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Austria 813


to Austrian Government that Vienna Memorandum would be settled
without delay. Pointing out that oil companies have had world-wide ex-
perience and thus fully aware of political responsibility, Secretary
stressed that since this is matter between private companies and Aus-
trian Government USG could not inject itself into political phase. He
said he was encouraged by Kreisky's remarks regarding settlement by
end this year.
    2. Counterpart releases.
    Kreisky referred to blocking of counterpart releases. While Vienna
Memorandum and counterpart release not directly connected, nonethe-
less, public opinion believed that we had blocked counterpart release
pending Vienna Memorandum settlement and this not good for US-
Austro relations. He stressed that within his own party there was great
sensitivity and resentment over political pressures. Kreisky indicated
that while he not pressing for immediate change in our policy, he de-
sired point out its adverse effects. Secretary did not comment on
Kreisky's exposition beyond indicating his understanding Kreisky
would develop matter more fully with Under Secretary.
    3. South Tyrol.
    Kreisky spoke at great length on South Tyrol question and referred
to Pella's UNGA speech as &quot;strong and unfriendly.&quot;4 Kreisky said
that
his own mention of South Tyrol problem before UN was understate-
ment and was necessary to show Austria and people in South Tyrol that
Austrian Government was ready to do something about situation.5 If
Italians did not take steps soon to correct problem, situation regarding
South Tyrol might become more serious. Austria willing continue nego-
tiations, but there was limit. If Italy unwilling grant autonomy Bolzano
Province and situation has not improved by next year, Austria will be
forced refer matter to UN. Only in this manner will Austria be able to
resist existing pressures in Austria and South Tyrol for self-
determination. Kreisky realized that this was extremely delicate ques-
tion for US but expressed hope US could help restrain &quot;terrible
arrogance&quot; with which Italy dealing this question.
    Secretary said that while we regretted disagreement between two
friends, we believed this could best be resolved by bilateral negotiations
between Austria and Italy. We thought referring question to UN would
only contribute to increasing tensions and making situation more diffi-
cult. Secretary inquired whether this was not issue which might be


    4For text of Pella's speech before the 804th Plenary Meeting of the U.N.
General As-
sembly, September 23, 1959, see Official Records of the General Assembly,
Fourteenth Session,
15 September-13 December 1959, pp. 120-124.
    5 For text of Kreisky's speech before the 800th Plenary Meeting of the
U.N. General
Assembly, September 21, 1959, see ibid., pp. 39-40.


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