781.5–MAP/8–2650: Telegram
The Chargé in Greece (Minor) to the Secretary of State
637. General Jenkins in L–6841 discussed question size cost GAF revised to meet altered international situation. ECA/G’s telegram 14111 discussed question from angle of reconstruction with particular reference JUSMAG estimate additional budgetary drachmae cost of 466 billion involved and indicated various alternatives for meeting this situation. I should like to offer following comments:
I recognize fact that military considerations at this time must be given priority. However in view most serious effect increase GAF on reconstruction effort and consequent more long range danger Greece will go Communist as result economic collapse I would wish to see matter most carefully considered and feel we should have firm policy guidance from Washington.
If it be agreed that any increases in GAF as proposed by Papagos and agreed by JUSMAG are essential we should go ahead with this without delay and without regard to budgetary situation. If this decision is taken I should like to suggest however that instead of announcing that reconstruction will consequently be curtailed Ave should make clear to Greek leaders and public our firm belief that cost of larger armed forces should be met by better collection of taxes and increase in direct taxation. This is how emergency is being handled in our country and I see no reason why it should not be tried here. We are well aware that tax collection in Greece is inefficient; the time has come to make a major drive in this direction. Surely the Greeks should be expected increase total revenues by 10 percent in national emergency.
We must of course be realistic in our own minds and hold back on construction commitments sufficiently so that reconstruction can in fact be curtailed later in year if efforts collect additional revenue are not successful. I believe however that appeal on patriotic grounds for higher taxes to support armed forces should be tried as nationalistic consideration involved give more hope of success on this basis than would increased taxation to provide for continuation reconstruction.
[Page 404]Porter will be in Washington August 28 and will be prepared discuss this subject with Department officials.