European Drawdown: Status of Residual Value Negotiations in Germany
(Briefing Report, 06/23/94, GAO/NSIAD-94-195BR).

This briefing report provides information on the total estimate of
potential residual value of U.S. installations being returned to
European host countries and the status of the residual value
negotiations between the United States and Germany. So far, the United
States has recovered only a small portion of its total estimated
residual value claim in Europe, estimated at $3.8 billion. Most of this
estimate comes from installations being returned in Germany, where the
U.S. investment is pegged at $3.4 billion. State Department officials
said that negotiations on a settlement with Germany have begun but that
much hard bargaining remains ahead. They also said that the $3.4 billion
figure is a starting point for negotiations, but they consider it
significantly more than the United States can expect to receive
ultimately. The negotiations are being carried out at a time of severe
financial constraints on Germany, resulting in part from aid being
provided to Russia, the Ukraine, and Eastern Europe. The United States
has received about $3 million in cash from Germany for a small number of
properties returned before 1991. Unable to negotiate additional
satisfactory cash settlements with Germany, the U.S. military has
started to turn to payment-in-kind. That is, the German government will
fund military construction projects to be carried out by German
companies instead of paying cash for U.S. facilities and improvements at
U.S. installations being returned.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-195BR
     TITLE:  European Drawdown: Status of Residual Value Negotiations in 
             Germany
      DATE:  06/23/94
   SUBJECT:  Military downsizing
             Reductions in force
             Military bases
             Claims settlement
             Foreign governments
             Investments abroad
             Surplus federal property
             Offsetting collections
             Property disposal
             International agreements
IDENTIFIER:  Germany
             Europe
             
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