868.00/10–2648: Telegram
The Acting Secretary of State to the Embassy in Greece
Gama 1320. [Re] Amag 1621.1 Dept appreciates unsatisfactory nature present Grk mil situation as clearly indicated excellent AMAG reports including that referred reftel and agrees there is no basis for optimism in short-range picture. In view, however, crisis psychology which emerged from visit Sec coupled with Vitsi setback and which resulted widespread pessimism and criticism Grk situation US press, as well as deterioration Grk morale, it is believed that any statement regard present situation should be balanced by statement showing long-range progress achieved in laying basis for ultimate solution Grk guerrilla and economic problems. It is believed that this progress on balance outweighs short-range setback. It is obvious that GNA now much better equipped, fed, led and trained than at initiation Aid Program, at which time recent successful campaigns through Grammos operation would not have been possible. Although Vitsi setback embarrassing and discouraging, it nevertheless appears that GNA has capability of eventually controlling present guerrilla situation if leadership and morale can be restored. On economic side, although industrial production and ability Greece to maintain independence US Aid have not been appreciably bettered under Aid program, nevertheless basic reforms have been achieved and inflationary trends arrested. Assuming continuation ECA assistance, there is now no immediate threat to collapse Govt through inflationary spiral, which could lead to Communist takeover, as was possible last fall, any more than present guerrillas have capability taking over military control of Greece. Dept believes correct background present Grk situation is [Page 178] mixture full acknowledgment short-term military reverses and economic difficulties while at same time pointing out real achievements accomplished since initiation Aid Program and basis for hope for future improvement. While not denying or discounting any obvious short-term lack cooperation or defection on part Grk Army, people or Govt, it is believed desirable maintain facade of confidence ultimate ability Grks do their part in war against guerrillas and economic recovery, which through our own efforts we must seek to make a reality.
- Dated October 26, not printed; it advised that the third phase of the Vitsi Operation, scheduled for October 15, was “generally speaking a failure and the present thinking of JUSMAPG is along the lines of containing Vitsi and withdrawing excess troops for operations in Thessaly and the Peloponnese.” (868.00/10–2648)↩