781.5 MSP/3–552: Telegram

No. 424
The Secretary of State to the Embassy in Greece1


4266. Dept fully shares ur views concerning necessity establishing policy agreed by all agencies concerned upon Grk econ program, including targets in anti-inflationary drive (Embtel 3980, Mar 5).2 Recognize that lack of agreement cannot fail have very adverse effect upon attainment US objectives in Greece.

Dept believes desp to Greece of interdepartmental group discussed by you with Kenny can serve extremely useful purpose in bringing about such an agreement, and hopes it can be sent in near future. Expected Dept Rep will be included. Meanwhile, however, essential current policies not unduly impede minimal operations in Greece. MSA’s Musto 2343 authorizes immed release fifty billion drachmae for purpose of mtg unpaid obligations already incurred, and establishes three hundred billion drachma program for total releases Jan 1 to June 30. Auth will be given for releases pursuant any sched recommended by MSA Greece, subj conditions (a) and (b) para 5 of tel. Effect of this will be to break present impasse upon releases, and will provide some flexibility in planning for immed future.

Wld appreciate ur advice soonest re effect which this arrangement will have upon Mission planning, and whether it is acceptable at least as an interim arrangement pending results of survey group. If in ur considered judgment arrangement, even on interim basis pending survey group, wld be detrimental to US interests Dept prepared discuss with MSA such alternatives as are deemed essential in light of all pertinent factors, including essentiality of realistic approach to problem of econ stability.

  1. Drafted by Rountree, cleared with Berry, and signed by Acheson.
  2. Telegram 3980 reported that Lapham had considered resigning because of MSA policy of financial compression, reducing the counterpart fund program to 300 billion drachmas for January to June. (781.5 MSP/3–1152)
  3. Not found in MSA files.