Foreign Relations of the United States, Diplomatic Papers, 1945, The Near East and Africa, Volume VIII

868.00/11–1045

Memorandum by the Secretary of State to President Truman ¹⁷

Washington, November 10, 1945.

It is reported that Prime Minister Attlee may wish to discuss the Greek situation with you and may propose that this Government cooperate with the British Government in the latter’s military and other responsibilities in Greece. It is the conviction of the Department that military responsibilities in Greece should not be undertaken by this Government since such cooperation would contribute nothing to the solution of present problems in that country. However, the rapidly deteriorating Greek economic situation seems to require definite action on the part of this Government if Greece is not to enter into another period of disastrous inflation and economic collapse. The country is making little progress towards economic stability but is primarily subsisting on the aid which the United States and other nations are supplying, chiefly through UNRRA.

By the time of the projected elections, which this Government is committed to observe, the internal situation in Greece may have reached a state in which it will not be possible for the true wishes of the population to be expressed by ballot. A weak, chaotic Greece is a constant temptation to aggressive actions by its northern neighbors, which are none too friendly in any event, and constitutes a serious menace to international peace and security.

The lack of a firm program of economic stabilization in Greece since its liberation from German occupation is now resulting in severe inflation, high governmental expenditure and low revenue, disrupted Civil Service, stagnant industry and trade, and widespread unemployment. The Greek Cabinet recently formed by Canellopoulos has expressed its intention of undertaking measures to combat these problems, but the experience of Greece in the past year indicates that strong forces have heretofore prevented the successful accomplishment of such measures. It is felt that the strong support of such measures by the United States, as well as Great Britain, if made known to the Greek public, would help to give the present Greek Government, or any succeeding interim government between now and elections, the necessary backing to carry out successfully a program of economic stabilization.

It is therefore proposed that this Government present to the Greek Government, and at the same time release to the press, a note embodying the following points:¹⁸

(1) The United States, deeply concerned with the present situation in Greece, urges the Greek Government to undertake a stringent internal program of economic stabilization in order to start Greece on the path toward economic recovery;

(2) The extent of economic assistance which the United States Government could offer to Greece in the form of loans or other aids would necessarily be influenced by the effectiveness with which the Greek Government itself pursues a sound program of economic stabilization;

(3) The United States Government would be prepared to make available the assistance of technical economic experts, if requested by the Greek Government, to consult on Greek financial and economic programs.

Legislation whereby American technical advisers may be sent to foreign governments is now receiving favorable consideration by the Congress, but it is not yet in force. In view of the urgency of the Greek situation, you may wish to authorize an allotment from your emergency funds, in an amount to be agreed upon by the Department and the Bureau of the Budget, to provide for a small group of technical experts to be sent to Greece for a limited period.

In view of the heavy British responsibilities in Greece no action on this proposal will be taken without the concurrence of the British Government. If you approve,¹⁹ the Department is prepared to undertake discussions with the British and the preparation of a note to the Greek Government along the foregoing lines.

17. In a chronological report, dated January 10, 1946 (868.51/1–1046) William O. Baxter of the Division of Near Eastern Affairs discussed this memorandum and stated: “British Embassy informally apprised of our intentions—including hope that approval might be given for offering technical advisers to Greek Govt.” Mr. Baxter’s report also referred to a “Brit, telegram expressing satisfaction in attitude of US Govt. as given informally to Brit. Embassy”. This telegram, apparently dated November 14, 1945, is not found in Department files.
18. As drafted, there were four numbered paragraphs in the section that follows, Paragraph originally numbered (2) read: “The United States believes that, if such a program is not undertaken, further UNRHA assistance would be largely ineffective and the United States would find it increasingly difficult to support continued assistance of that organization to Greece”. This paragraph was deleted at the request of Assistant Secretary of State Clayton and paragraphs originally numbered (3) and (4) were renumbered (2) and (3).
19. Undated marginal note by President Truman: “I approve discussions. Would like to see the agreed proposal.”