skill snd German lndustriousness will require large
 
external markets if the most serious unemployment is to be
 
avoided. Such unemployment, apart from the suffering it
 
would involve, would provide a veritable forcing bed for 
 
communism. Nothing would be more repellant to the advo-
 
cates of Group A idea than to see German abilitles at the
 
service of communism.
 
     The dismemberment of the Reich would break up
 
the integrated German economy. This would have such
 
disastrous results that even the advocates of partition
 
would be forced to the conclusion that at least a German
 
economic and customs union would have to be reestablished.
 
            Industrial Germany is the natural market for 
the bulk of the agricultural exports of South Eastern 
Europe and of a considerable portion of those from the 
Baltic and Scandinavia. The United Kingdom and France 
have in recent years experienced much embarrassment in 
attempting to provide markets for relatively small 
quantities of Roumanian, Bulgarian, Hungarian or
Yugoslavan products.
 
6. The impracticability of Group A ideas is that:
 
(i) They involve heavy and enduring military commit-
ments for the United Kingdom and France which 
neither nation will permanently accept.
 
(ii) They make no provision for dealing with the 
Russian, Italian or Japanese oroblems, neither do
they provide any solution for the Balkans.
 
(iii) They would inevitably lead to a resurgence of 
extreme German nationalism and hence would
probably lead to another disastrous war.
 
(iv) They would render economic difficulties more acute 
and thus foster a soread of communism-an out-
come which Group A, in particular, desires to avoid.
 
(v) From the United Kingdom standpoint the Group A 
ideas are particularly unsuitable since they would 
almost certainly lead to a major dispute with the 
Dominions and to friction with, and estrangement 
from, U.S.A.
 
(vi) From a Dominion standpoint the consequences apart 
from those in (v) would be extremely serious. Group 
A policies would almost certainly mean the continuance 
of restrictions on trade. To the Dominions with their 
partially developed resources
 
                                                       an