868.51/8–1446: Telegram
The Acting Secretary of State to the Ambassador in Greece (MacVeagh)
1002. Since arrival Aug 1 Greek Economic Mission consisting Venizelos,51 Ailianos, Bakalbassis and Karamanlis has had frequent meetings with officials Dept, Treas, Come, Agri, UNRRA and Eximbank. Despite Dept’s indication US officials did not wish discuss further loans to Greece at this time, which was clearly explained to Mission by letter from Harriman before Mission left London, Venizelos and Ailianos insist conditions so serious Greek Govt felt necessary request loan this time despite US advice. Venizelos stresses political importance immediate further credits in order bring hope Greek people and expresses fear Greek internal social order will collapse if early aid not forthcoming.
Greek memo presented Eximbank and Dept Aug 752 mentions additional loan $175 million, of which approximately $25 million would be used for purchase consumers goods in US in order Greek Govt by their sale could secure drachmas for local expenses in connection reconstruction and rehabilitation. Both Bank and Dept officials consider [Page 191] this memo poorly conceived and inadequate, containing many inconsistencies and estimates at great variance with those prepared by US Govt sources as well as surprising statement increased taxation would produce inflation. Attitude US officials also influenced by Greek slowness and inefficiency in connection utilization existing 25 million credit. Almost all US officials including President have mentioned necessity Greek Govt showing firm intention to institute economic, financial and tax reforms to put its own house in order.
Greek Mission approach on subject further credits widely divergent from Bank’s. Greeks think obvious need for reconstruction and rehabilitation should justify blanket extension large credit with specific uses worked out later in conjunction with Bank. On other hand Bank now prefers to operate on basis submission individual projects with adequately supporting data and accurate estimate sums necessary for carrying out each project. Bank would then make individual decision each project rather than blanket line credit. Greek Mission will be encouraged not to submit formal request for $175 million as such formal presentation would require official Bank decision which would be negative.
Dept feels Mission visit has been profitable as opportunity for exchange of views and will have good effect if returning Mission can convince Greek Govt that sympathetic consideration any future US assistance will be greatly facilitated by demonstration Greeks’ ability to help themselves. Ineffective use existing Eximbank credit and $10 million surplus property credit due dilatory Greek tactics and not to any obstacles raised by US officials.
Before departure Greek Mission, now scheduled Aug 22, Dept intends issue press release53 emphasizing profitable two-way discussion on Greek economic and reconstruction problems. It is hoped some specific and encouraging items can be included such as improved coal and additional textile allocations; establishment better contacts for sale Greek tobacco to US; possibility early Lend-Lease settlement and defrosting Greek assets in US.
Sent Athens 1002; rptd London 6041, Paris 4091.
- Sophocles Venizelos, the head of the Greek Economic Mission, sent a letter to Mr. Acheson on August 6 which presented in general terms Greece’s dire need for immediate economic assistance (868.50/8–646).↩
- Not found in Department files.↩
- For text of press release issued on August 22, see Department of State Bulletin, September 1, 1946, p. 426.↩