Defence Financial and Economic Committee

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Defence Financial and Economic Committee

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The FEC chronological series contains the records of the Defence Financial and Economic Committee.During its first session on 17th September 1949 the Council Deputies recognized in directive D-1/3 the importance of economic and financial factors in the development and implementation of military plans for the defence of the North Atlantic Area. Consequently the Council Deputies agreed that a working group should be created which would submit recommendations to the Council on the appropriate machinery to deal with these matters.The Defence Financial and Economic Committee (DFEC) was established on 18th November 1949 during the second session of Council Deputies. The directive D-1/4 to the Defence Financial and Economic Committee set up the composition of the Committee consisting in one member at ministerial level (Finance Ministers) for every signatory country and stipulated that the new body would report directly to the Council. The United States Representative Averell Harriman was elected the first chairman. The FEC met for the first time in Paris on 19th December 1949.The DFEC was created to develop financial and economic guides for collective defence programmes in co-operation with the Military Committee (including the Standing Group) and the Military Production and Supply Board. It was in charge of considering the financial and economic impact (availability of raw materials, capital equipment and manpower), recommending arrangements for interchange of military equipment, measuring the foreign exchange costs and considering plans for the mobilisation of economic and financial resources in times of emergency.The Committee worked on four projects: collecting data on current defence expenditures by country, studying the availability of financial and economic resources for military production, examining financial arrangements for military material transfers and developing formulae and criteria for measuring economic burden of defence.The DFEC disappeared as a result of the modification of NATO‘s structure by a decision of the Council Deputies on 3rd May 1951 (see D-D(51)86 Final). The functions and responsibilities were transferred to the Financial and Economic Board (FEB). The DFEC’s work provided Deputies with statistical information on budgetary resources (data collection for defence expenditures) and with an uncompleted study on the removal of custom barriers for the exchange of war material (see FEB-R(51)1-PART 2).


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