868.51/12–1445: Telegram
The Ambassador in Greece (MacVeagh) to the Secretary of State 44
[Received December 16—10:56 a.m.]
1447. Finance Minister Mylonas called on me this morning regarding financial situation. This rapidly becoming very serious, today’s rate gold pound reaching around 100,000 drachmas with dollar currency about 3,700. Stressed practical efforts he is making to close inflationary gap but stated present rapid rise both gold and commodity [Page 284] prices with consequent necessity continually increasing salaries other expenses makes balanced budget impossible. Said had seen “advance guard” of British Economic Mission arrived yesterday but feels serious political disaster possible unless prompt measures taken give this country other support than mere advice. Pointed out unbridled speculation certain continue otherwise, based on lack public confidence. Feels psychological approach prerequisite any other steps calculated bring about stability and repeated requests described mytel 1383, Dec 1, for credit and gold representing advance on Greek share German reparations. In absence gold Mylonas suggested loan actual dollar currency for use by Bank Greece in controlling local market.
British colleague agrees situation critical for present govt and possibly for whole Allied policy helping Greece over elections. Therefore if nothing more can be done urge moment opportune for release statement described Deptel 1200, Nov 28 regarding Export Import Bank credit, if possible indicating assurance US intends see Greece through until country again on its feet conditioned upon Greeks doing their part.
- Marginal notation: “Reply deferred for more info on questions of policy and situation covered in later cables”.↩