Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 2

No. 917

868.00/8–151: Telegram

The Secretary of State to the Embassy in Yugoslavia ¹

secret

Washington, August 1, 1951—5 p.m.

121. Principles and mechanism fourth country approaches. Ref Deptel 497 to London, rptd Paris 491, Belgrade 79.² Ref Embtel 489 from Paris, rptd London 122 (not sent Belgrade).³

Order establish clear understanding this exercise, following outlines our views:

1) Coordination with Yugos: Yugos shld make initial approach all instances. When clearly evident Yugo approach is not succeeding participating govts shld make supporting approach. Prior Yugo approaches, participating govts shld have reached understanding with Yugos various aspects approach problem particularly special points requiring stress each individual country and timing approaches. Suggest Sept 30 target date completion initial approaches all countries.

2) Major points of emphasis for participating govts back-stopping Yugo initial approaches.

a) NATO Countries: Polit and mil importance Yugo to West and need stabilize Yugo economy. Also importance attached maintenance Yugo as evidenced by recent NATO resolution on econ assistance.

>b) Non-NATO countries: Econ aspects. Shld indicate coop all Yugo creditors necessary bring order into Yugo econ situation and that such coop will in long run improve (a) creditors econ stake Yugo, (b) chances ultimate repayment all debts, and (c) trade opportunities with Yugo.

3) Types assistance expected: Assistance shld consist any or all of three forms: grant aid (realize assistance this type probably negligible); debt payment postponement; supply assistance.

a) Re grant aid. Overall objective secure maximum contribution possible. At minimum desirable aim cover Yugo current trade deficit with country approached.

b) Re debt payment postponement. All debt payments, including interest, with fixed payments dates, swings, overdrafts, and compensation payments shld be postponed or alternately covered thru grant assistance.

c) Supply assistance. View short supply many commodities all fourth countries shld provide priority assistance. This particularly important view current critical state Yugo economy.

Draft presentation each fourth country shld include amt and type all debts plus present and proposed repayment schedule, importance of Yugo trade, and estimate what assistance fourth countries able or appear likely contribute.⁴

Acheson

1. Drafted by D. Smith and cleared with Gorlitz, Rawson of EE and Van Dyke of ECA. Repeated to Paris and London.
2. Telegram 497 reported that the Department of State was developing a program for approaching fourth countries, meaning countries other than the United States, the United Kingdom, and France, on the question of economic aid to Yugoslavia. In order to expedite this program, the Department recommended that the United States assume responsibility for approaching Austria, Germany, and Italy; that the United Kingdom deal with Belgium, Egypt, Argentina, and Sweden; and that France contact the Netherlands and Switzerland. (868.00/7–2051)
3. Not printed.
4. Once agreement with the general principles outlined in this telegram was received from Belgrade, Paris, and London, the Department of State recommended that joint discussions with Yugoslavia begin concerning fourth country approaches. It also suggested in telegram 147 to Belgrade, August 8, that Belgrade serve as the center for tripartite exchanges of view on the details of approaching individual countries. (868.00/8–651)