Foreign Relations of the United States, 1947, The Near East and Africa, Volume V

868.51/4–2947

Memorandum by the Chief of the Division of Investment and Economic Development (Havlik) to the Director of the Office of Financial and Development Policy (Ness)

[Washington,] April 29, 1947.

Subject: Eximbank Proposal to make no more Loans under Greek Credit

1. The Export-Import Bank memorandum¹ proposes alternative courses of action: (a) cancelling the unused balance of this credit, or (b) deferring until after consideration some time in the future the extension of further credit under the $25 million authorized to be extended to Greece. The grounds for refusal of further credits are that statements in connection with the Greek Aid Bill imply that Greece is a poor credit risk.

2. We do not agree with the reasoning underlying the proposal to cancel. The Greek program now before Congress was worked out on the assumption that the Export-Import Bank credit will become available. It seems certain that in order to carry out reconstruction of war damages Greece will require the funds involved in the unavailed portion of this loan in addition to funds used for reconstruction under the Greek-Turkish Aid Bill. Consequently, the Export-Import Bank loan should not be cancelled.

With the large amount of United States aid of both military and economic nature in prospect, the position of Greece as a credit risk is obviously strengthened. Accordingly this loan should not be cancelled for reasons of credit risk.

3. It appears desirable to go ahead with projects which are nearly ready to be put into definitive form for financing, as to defer or cancel them would further delay Greek recovery. However, there would be no serious objection to deferring the extension of credit on new projects until the American Recovery Mission has had an opportunity to examine reconstruction projects in detail and to forward recommendations on projects which might be especially suitable for Eximbank financing.

4. The Greek desk agrees with the above analysis and recommendations.

1. Copy not found in Department of State files.