The Chancellor Comes Calling

Worries about a defense commitment and a detente policy

The mood was somber, almost melancholy, and the parting was a bit like two boxers shaking hands at the end of a bruising fight. After lunch and a final talk in the White House last week, President Carter cordially thanked his guest for the "very fruitful and constructive relationship" they had had. West German Chancellor Helmut Schmidt, in turn, praised Carter's "friendship, help and candor." The words were the warmest that the two men had spoken publicly about each other during four years of an intensely strained relationship. Said one of Schmidt's aides afterward: "They are probably both glad they won't see each other again."

The Chancellor's visit came at a moment when new tensions were straining West German-U.S. relations. Schmidt's newly elected government had decided, though it had not yet announced it, that in 1981 Bonn would not meet its pledge to NATO to increase defense spending by 3%. Schmidt had apparently decided on a 1.75% increase. In light of the bleak economic conditions facing Western Europe, he reasoned that the 3% commitment, which he had vigorously favored at a 1978 European summit, "needs to be looked at anew." With only 5.3% inflation and 3.8% unemployment, West Germany is better off than many of its neighbors, but Schmidt warned in a television interview, "We are not the hen that laid the golden egg."

The Carter Administration had been counting on West Germany to pull its military and psychological weight in NATO, particularly since several other member nations (notably Denmark and Belgium) had failed to meet their obligations. After learning of Washington's displeasure, Schmidt apparently backed away from his original decision, though he refused to be specific on how close Bonn would come to the 3% goal. On the eve of the Washington visit, the Chancellor's press spokesman, Klaus Boiling, insisted that "Bonn will fulfill its commitments to the North Atlantic Alliance." West German officials pointed out that Bonn has consistently come close to the 3% target in the past.

After his White House visit, Schmidt met with Howard Baker, who is expected to be Senate majority leader in the new Congress. The week before, the Tennessee Republican had bitterly criticized the allies, including West Germany, for endangering NATO by failing to meet their defense obligations. The Chancellor sought to reassure Baker that Bonn would continue to meet its obligations. Late that afternoon, Schmidt walked around the corner from Blair House to the Jackson Place townhouse reserved for past Presidents and Presidents-elect, for an unscheduled hourlong meeting with Ronald Reagan, which Schmidt clearly considered a major diplomatic coup for himself.

West German officials are confident that a smooth, though not problem-free relationship can be developed with the new Administration. One thing they find encouraging is that so many of Reagan's top policy advisers--such as Henry Kissinger, George Shultz and Alexander Haig--are old acquaintances from the Nixon and Ford presidencies. Nonetheless, Schmidt will have to work hard to convince Reagan's team that Bonn has not gone "soft" on the Soviet Union. The Carter White House has been convinced for some time that Schmidt's detente policy was too compliant, and did not hesitate to say so.

The virtual completion last week of the biggest West German-Soviet trade agreement yet will not help Schmidt's position. Under highly favorable terms (7.75% interest for ten years), a consortium of 20 West German banks will provide $5.3 billion in credit for the construction of a 3,000-mile natural-gas pipeline from Siberia to West Germany. By 1984 the Soviets will be supplying 30% of West Germany's natural-gas needs, up from 9% today. Lamented a Bonn Economics Ministry official: "That will make us even more dependent on trade with Moscow, and [the Soviets'] leverage will be even greater." A Bonn Foreign Ministry specialist admitted that "it worries many of us." He could easily have added that it worries Washington as well.

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