289. Telegram From the Office of the Representative to the North Atlantic Treaty Organization to the Department of State1

Polto 618. Re Athens 10162 repeated Paris 83. Foreign Minister Theotokis spent hour and half with me this morning. It was clear that his main objective was to lay before U.S. Greek requirements for additional economic assistance, preparatory to making similar request when he sees the Secretary. He did not touch on specifics of Greek difficulties with Turkey until end of conversation and then only in response to queries from me.

Theotokis, after mentioning that Ambassador Cannon had suggested he call on me, led off with summary of current political situation. Gist his remarks was that, with elections scheduled next year (he was not responsive to my query regarding date), government is faced with prospect of going before electorate amongst whom neutralist sentiments are growing with Communist encouragement, and who are increasingly questioning need to maintain armed forces at present level which takes 30 percent of Greek budget. Added to this is public feeling that United States has “let Greece down” and abandoned its democratic principles in United Nations vote on Cyprus.

To combat these tendencies present government, who are being called “westerneers” by large segment of public, urgently need additional economic aid from United States. There is an unfavorable balance of payments situation, but Theotokis thought this manageable. The main need for assistance is in connection with (a) budget [Page 551] deficit of about 10 percent and (b) economic development program. This necessary to curb inflation, with its inevitable effects at the polls, and give public hope for future improvement in standard of living. All this calls for an increase, according to Theotokis figures, in United States economic aid from present level of about $40 million to $61 million, including certain amount of surplus agricultural commodities. Moreover swift action is essential if desired political effects are to be achieved. Finally, Theotokis stated he was specifically instructed by Prime Minister Karamanlis to say that aid must be in form of grant not loan.

In addition to economic aid, Theotokis made plea for OSP contracts to permit ammunition factory to continue operations, existing orders being near completion.

I told Theotokis I would report his remarks to appropriate quarters but presumed he aware this organization had no supervisory functions respecting country aid programs. Re OSP explained difficulties facing this program as ammunition build up nears completion and need arises to put production facilities on standby basis.

In discussing political prospects, Theotokis referred to need for “normal international relations”, as well as economic aid. In response my query what this involved, he said resolution of Cyprus problem and difficulties with Turkey. I ventured opinion former not likely be brought about prior to election. He seemed to agree but responded gulf between British and Greek positions “deep but not very wide”. So far as difficulties with Turkey are concerned it was plain his main preoccupation was with 2 ceremonies in Izmir (see earlier telegram3) and he implied that if Turks carried them out “moral rehabilitation” Greece would be complete. Re compensation Theotokis was much less clear. He agreed problem compensating 5 Greek officers Izmir on way solution but he was vague as to other claims. Called Turkish offer $300,000 (his figure) for orthodox churches Istanbul ridiculously small.

Though text Topol 4484 not available before meeting, I urged on Theotokis necessity for moderation in present situation and told him that Greeks, through their apparent unwillingness accept Turkish efforts make amends were losing much of sympathy which NATO partners had originally felt for them. Theotokis did not [Page 552] appear impressed and responded rather emotionally by reference to Turkish failure live up to “gentleman’s agreement” to carry out 2 Izmir ceremonies reported separately. Said inter alia would be out of question for him to attend Balkan pact Ministerial meeting, which must be held before end of year, unless satisfaction obtained this point.

  1. Source: Department of State, Central Files, 740.5/10–2255. Secret. Repeated to Athens and Ankara.
  2. In telegram 1016, October 20, the Embassy suggested that it would be “most useful” in strengthening the Greek Government if Dulles would agree to meet with Theotokis in Paris. (Ibid., 110.11–DU/10–2055) Dulles, who was in Paris en route to the Foreign Ministers meeting in Geneva, October 27-November 16, met with Theotokis on October 24. The following record of the conversation was transmitted to the Department:

    “During talk October 24 with Greek Foreign Minister, I assured him that we would take no precipitate action on any Turkish request for special economic aid. He apparently feared that we had under contemplation large scale aid in response to pleas he understood Turks had made to us. At present time favorable response by us would be interpreted, according to him, in Greece, as inordinate sympathy for Turks. He indicated, however, that if some additional aid to Turkey in future were tied to Turkish reimbursement Greek claims for September riots, would kill two birds with one stone. I assured him we would take no action without regard to Greek sensibilities and in referring to substantial number impending elections among our friends, mentioned we have one coming up ourselves.” (Secto 25 from Paris, October 25; ibid., 782.5–MSP/10–2555)

  3. In Polto 617, October 22, Perkins forwarded information regarding Turkish ceremonies planned for Greek Army officers whose homes were attacked during the anti-Greek rioting at Izmir on September 6. (Ibid., 740.5/10–2255)
  4. In Topol 448, to Paris, October 21, the Department noted that it hoped that the meeting with the Greeks would provide an opportunity to emphasize the Department’s concern over the current situation “with its disruptive effect on NATO” and its belief that it was now time for them to begin to resume their “full participation” in NATO activities. (Ibid., 740.5/10–2155)