E.R.P. Settlement
The settlement over the distribution of E.R.P. aid which was arrived at last week in Paris will not please everybody, but further delay in reaching a settlement would have created a disastrous impression. It would, however, have been better if distribution had been made in Washington (as this country originally urged) instead of allowing American wishes to intervene, directly through Mr. Harriman, and indirectly through the Bizonia administration, in the Paris discussions. The pattern of relief payments and mutual credits which has emerged is substantially an American one, and it is no use pretending that there are not widespread misgivings about its long-term political and economic implications. It is not so much the actual proportions into which the $4,875 million of United States aid are divided that have proved the stumbling-block, as the arrangements for internal trade between the sixteen participating countries, which form an equally vital part of the plan for European reowery. As the result of a series of extremely complex calculations these countries have been assessed as creditors or Zebtors and on this basis has been estimated the extent to which they will require to give or receive each other's assistance, through the agency of what are known as "unrequited exports." This country, or rather the sterling area as a whole, is reckoned to be the largest creditor, and France the largest debtor. We therefore stand to contribute most to the common pool, both by exports for which we shall receive little of value in return and by unfreezing $2oo million worth of ster- ling balances held by European countries. It is, of course, true that we are also the largest recipient of U.S. aid, but the fact that an agreement has been reached in Paris at all is due to our willingness to make very considerable concessions in respect of the amount and method of our trade with those countries which are, theoretically, less well-placed than we are ourselves. It may well be that any concession which helps to unblock the present stagnation in Europe's trade is to be welcomed, but in our efforts to achieve this end we have made our own immediate tasks harder.
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