Foreign Relations of the United States, 1955–1957, Soviet Union, Eastern Mediterranean, Volume XXIV

297. National Intelligence Estimate¹

NIE 32–56

Washington , June 26, 1956 .

THE OUTLOOK FOR GREECE²

The Problem

To estimate the present situation and probable developments in Greece over the next three or four years, with particular reference to Greece’s probable role as a member of the Western alliance.

Conclusions

1. The next three or four years will probably see an increase in internal controversy and political maneuvering, in which leftist and neutralist elements will almost certainly gain strength. A return to a pattern of unstable multiparty coalition governments would provide the strengthened left with further opportunities for developing influence and popular support, particularly if new strains developed with the Western powers or economic conditions deteriorated. Nevertheless, it is unlikely that a Communist or Communist-oriented government will come to power in Greece during this period. (Paras. 24, 27–29)

2. Despite serious setbacks on the Cyprus issue, we believe the chances are better than even that the present Karamanlis government will be able to ride out opposition criticism between now and the next meeting of the UN General Assembly in November. Karamanlis’ chances for survival over a longer period will depend on his ability to show progress toward an understanding on Cyprus. (Para. 25)

3. Given a continuation of US aid at approximately present levels and sustained demand for Greece’s major export products, the Greek economy will probably remain relatively stable over the next few years. Its average annual rate of growth even with the continuation of present US aid will probably not exceed three percent, an increase insufficient to accomplish much toward raising the extremely low standard of living or relieving endemic unemployment and underemployment. There appears to be little likelihood that any Greek government will be able to carry out a program of economic development large enough to cause significant improvements in employment or in Greek living conditions during the period of this estimate. (Paras. 38–40)

4. Given a continuation of the Bloc’s present tactics of conciliation, some expansion of Greece’s economic dealings and other relations with the Bloc will take place, though not to the extent of making Greece economically dependent on the Bloc or of compromising Greece’s NATO status. (Paras. 42, 64)

5. Military facilities on Greek territory will probably remain available to the US and NATO. Present US military influence may decline as a result of the Cyprus and Turkish issues, although such loss would be counterbalanced to a large extent by Greece’s military interest in NATO and by its dependence on the US for military assistance. If fears of Communist aggression continue to recede, military expenditures are likely to be reduced somewhat within the next few years. (Paras. 40, 48–49)

6. Greece will probably retain its basic pro-US and pro-Western orientation, at least for the period of this estimate. Nevertheless, the absence of a Cyprus settlement will impose serious strains on the relations between Greece and its allies, particularly the UK and Turkey. Moreover, even if an understanding on the Cyprus issue is achieved, Greece will probably pursue a more independent policy toward the US and UK. (Paras. 57–58, 63)

7. We believe that there is about an even chance that some formula for the solution of the Cyprus problem will be agreed upon within the next year or two. Achievement of a Cyprus settlement, however, will at best be a difficult and delicate process which could easily be set back by insufficient flexibility on the part of the principals concerned or new flareups of popular feeling. (Paras. 60–61)

[Here follow the Discussion section of the Estimate, paragraphs 8–65, and Annexes A, Greek Political Parties and Groupings, and B, Development of the Cyprus Question.]

1. Source: Department of State, INR–NIE Files. Secret.

2. According to a note on the cover sheet:

   “The following intelligence organizations participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff.

   “Concurred in by the Intelligence Advisory Committee on 26 June 1956. Concurring were the Special Assistant, Intelligence, Department of State; the Assistant Chief of Staff, Intelligence, Department of the Army; the Director of Naval Intelligence; the Director of Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC, and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.”