881.00 R/12–851: Telegram
The Ambassador in Greece (Peurifoy) to the Department of State
2665. Ref Deptel 2691, Dec 5.1 Believe Paige has very detailed data on cuts which wld be required if level aid fixed at $170 [million?]. These include practical elimination substantial industry and mining programs as well as Ptolemais thermoelectric project. Our particular concern however is with drastic cuts, which wld also be required, in agricultural rehabilitation and land reclamation and perhaps also in power projects already under way. Such severe cut in these fields wld involve serious social and polit repercussions, cld hardly be without effect on milit posture, and wld certainly prolong period during which US wld have to supply large food and other consumption imports. We are also concerned, in view Greece’s vulnerable position, in proposed drastic reduction in pipelines.
We fully recognize problem created by heavy new demands from UK and others but nevertheless feel that 35 percent cut in aid this year wld be too sudden shock to Greek economy and to stabilization program on which we are now engaged. Additional $30 million required to taper off more slowly in fields mentioned above wld seem to be, in light existing level Greek milit forces, fully as necessary protection to western defense effort as heavy contributions we are proposing to make to meet new econ difficulties in western Europe.
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