rights. Municipal elections were held in March 1984, in which all legal political parties participated. Martial law has been progressively lifted from a majority of Turkish provinces. The government of Prime Minister Ozal has taken steps to eliminate abuses in Turkish prisons. Having assisted Turkey during the past, very difficult years, as it struggled to overcome political chaos and economic bankruptcy, it is important we continue to support the newly elected government as it makes notable progress. Security assistance is a fundamental part of that support.

Equally impressive has been Turkey's progress in the economic sphere. With the support of international institutions and Turkey's friends, including the United States, the Turkish Government has embarked on an unprecedented program of economic reform designed to increase the economy's productivity and competitiveness. While results to date have been substantial, the Turkish economy remains fragile and, in the short term, the success of the government's economic policy will require continued external support. This year, repayment of the rescheduled external debt will add to the debt service burden. We are requesting less in ESF assistance to Turkey than in FY 1985, but Turkey's economic difficulties and our interests in Turkey and in the success of the Turkish Government's economic program argue strongly for maintenance of ESF funding at this level.

Turkey maintains the second largest standing military force in the alliance and devotes a higher proportion of its budget and GNP to defense than most other NATO members. However, to enable Turkey to meet its NATO missions, sustained, adequate levels of security assistance will be needed. The Turkish-American defense and economic cooperation agreement commits the U.S. Government to "best efforts" to obtain adequate levels of security assistance for Turkey, a pledge that we and the Turkish Government take very seriously.

Our security assistance request is for $230 million in MAP, $345 million in concessional FMS loans, $210 million in FMS guarantees, $150 million in ESF, and $4 million in IMET funds. The greater portion of these funds will be used for the modernization of the Turkish Armed Forces. Major programs include the F-16 coproduction program, the M-48 tank upgrade, and naval force modernization. These are key programs which will be critical in helping Turkey modernize its armed forces and make its contribution to the security of the alliance. They fall short, however, of enabling Turkey to meet fully its military requirements, derived from its extensive NATO missions.

Security assistance, as Secretary Shultz has stated, is closely linked to our most fundamental foreign policy goals. In this regard, Turkey is a notable success story. Security assistance for Turkey not only furthers U.S. strategic defense and NATO objectives but also provides aid to a country striving for democracy, economic liberalization, and against terrorism. Few countries meet the criteria of our assistance program as fully as Turkey does. I urge congressional approval of the entire Administration request and without conditioning our assistance on Turkish actions on Cyprus. I firmly believe that the progress we have made in recent months on Cyprus would be jeopardized by one-sided, punitive measures directed against Turkey. Turkey played a constructive role leading to the January 17 Cyprus summit and it is important that it continue to do so.

Cyprus

The United States places high value on its excellent relationship with the people and Government of Cyprus. This relationship endures despite periodic differences between us regarding a solution to the continuing partition of the island between Greek and Turkish communities. This Administration places top priority on achieving progress toward a just and lasting Cyprus settlement. We remain totally committed to that goal. A divided Cyprus for us involves a pressing humanitarian issue, weakens allied defenses in a strategically important region, and is one of the principal causes of the tension between two NATO allies--Greece and Turkey.

Thus we have compelling reasons to do all we can to promote a fair and final settlement for the two Cypriot communities. We also oppose measures which obstruct such a settlement. Accordingly, we support UN Security Council Resolution 541, passed November 18, 1983, which calls for reversal of the Turkish Cypriot declaration of statehood. We also strongly opposed the exchange of ambasaddors between Ankara and the self-proclaimed Turkish Cypriot state, which we do not recognize. Currently, we are intensively involved in supporting the UN Secretary General's ongoing efforts to find a solution. Those efforts resulted last fall in a series of "proximity" meetings under the good offices of the UN Secretary General which in turn led to the first summit meeting between the leaders of the two communities in nearly 6 years. Unfortunately the meeting failed to achieve a signed agreement. It did, however, as the Secretary General said, greatly narrow the gap between the sides. We are doing what we can in coordinating with Secretary General Perez de Cuellar and his staff to ensure that the process does move forward and the momentum generated since last August when the "proximity" talks began is not lost.

The $3 million in ESF we have requested for Cyprus as in the past will be applied to the existing Cyprus American scholarship program which provides American university educations to young Cypriots of both communities. Cyprus is without universities a necessary alternative to Soviet bloc study. We believe this to be an appropriate demonstration of American interest in the welfare of the people of Cyprus.

Finally, in a effort to provide positive incentives for progress toward a Cyprus settlement, the President proposed last year a $250 million Cyprus peace and reconstruction fund for use by the Cypriots when a settlement is reached or significant steps toward one are taken. I want to stress that this proposal is still valid, and a specific request for the authorization and appropriation of funds will be forwarded to the Congress should circumstances permit, as we all hope they will.

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