'...they have got to put something in the family pot!' : the burden sharing problem in German-American relations 1960-1967

Abstract

Once the US security commitment in Europe had become a heavy liability with the vanishing dollar surplus in the 1960's, the US government used the security guarantee, on which West Germany was so dependent, to pursue the monetary objective of improving its balance of payments situation by drawing on the strong currency and rising foreign reserves of West Germany through offset agreements. The increasingly acrimonious offset negotiations only ceased with the introduction of flexible exchange rates in 1976.