768.5 MSP/8–2552: Telegram

No. 648
The Ambassador in Yugoslavia (Allen) to the Department of State


233. Discussions in Bled concerning tripartite econ aid terminated August 23 with full agrmt among US, UK, Fr and Yugo reps here.1 Text being telegraphed separately.2 Dep Fon Mins Mates and Crnobrnja who represented Yugo Govt and had full power express concurrence on behalf of Yugo Govt, stated Yugo Govt’s formal agrmt to text.

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Several confs were held among US, UK and French reps to draft text for submission to Yugos, but final document is considered as having been drafted by reps of four govts. US, UK and French reps emphasized text was subject to approval by their govts, and Brit and French Ambs pointed out that several weeks might be required for action in London and Paris since Cabinet level approval might be necessary.

We believe final text contains substance of all requirements of July 10 aide-mémoire. As re capital investment Yugos showed concern over our insistence on establishment of priorities. Considerable discussion centered around our criteria, especially re ability of an industry to compete in world trade. Yugos are afraid three govts might apply latter criterion to hamper industrialization. Yugos showed special concern re milit industries which might not be able compete in world trade. I insisted on inclusion of all criteria mentioned in July 10 aide-mémoire but agreed to qualification that certain criteria wld be applicable “where appropriate.”

Principal discussion concerning external debts revolved around question of conf of creditors. At first Yugos were reluctant to include any ref to such conf but yielded to our insistence.

Sharpest difference arose over requirement that Yugo Govt must consult us re future loans outside IBRD. Mates tried hard to get us accept oral assurance of such consultation, asserting that in practice Yugo Govt wld have consult us anyway since it had little or no chance of obtaining such loans without our help. He objected to including commitment to this effect in written document which might be published and wld appear as infringement of Yugos sovereignty. We insisted that written commitment on this subject was necessary and Yugos agreed to statement four govts wld exchange views whenever occasion for loans outside IBRD arose.

Mates and Crnobrnja reiterated several times Yugo Govt wished incur as few foreign debts as possible and much preferred to obtain all credits for capital investment from IBRD. Statement in final text that three govts have agreed in principle support IBRD loan now under consideration was included at Brits suggestion, in belief it wld favorably impress Yugos and overcome reluctance to your provisions re future loans. Richard Allen and I were hesitant about this document but we see no strong objection to it if Dept and MSA concur.

I hope US auths approve text and will make this known to Brit and French as soon as possible in order encourage them to act promptly.

  1. Discussions of the tripartite aide-mémoire of July 10 and the Yugoslav Government’s reply of July 28 took place in Bled, Yugoslavia, on Aug. 16, 22, and 23. Regarding the aide-mémoire, see footnote 3, Document 641. The Yugoslav reply was transmitted to the Department of State in telegram 114, July 29. (768.5 MSP/7–2952) Richard F. Allen represented the United States, Mudie the United Kingdom, Ambassador Challet France, and Mates, Crnobrnja, and Kopcok Yugoslavia. Prior to the quadripartite meeting on Aug. 16, the three Western powers met separately and prepared informal notes setting forth their views regarding the conditions governing aid to Yugoslavia. Copies of these informal notes were given to the Yugoslav Delegation at the Aug. 16 meeting. A copy of these notes, plus the informal minutes of the Aug. 16 meeting, were sent to the Department of State as attachments to despatch 149 from Belgrade, Aug. 28. (768.5 MSP/8–2852) The discussion at all three quadripartite meetings was summarized in telegram 254 from Belgrade, Aug. 28. (768.5 MSP/8–2852)
  2. See telegram 236 from Belgrade, infra.