Shultz Warns of Possible Cuts in NATO Aid

Secretary of State George P. Shultz today told NATO allies that they may get less financial help with their military programs because of pressure to cut up to $20 billion from the U.S. defense budget.

Shultz told the alliance’s 15 other foreign ministers at a closed first session of their annual year-end meeting that defense spending will undergo special scrutiny because of the U.S. budget deficit, conference sources said.

A senior American official said that, in meetings with individual ministers, “the secretary has been talking a great deal about the economic situation in the United States and where we might be going in the legislation concerning the deficit.”

About continued U.S. aid to some poorer countries of the alliance, “he did make the point that obviously there is a connection between what we can do and how much we have to do it with,” said the official, who demanded anonymity.

Pentagon officials have been talking about cuts of between $15 billion and $20 billion in the $300-billion defense budget for this year.

Consume Half of Funds

NATO programs consume more than half of the funds. In addition to supporting U.S. forces in Europe, the United States contributes to common defense programs. It also provides aid to several individual member countries--$1 billion to Turkey, for example.

The foreign ministers today adopted a cooperation agreement on weapons procurement in an effort to cut costs.

Alliance officials have espoused the ideal for years of sharing weapons systems, which would save money by avoiding duplication in design and production.

The ideal has made little headway against pressure from national armaments industries and the preference of military officers for weapons made in their own countries.

An official announcement said today’s agreement obliges NATO representatives to look for deficiencies in the current system, increase efforts “to achieve a more cost-effective use of resources of the countries of the alliance” and try to establish “cooperative projects.”