The British Embassy to the Department of State 1
His Majesty’s Government are giving most earnest and anxious consideration to the important problem that on strategic and political grounds Greece and Turkey should not be allowed to fall under Soviet influence.
2. It will be remembered that at the Paris Peace Conference Mr. Byrnes expressed full realisation of the great importance of this question and proposed that the United States Government should give active help in sustaining the economic and military position in those two countries, the United States Government in particular taking care of the economic side.
3. On various occasions subsequent to the meeting referred to above the United States Government have exchanged views with His Majesty’s Government, indicating the acute interest of the United States Government in the future of Greece, and from these exchanges His Majesty’s Government have understood that the United States Government does not exclude the possibility of helping Greece on the military side as well as the economic.
4. The State Department will recollect the conversation between Mr. Byrnes and the Minister of Defence which took place on the 15th October, 1946,2 subsequent to which the whole question of British military and economic help for Greece has been carefully examined by His Majesty’s Government. On the economic side, the reports received by His Majesty’s Government from their representatives in Greece show that the Greek economic situation is on the point of collapse, owing to the virtual exhaustion of Greece’s foreign exchange reserves and the low level of industrial activity resulting from political instability. In this connection His Majesty’s Embassy attach to this Aide-Mémoire Appendix “A”,3 which is a report dated the 5th February, from His Majesty’s Representative in Athens, on the acute economic and financial situation in Greece.[Page 33]
5. The United States Government are as well aware as His Majesty’s Government that unless Greece can obtain help from outside there is certain to be widespread starvation and consequent political disturbances during the present year. The Experts Committee of the United Nations have estimated Greek relief needs in 1947 at £21 million. This figure is based on the maintenance of the present subnormal standard of industrial activity and will, in the view of His Majesty’s Government, be wholly inadequate to achieve our political objective of maintaining stability. His Majesty’s Government estimate the actual needs of Greece, excluding the foreign exchange cost of the armed forces, at a minimum of £40 million in 1947. However, the serious economic plight of Greece as outlined above is already well known to the United States Government from the reports of their representatives in Greece and is no doubt being supplemented at the present time by preliminary reports from the Porter Mission.
6. In view of the position outlined in the above paragraph, His Majesty’s Government take the view that it is most urgent that the United States Government should be able to decide what economic help they will give to Greece and what form it will take.
7. In the event of the United States Government being able to offer economic aid to Greece, it would no doubt consider the despatch of a United States economic mission. If this should be done, the future of the British Economic Mission in Greece would have to be considered.
8. On the military side, Greek needs have been very carefully considered by the British military authorities during the last few months, and the position has been investigated personally by the Chief of the Imperial General Staff during his recent visit to Greece.4 His Majesty’s Government have agreed to pay the foreign exchange cost of the Greek armed forces, both in regard to maintenance and initial equipment, until the 31st March next. This is likely to cost H.M.G. during 1946 and the first 3 months of 1947 approximately £18 million for maintenance, together with £11 million for initial equipment. This, in view of H.M.G.’s financial difficulties, can be regarded as a very generous measure of assistance to Greek reconstruction. Hitherto the Greek armed forces have been built up on an establishment which allows for an army of 100,000 men, the total foreign exchange cost of which is estimated at about £16 million a year. In order to meet the present emergency caused by the bandits, the British service authorities consider that the Greek armed forces should now be reorganised to enable them to make an all-out assault on the bandits in the Spring. The reasons why this reorganisation has become necessary are set out in papers which are now in the possession of the British Joint Staff [Page 34] Mission in Washington, who also have full details of the present organisation of the Greek armed forces and of the reorganisation proposed by the British military authorities. These details are available for study by the State Department and the United States Chiefs of Staff. The Joint Staff Mission are also in a position to provide the United States Government with a list of the equipment required by the Greek armed forces which cannot be supplied from British sources.
9. His Majesty’s Government suggest that, if the United States Government agree, the various military questions involved should be taken over for urgent consideration by the combined Chiefs of Staff.
10. In view of the extreme urgency of taking some immediate action to enable the reorganisation proposals to be undertaken, His Majesty’s Government have agreed to make available additional equipment to the value of £2 million free of charge to the Greek Government. This, supplemented by American supplies of equipment which is not available to H.M.G., will enable the Greek armed forces to be put in a position to undertake operations in the Spring against the bandits, provided that means can be found to meet the rest of the foreign exchange cost of such operations. On the assumption that operations will last six months, the foreign exchange cost of this reorganisation, together with the foreign exchange cost of the operations themselves, will over this period amount to £20 million. (The foreign exchange cost after the end of the operations will be smaller but will remain considerable.)
11. His Majesty’s Government had hoped that part of the foreign exchange cost of the Greek armed forces after 31st March, 1947 could be met out of the money due to Greece by His Majesty’s Government for the supply of currency and local services to the British forces in Greece. But £5 million out of the amount so due was recently placed at the disposal of the Greek Government for the purchase of food and is therefore no longer available to cover part of the cost of the armed forces.
12. Thus the total amount of assistance for civilian and military needs which Greece requires during 1947 appears to be between £60 million and £70 million. His Majesty’s Government have already strained their resources to the utmost to help Greece and have granted, or undertaken to grant, assistance up to 31st March, 1947 to the amount of £40 million. The United States Government will readily understand that His Majesty’s Government, in view of their own situation, find it impossible to grant further financial assistance to Greece. Since, however, the United States Government have indicated the very great importance which they attach to helping Greece, His Majesty’s Government trust that the United States Government may find it possible to afford [Page 35] financial assistance to Greece on a scale sufficient to meet her minimum needs, both civil and military.
13. His Majesty’s Ambassador is instructed to express the earnest hope of His Majesty’s Government that, if a joint policy of effective and practical support for Greece is to be maintained, the United States Government will agree to bear, as from the 1st April, 1947, the financial burden, of which the major part has hitherto been borne by His Majesty’s Government. In view of the extreme urgency, both on economic and military grounds, that the Greek Government should know what financial help is going to be available in the present year, His Majesty’s Government express the hope that the United States Government will indicate their position at the earliest possible moment.5
- This Aide-Mémoire and the one infra were handed informally to Mr. Henderson by Herbert M. Sichel, First Secretary of the British Embassy, on February 21. They were formally delivered to the Secretary of State by the British Ambassador on February 24; see Mr. Henderson’s memorandum of conversation of that date, p. 43.↩
- See the memorandum of November 5, 1946, from the British Embassy in Greece to the American Embassy in Greece, Foreign Relations, 1946, vol. vii, p. 913.↩
- Not printed.↩
- See footnote 73, Foreign Relations, 1946, vol. vii, p. 283.↩
- In his Memoirs President Truman states that Acting Secretary Acheson telephoned him immediately about the contents of this note. See Memoirs by Harry S. Truman: Years of Trial and Hope, vol. ii (Garden City, N.Y., Doubleday & Company, 1956), p. 100.↩