308. National Security Council Report1

NSC 5718/1


[Here follows a list of references.]

The National Security Council, the Secretary of the Treasury, and the Director, Bureau of the Budget, at the 333rd Council meeting on August 1, 1957, adopted the statement of policy on the subject contained in NSC 5718, subject to the amendment thereto which is set forth in NSC Action No. 1762–b.2

The President has this date approved the statement of policy in NSC 5718, as amended and adopted by the Council and enclosed herewith as NSC 5718/1; directs its implementation by all appropriate Executive departments and agencies of the US Government; and designates the Operations Coordinating Board as the coordinating agency.

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An Economic Annex, a Military Annex, and a Financial Appendix are also enclosed for the information of the Council.3

The enclosed statement of policy, as adopted and approved, supersedes NSC 103/1.

S. Everett Gleason 4
Acting Executive Secretary



General Considerations

Importance of Greece to the United States

1. Greece is important to the United States because of its strategic location, its proximity both to the Soviet Bloc and to the Near East, its membership in NATO, and its ties to Yugoslavia through the Balkan Pact. Together with its Balkan Pact neighbors, Turkey and Yugoslavia, Greece forms a land barrier to Soviet access to the Mediterranean. Also Greece has given the United States and NATO extensive base rights. Communications facilities and a USAF support group are maintained in Greece and are important links in our global network of bases.

International Political Orientation

2. Greek foreign policy is based on close ties with the United States and opposition to Soviet Communism. This has been shown by armed resistance against Communism (1947–49), active participation in the UN (Greek troops fought in Korea), and adherence to NATO (1951) and the Balkan Pact (1954). This Western orientation is based on its classic tradition and historical, personal and commercial bonds with the West.

3. As Greek economic strength and political stability have grown, national self-confidence has increased and Greece has taken a more independent and nationalist role. Greek nationalism has frequently sought, often successfully, to bring within Greece’s frontiers, areas inhabited primarily by ethnic Greeks. This irredentism, behind which the Greek Orthodox Church has generally been the main driving force, has found its principal expression recently on the Cyprus problem and has led to serious inter-allied tensions. These [Page 587] nationalist ambitions are tempered by a deep fear of Russia and distrust of Bulgaria, and a strong awareness that the United States is the only power which will protect Greece and not take advantage of it.

Greek Relations with the United States

4. While most Greeks know that in a real crisis their country must depend on the United States, their country’s economic recovery has permitted a sharp reduction in American aid and caused an increased sense of Greek independence. These developments have been healthy for Greek-American relations. Greece has been especially anxious to reduce the appearance of dependence on the United States. Thus on September 7, 1956, US-Greek status of forces agreements were revised on a basis more acceptable to Greek sensibilities.

5. Nevertheless, American prestige in Greece is far greater than that of any other foreign power. The Greeks look to the United States for leadership in world affairs and for political support, notably on the Cyprus question. Recent events in the Middle East, especially Soviet threats at the time of the Suez war, have emphasized the importance to Greece of its ties with the United States. While Greece gives general support to American efforts to resolve Middle Eastern problems and has given clear public endorsement to the American Doctrine, its attitude toward Middle East questions is influenced by its suspicions of Turkey and its fear of Turkey’s entrenching itself as the chosen instrument of US policy in the area. In addition, the presence of the influential Greek community in Egypt makes Greece unwilling to oppose Egypt directly.

The Cyprus Problem and its Consequences 5

6. Since 1954 the Greek Government has given active diplomatic support to the movement on Cyprus of Greek-speaking Cypriots demanding union of the Island with Greece (enosis). Some 80% of the Cypriots consider themselves to be of Greek ethnic origin. The Greek Government supports their claim that the principle of self-determination should be applicable to Cyprus. The Cypriot problem has become the dominant issue in Greek politics and foreign policy. It has absorbed the energies of the Greek Government, diverted attention from the problems of economic development, and caused the rigidity of Greece’s foreign policy and serious strains with its major allies. The Cyprus question, by sharpening Greek-Turk distrust, [Page 588] has been a large factor in preventing the development of the Balkan Pact among Greece, Turkey and Yugoslavia. At present Greece regards the Alliance as potentially important for both military and economic reasons, but claims that it cannot be developed until the Turkish attitude on Cyprus changes. Meanwhile Greek-Yugoslav relations have continued reasonably close, principally in the military sphere.

Internal Strengths and Weaknesses

7. By Greek standards there has been unusual political stability under fairly strong conservative governments since 1952. The Greek Communist Party is illegal and its underground group is under effective surveillance. Communism is not now an imminent threat to political stability. On the other hand, the Cyprus question and a Soviet friendship campaign in Greece have assisted Communist efforts to legitimize the Party and have contributed to some “neutralist” tendencies in Greek public opinion and politics. The extremely difficult Cyprus problem poses the most immediate threat to Greek political stability. Progress towards a solution acceptable to the Greek Government and the Greek Orthodox Churches of Cyprus and Greece, would facilitate a continuation of rule by the conservative and moderate groups. Greek frustration over Cyprus and differences between the Greek Government and the Greek Orthodox Church over the issue, might lead to a series of less stable governments still drawn primarily from conservative and moderate groups but subject to a varying degree of leftist influence.

8. The internal security forces are reasonably capable of handling Communist subversion inside Greece. The USSR has issued a severe warning against the stationing of nuclear-capable forces in Greece which the Greek Government has rebuffed. The USSR has also started a strong cultural offensive aimed at Greece. In handling Soviet overtures Greece is concerned by the strength and proximity of the Soviets. Also there is some feeling in the Greek Government that Soviet support on the Cyprus question should not be lost. Finally, a potential security problem is the presence in the Soviet Bloc of about 50,000 Greeks who left home or were abducted during the guerrilla war. Many have probably been indoctrinated and Soviet pressure for the return of all these Greeks would pose problems. So far only about 3,500 have been allowed to return and they have caused no serious difficulties.

Economic Problems and US Aid

9. Greece is poor and has limited natural resources. Half the people live on the land but only a quarter of the land is fit for [Page 589] farming. Industry is small and inefficient and largely depends on imported oil for power. Economic development has been retarded by repeated periods of warfare. Greek defense expenditures are heavy in relation to Greek resources. There is over-population in terms of the present level of development with resulting unemployment and underemployment.

10. However, the Greek economy has made a very substantial recovery since 1947 when Greece was on the verge of economic collapse. Living standards are now higher than prewar; crop and industrial production have increased 60% since 1940, while the population has increased 10%. The gross national product increased at an average of roughly 6% annually from 1951 through 1956, and per capita income about 4%. Currently the rate of increase in GNP appears to be approximately 4%. Greece has recently followed sound economic policies and has a relatively stable economy, although it has been running budgetary deficits, partly as a result of investment expenditures. In recent years, US aid, including P.L. 480, has enabled Greece both to finance a balance of payments deficit and to increase its foreign exchange reserves. Exports and earnings from services and remittances have more than doubled since devaluation in 1953.

11. Greek recovery since 1947 was made possible by a combination of substantial US aid and Greece’s own efforts. From June 1947 through June 1957 expenditures for all forms of US economic aid totalled approximately $1,491 million (average FY 1948–1951, $261 million; average FY 1952–1957, $74 million). It is estimated that US economic aid expenditures for defense support and technical assistance (the only forms of economic aid capable of current estimate) should be less in FY 1958 than in FY 1957. Even with recent economic growth at a rate which compares favorably with other Western European countries, per capita income is about $240, the lowest in Free Europe except Portugal. A continuing rate of economic growth is needed for the continuance of pro-Western Greek governments. External economic aid will be necessary to maintain such a rate of economic growth so long as the United States encourages Greece to continue defense expenditures at present levels. Reduction or elimination of such aid would probably compel a corresponding reduction in Greece’s defense effort.

12. Greece is a member of OEEC and has taken an interest in OEEC’s work in less developed areas. It has unofficially discussed with the OEEC a five-year development program. Greece realizes the importance of associating itself with the European Free Trade Area but as a relatively underdeveloped country sees basic difficulties in doing so.

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Military Problems and US Aid

13. Greece has committed its ground and air forces to NATO. Its naval forces, under national command, will be assigned NATO missions in time of war. Greece’s primary NATO mission is to provide maximum forward defense against Soviet attack from the north. Greek forces would also assist in defending the Straits area and would maintain internal security. The present strength of the Greek armed forces is: Ground Forces 106,000; Air Force 15,150; Navy 15,500.

14. Department of Defense approved force objectives for Greece are 11 and 13/3 infantry divisions, 1 armored brigade, 12 air squadrons and 54 combatant vessels. These force objectives have been met in terms of organization, but technical skills are seriously lacking and much equipment is obsolete. In the case of ground forces, current active forces provide only one-third of wartime strength and there is no effective training program for the reserves necessary to meet wartime strength requirements. The Greeks are good fighters. Greek forces are capable of maintaining internal security. They could provide limited defense against a satellite attack, but even if fully mobilized could provide only a relatively brief delaying action against a joint Soviet-satellite attack. Military planning against any Communist attack is, of course, within a NATO context.

15. The cost of Greece’s share in NATO’s defense is beyond Greece’s present ability to pay. Greece is devoting to defense about 5% to 6% of its GNP. The level of Greek defense expenditures has not risen as rapidly as GNP. Defense expenditures are about 28% of all budgetary expenditures (excluding those financed by US aid). The United States has financed, on the average, 20% of the Greek defense budget in the last three fiscal years. The US Military Aid Program provides virtually all of the dollar costs for military maintenance, replacement and modernization of the Greek armed forces. There is little likelihood that Greece will assume in the immediate future a relatively greater defense burden than she is now carrying.

16. US military aid programmed for Greece from 1947 through June 1957 approximated $1,150 million, of which an estimated $970 million was delivered by June 30, 1957. Compared with the military assistance program for FY 1957 of $51 million and deliveries of $60 million, the military assistance program for FY 1958 is currently estimated at $110 million and deliveries at $120 million.

17. Although the Greek Government has requested additional equipment which it believes vital to its defense, the United States has not yet made a commitment as to any specific future military aid program. Some consideration has been given to the deployment [Page 591] of a US nuclear-capable task force in the general area, possibly in Greece.


18. An independent and stable Greece, cooperating in Free World defense and maintaining the will and ability to resist Communist subversion and influence.

19. Access by the United States and NATO to military facilities in Greece, and Greek cooperation with NATO countries.

20. Greek armed forces capable of resisting, as part of a concerted allied defense, direct Soviet or satellite attack.

21. Improvement of Greek-Turkish relations, and Greek participation in the further development of the Balkan Pact.

22. Settlement of the Cyprus dispute.

23. Lessening of Greek irredentism.

24. A Greek economy which can support reasonable economic development and assume a larger share of the cost of the Greek defense establishment.

Major Policy Guidance


25. Taking account of other demands on US resources, help Greece to develop the long-term economic and military strength needed to assure its independence and resistance to Communist influence and subversion.

26. Continue to lend reasonable international political support to Greece, thus encouraging Greek recognition of the mutual benefits of association both with the United States and with the Atlantic Community.

Military and Economic Assistance

27. Continue during FY 1958 to support currently approved Greek force levels. Consider providing in the total military aid program for Greece for the period FY 1958–60 appropriate conventional equipment and recurring maintenance costs; and atomic-capable weapons systems, predicated upon her desire and ability to absorb, train with and maintain such systems as are contained in Military Assistance Programs and, if applicable, upon the granting of atomic storage rights to the United States. The United States should review the possibility of achieving a reduction in NATO-approved force levels for Greece and, in phase with the effective integration of advanced weapons in the Greek armed forces, appropriately revise Greek force levels in the light of NATO requirements.

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28. Without prior commitment to the Greeks, be prepared beyond FY 1960 to carry most dollar costs of military maintenance replacement and modernization of the Greek armed forces.

29. Make clear to the Greeks that the US military assistance and defense support programs are based on the assumption that Greece itself will make efforts to correct the weaknesses and deficiencies in its armed forces.

30. Limit the number of American official personnel, including dependents, to an operational minimum in order to avoid frictions resulting from the presence of large numbers of foreigners in a small country.6

31. Provide economic assistance (including P.L. 480 assistance) sufficient to aid Greece in maintaining the military posture outlined in paragraph 27 and in continuing a modest rate of economic growth.

32. Continue technical assistance to improve productivity and distribution, focusing on a few long-range projects and utilizing whenever possible the facilities of established American educational institutions in Greece.

33. Encourage the Greeks to maintain sound economic policies and preserve relative economic stability.

International Relations

34. Continue to exert influence on the Greek Government to reach an accord with the United Kingdom and Turkey for an equitable settlement of the Cyprus question.7

35. Encourage, as appropriate, Greek initiative in the further development of the Balkan Pact.

  1. Source: Department of State, S/SNSC Files: Lot 63 D 351, NSC 5718 Series. Secret.
  2. Not printed, (ibid., NSC Records of Action: Lot 66 D 95)
  3. None printed.
  4. Printed from a copy that bears this typed signature.
  5. See Supplementary Statement of US Policy Toward Settlement of the Cyprus Dispute, distributed separately on a limited basis. [Footnote in the source text. This statement is printed as an Enclosure to Document 256.]
  6. Early this year, the following numbers of American official personnel, including dependents, were residing in Greece: Defense, 2169; State 252; USIA, 292; ICA, 70; total, 2783. [Footnote in the source text.]
  7. See Supplementary Statement of US Policy Toward Settlement of the Cyprus Dispute, distributed separately on a limited basis. [Footnote in the source text.]