Foreign Relations of the United States, 1946, The Near East and Africa, Volume VII

868.51/8–746

Memorandum by the Acting Secretary of State to President Truman

[Washington,] August 7, 1946.

Subject: Greek Economic Mission

1. In January 1946 the Export-Import Bank signed an agreement with Greece for a $25 million loan. At the same time the American Ambassador in Athens delivered to the Greek Government a note that had been approved by you, pointing out the urgent need for the Greek Government to take immediate and energetic measures to solve its economic difficulties.

2. Up to the present time the Greek Government has not used any of the $25 million credit made available to it nearly eight months ago. The information available to the Department indicates that the Greeks have not taken effective measures to deal with their internal financial difficulties, or to make the most effective use of the foreign assets already available to the country.

3. Early in July the Greek Prime Minister indicated to our Ambassador in London that he would like to send a mission to this country to discuss an additional Export-Import Bank loan. The Department, after consultation with the Export-Import Bank, replied that the time was not opportune to discuss a further loan, but that a mission to discuss the general Greek economic and financial situation would be welcomed. Our Ambassador in London conveyed this information to the Greek Prime Minister, and made clear that under present conditions there was no prospect of a new Export-Import Bank loan at this time.

4. The mission, however, in its early conferences with the Department has requested a new Export-Import Bank loan of $175 million, and urged the necessity of such a loan to prevent economic and political collapse.

5. UNRRA to July 31, 1946, provided $293 million of free assistance to Greece, and this assistance by the end of 1946 will total approximately $358 million. The Department, after a careful survey of the Greek economic situation, concluded that Greece could meet essential import needs in 1947 if it used effectively the resources at its command, including the $25 million Export-Import loan. The Department did not feel that it was practicable to ask Congress to appropriate additional relief funds for Greece, either through UNRRA or a new organization. This decision has not yet been communicated to the Greek Government, but it is probable that Mr. Clayton⁴⁵ will explain our position to Greek representatives at the current UNRRA meeting in Geneva.

6. It is the feeling of the Department that it would be unwise for this Government to commit itself to extend any additional Export-Import Bank credits to Greece until the Greek Government has shown that it is taking the measures within its own power to deal with its economic problems. If Greece does that, an Export-Import Bank loan should be an effective means of furthering reconstruction in Greece, but in the absence of such action I feel that a new loan would do little, if anything, to solve the basic economic or political difficulties of Greece, and would ultimately add to its financial problems.

7. For your information, there is attached a copy of the note of January 12.⁴⁶

Dean Acheson

45. William L. Clayton, Assistant Secretary of State for Economic Affairs.
46. Not printed. President Truman received the Greek Ambassador and the Greek Economic Mission on August 7. In a memorandum of the same date to Mr. Henderson, Mr. Baxter noted that the “President pointed out that any economic aid to be effective must be accompanied by measures undertaken by the Greek Government to restore normal internal economic conditions and that any credit extended through the Export-Import Bank is a two-way proposition with agreements to be worked out on both sides of the table.… The President once again assured the Mission of his desire to see Greece restored to economic health and stated that he would discuss the matter with the Secretary. It was understood, of course, that no decision of any sort could be reached until the Greek program had been thoroughly studied and discussed by Government officials who would, he was certain, be as sympathetic towards Greece as he himself.” (868.50/8–746)