781.55/1–3050: Telegram

The Ambassador in Greece ( Grady ) to the Secretary of State

secret

213. Tomap. ReDeptel 159.1

1.
In my letter of December [January] 17 to Greek Government,2 copy of which was forwarded to Department, I recommended maximum military strengths for June 30 and December 31, 1950. These are figures proposed by JUSMAP[ G ] last summer.3 I think the recommended figure of 92,700 for December 1950 is satisfactory as temporary goal, but we should bear in mind that a force less than 75,000 must eventually be our goal if we are to continue to give military aid to Greece. Consequently, if there is to be reopening of question of strength ceiling, I think we should lower rather than raise it. I do not think that difference of a few thousand men in armed service will break Greece financially or that they will make Greece secure, but my statements below show you my general reason for recommending reduction rather than increase, no matter how slight.
2.
In rough figures Greek Government expenditures for FY 1950 are 6 trillion drachmae. Revenues will amount to only 4 trillion drachmae, leaving a deficit of 2 trillion which must be made up with ECA counterpart funds. In addition to this almost 1 trillion ECA counterpart funds are being spent for reconstruction. Of the 6 trillion normal expenditures, one-third are military. Economic and military aid in FY 1950 constitute over 25 percent of national income. This unsound economic position is due in large part to actual war expenses and dislocating effect of war on economy. However, it is also due in large part to chronic poverty of country, which is accentuated by tendency of government to spend large share of its income on relief, subsidies and other benefits to the many people who might otherwise not have a subsistence income. Steady progress has been made in improving production and I think that ECA aid will continue to improve the economy. Nevertheless, I think it may be some years before Greek wealth and income will be great enough to support her government and give her people decent standard of living. (In order to force Greeks to make best use of present aid we are, of course, publicly maintaining that ECA aid will end in 1952.)
3.
On strictly economic grounds, I therefore am inclined to think that Greece cannot afford more than a small armed service. I realize, of course, that national security comes first and that there must be an adequate armed service. We are thus faced with decision as to how large an armed service we should recommend for country which, on its own resources, can afford only a token armed service.
4.
In American eyes the primary purpose of Greek armed forces is to maintain internal security and repel guerilla invasions. Secondary purposes might be to build confidence, to delay a full-scale invading force or to provide evacuation means. First purpose can be regarded as absolutely essential one, whereas the others are of so little importance that they should be fulfilled by the forces set up for first purpose. In Greek eyes, large armed service is necessary not only to maintain internal security but also for the repelling of full-scale invasion, no matter how hopeless this may be.
5.
I know of no indications that Communists intend to renew guerrilla warfare in coming summer, and in fact there are reasons why the time is inopportune. For example, successes in the Far East, recent defeat in Greece, increasing strength of Greek nation. Despite this, we can expect continued resistance from Greeks to our recommendations for military personnel reductions.
6.
My visit to Washington about February 1 to 10 will give us an opportunity to discuss this further.

Grady
  1. Dated January 25, not printed; it requested Ambassador Grady’s reasons for recommending lower Greek force levels (781.55/1–2550).
  2. Supra.
  3. See telegram Amag 62, June 28, 1949, from Athens; text in Foreign Relations, 1949, vol. vi, p. 360.