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SECRET/EXDIS - 2 - "In connection with the five-year extension of the Defense Agreement (and we assume favorable considera- tion of the Colossus project which has been suspended pending the renewal of the base negotiations) the U.S. Government is prepared to provide, subject to Congressional authorization and appropriation, up to $175 million of grant military assistance over the five-year period of the extension with the understanding that our tenure on the bases will be for a full five years from and after September 26, 1968, with a six-month consultation period plus an additional year thereafter in which to withdraw from Spain if no new Defense Agreement is concluded. "Additionally, we would be willing to review our military materiel resources after the cessation of hos- tilities in Vietnam or by September 26, 1971, whichever comes earlier, in order to determine whether and to what extent other materiel which may become excess to our needs could be provided to Spain during this five-year extension at no additional cost to the U.S. "The $175 million will substantially assist in the modernization of the Spanish Armed Forces. It is not possible for us to agree on a precise list of items at this time, since pricing and availability are never certain and Spanish defense needs may change over the period. How- ever, against the background of the military discussions, we are persuaded that these resources can be applied against the priorities which Spain will establish to make a significant and continuing contribution in the interests of both our governments. "General Burchinal, who is presently in Washington, is ready to assist General Diez-Alegria, should he need additional clarification as to the lists of equipments they have been discussing. General Burchinal can be in Madrid at any moment. " SECRET /EXDIS

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    "ocrText": "SECRET/EXDIS\n- 2 -\n\"In connection with the five-year extension of\nthe Defense Agreement (and we assume favorable considera-\ntion of the Colossus project which has been suspended\npending the renewal of the base negotiations) the U.S.\nGovernment is prepared to provide, subject to Congressional\nauthorization and appropriation, up to $175 million of\ngrant military assistance over the five-year period of\nthe extension with the understanding that our tenure on\nthe bases will be for a full five years from and after\nSeptember 26, 1968, with a six-month consultation period\nplus an additional year thereafter in which to withdraw\nfrom Spain if no new Defense Agreement is concluded.\n\"Additionally, we would be willing to review our\nmilitary materiel resources after the cessation of hos-\ntilities in Vietnam or by September 26, 1971, whichever\ncomes earlier, in order to determine whether and to what\nextent other materiel which may become excess to our needs\ncould be provided to Spain during this five-year extension\nat no additional cost to the U.S.\n\"The $175 million will substantially assist in the\nmodernization of the Spanish Armed Forces. It is not\npossible for us to agree on a precise list of items at\nthis time, since pricing and availability are never certain\nand Spanish defense needs may change over the period. How-\never, against the background of the military discussions,\nwe are persuaded that these resources can be applied\nagainst the priorities which Spain will establish to make\na significant and continuing contribution in the interests\nof both our governments.\n\"General Burchinal, who is presently in Washington,\nis ready to assist General Diez-Alegria, should he need\nadditional clarification as to the lists of equipments\nthey have been discussing. General Burchinal can be in\nMadrid at any moment. \"\nSECRET /EXDIS"
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