S/SNSC Files: Lot 63 D 351: NSC 421

Memorandum by the Under Secretary of State ( Webb ),2 to the Executive Secretary of the National Security Council ( Lay )3

top secret

Subject: First Progress Report on NSC 42/1,5 “United States Objectives with Respect to Greece and Turkey to Counter Soviet Threats to United States Security”, approved as Governmental Policy on March 23, 1949.

It is requested that this report be circulated to the members of the Council for their information.

A. Greece

i policy implementation

The following important actions have been taken pursuant to the conclusions set forth in NSC 42/1:

Military Aid

By the end of fiscal 1949, the program of United States military aid to Greece initiated two years earlier had involved expenditures of approximately $345 million and had brought the Greek forces to a peak of combat efficiency in preparation for a final campaign against remaining communist guerrilla strongholds in northern Greece.

Military aid to Greece has been continued during fiscal 1950 under statutes appropriating $256 million for Greece and Turkey. Slightly over $55 million thereof has been allocated under Public Law 3296 to the Defense Department, as well as allocations covering remaining funds under Public Law 75.7 Further allocations will be made upon the bases now under study in the Department of State and the Department of Defense with respect to goals, objectives and troop and equipment levels required for Greece in the light of the cessation of major guerrilla action. In the interim, items unquestionably needed under any revised program are being programmed. It is estimated that the Greek military aid allocation for fiscal 1950 may be in the order of $160 million. Final determination of the exact figure is being expedited in order to make possible the obligation of available funds before June 30, 1950 and the adequate equipment of the Greek forces.

[Page 343]

Over 300 members of the Greek forces received training in United States service schools during the first five months of fiscal 1950, and this program is being continued.

Planning for fiscal year 1951 is commencing in the light of paragraph 32, NSC 42/1. The Department of State has currently under review the planning figure of $75 million for Greek military aid, which was incorporated in the global budget request for foreign military assistance in fiscal 1951 with the understanding that the planned Greek program for fiscal 1950 would be completed and the procurement of common-use items (estimated about $40 million) would be assumed by ECA.

United States military aid and advice enabled the Greek forces to defeat the communist guerrilla movement in the Fall of 1949. The number of guerrillas in Greece has been reduced from a one-time high of 28, 000 to under 700, a normal police problem for that country. Combat-fit guerrilla reserves outside Greece may total as high as 25, 000. Those in Bulgaria, variously estimated in the vicinity of 2,500–5,000, constitute the most immediate potential threat to Greece.

Greek Army strength was reduced from 196,000 on November 1, 1949 to 150,000 on January 1, 1950. Present plans call for reducing the Army to 80,000 and the present total of all uniformed services (200,000) to 124,000 by December 31, 1950. Substantial reduction is also planned in the present strength of the American Mission for Aid to Greece (600). The British service missions will likewise be reduced. Withdrawal of the British combat garrison from Greece has been completed.

Economic Aid

The ECA allocation for Greece for 1949–50 calls for the provision of $156.3 million in direct aid and $107.3 million in indirect aid. Of the former figure, $109.3 million had been allocated as of January 25, 1950 and purchase authorizations issued in the amount of $93 million. Between 60 and 100% of Greece’s drawing rights on other ECA countries for the current period have been utilized.

ECA assistance, American and British technical advice, and other developments such as the drachma devaluation of September 22, 1949 have kept the Greek economy on a reasonably even keel and permitted some reconstruction to go forward despite the guerrilla warfare. The termination of large-scale fighting has activated planning for further economic development.

By OEEC decision, the Greek ECA allocation for 1950–51 will be approximately equivalent to that of the present year. However, the ECA appropriation may be increased to provide for financing the [Page 344] procurement of certain common-use items heretofore supplied under the Military Assistance Program. Although the Greeks are not being encouraged to expect further financial assistance after June 30, 1952, it is improbable that Greece will have achieved economic viability by that date.

United Nations and Diplomatic Efforts

The United States has taken all feasible steps in the United Nations in support of Greek independence and territorial integrity and has continued to play an active role in the United Nations Special Committee on the Balkans. Resolutions on the Greek case and on the repatriation of Greek children, jointly sponsored by the United States and three other Powers, were adopted on November 18, 1949 by the General Assembly by respective votes of 50 to 6 (with 2 abstentions) and unanimously.

The United States has endeavored to foster improved relations between Yugoslavia and Greece without, however, making the extension of limited assistance to Tito conditional upon specific political commitments on his part with respect to Greece. We have likewise encouraged more cordial relations between Greece and Italy and the Near Eastern States, while avoiding any expressed or implied commitment with respect to proposed conventional security arrangements in that area.

Greek Internal Situation

Without directly intervening in Greek politics, we have endeavored to encourage stable, democratic and efficient government in Greece and fair judicial practices. The Coalition Government was maintained in office until January 10 [6], 1950, when it was replaced by a Service Cabinet in preparation for regular parliamentary elections scheduled for March 5, 1950. Termination of the guerrilla warfare enabled the Greeks to adopt broad clemency legislation. There have been no executions in Greece since September 30, 1949 and martial law has been lifted. With American advice, substantial progress has been made toward administrative decentralization and fiscal and civil service reform. We have encouraged the development of free trade unionism in Greece, both through Embassy and ECA officials and through AFL and CIO channels. Through these developments grounds for legitimate criticism of the conduct of Greek internal affairs have been lessened, although the functioning of the Greek governmental apparatus is likely to remain below western standards and to pose continuing problems.

ii policy evaluation

The action taken by the United States with respect to Greece, together with related developments, has so far prevented Greece from [Page 345] falling under communist domination and the ensuing adverse psychological and political results outlined in NSC 42/1. The principal related development was, of course, the Tito-Cominform rift, which led to the cessation of Yugoslav aid to the Greek guerrilla movement and contributed to its internal demoralization, and it may well have been this development which tipped the scales of victory in our favor. While this is a possibility, it is on the other hand a probability that Tito could not have undertaken or made good his defection had the United States adopted a less firm position in Greece and permitted the communists to take over that country. In this respect, United States policy in Greece has been successful beyond expectations.

It is improbable that the Cominform bloc has the immediate capability of resuming guerrilla operations against Greece on the former scale, and the reported dispositions of the guerrillas outside Greece indicate that such operations are not contemplated, at least pending resolution of the Tito defection. On the other hand, the Cominform would seem to retain the capability of instigating guerrilla forays into Greece from Bulgaria and Albania and might well consider it advantageous to do so in order to retard normalization and recovery. Abrupt or excessive curtailment of the American program of aid to Greece would tend to encourage both external communist pressure against Greece of this nature and internal communist maneuvers, and it would simultaneously undermine the moral and physical capacity of the Greeks to resist these pressures. Collapse of Greek morale and the Greek economy are the internal factors which would be most likely to bring about communist domination of Greece. The external factor most likely to threaten such communist domination would be the overthrow of Tito by the Cominform. On the other hand, rising living standards in Greece and any further defections from the Cominform bloc, particularly of Albania or Bulgaria, would greatly strengthen the Greek position. American policy should be guided by these considerations.

. . . . . . . . . . . . . .

James E. Webb
  1. Lot 63 D 351 is a serial master file of the National Security Council documents and correspondence and related Department of State memoranda for the years 1947–1961, as maintained by the Executive Secretariat of the Department of State.
  2. James E. Webb.
  3. James S. Lay, Jr.
  4. For text of the omitted portion of this report, see p. 1236.
  5. Foreign Relations, 1949, vol. vi, p. 269.
  6. Approved October 6, 1949; 63 Stat. (pt. 1) 714.
  7. Approved May 22, 1947; 61 Stat. (pt. 1) 103.