208. Telegram From the Ambassador in Argentina (Nufer) to the Department of State1
879. Embassy skeptical whether there exists as yet any fully elaborated plan for Argentine economic reconstruction including definite amounts aid wanted from US (Department telegram 803, February 6; Embassy telegram 865, February 82). Government clearly thinking in terms substantial financial aid from US. Argentine slowness to specify aid wanted may be attributed to (1) fear of being rebuffed; (2) nationalistic opposition to outright request for foreign loans; (3) caution inspired by Exim reception steel mill application; (4) time required explore possibilities financial help from Europe or private sources in US. Embassy informed technical advance group will probably visit Washington shortly to explain needs and present supporting statistics. Higher level mission may be delayed until Argentina has some indication of probable reception for specific [Page 406] request; which may itself be modified by US reaction to advance group.
Ability provisional Government, which is democratically oriented and has shown favorable disposition US, to stay in power depends in part on ability to pull Argentina out of its present economic morass. Failure in this might cause replacement by less desirable government with possible anti-US bias. Although US not responsible Argentine delay, Embassy feels in view passage of time it is most important we be prepared react promptly when Argentine request presented.
Embassy fears agreement to all phases Argentine request may not be feasible. Therefore suggest Argentines be urged present requests in form of specific projects with indications of what complementary financing is expected from sources other than US Government. This would permit examination and approval one part at a time and avoid embarrassment of Argentine Government if reply to a global type proposal appeared unfavorable here. Embassy has already dropped word to some officials in Ministries Finance and Foreign Relations that project type proposals may be easier to discuss and might advance more quickly in Washington.
The unfortunate fact must be recognized that most of essential reconstruction projects such as steel plant, electric generators, etc., will require at least 3 years to have any appreciable effect on Argentine economy. Some smaller projects such as credit facilities for raw materials, industrial machinery replacements, farm machinery, etc., would have some effect within year. Critical period will probably occur within few months.
Embassy wishes emphasize once more importance keeping in view important political considerations in determining extent and nature US assistance and of avoiding if at all possible apparent negative reactions which would permit unfriendly elements here blame crises on US.