Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

120. National Security Council Report⁰

NSC 5805

Washington, February 28, 1958.

DRAFT STATEMENT OF U.S. POLICY TOWARD YUGOSLAVIA

General Considerations

U.S-Yugoslav Relations Since 1948

1. The Tito–Kremlin break of 1948 and the consequent departure of Yugoslavia from the Soviet bloc served U.S. interests through (a) the continued denial to the USSR of important strategic positions and other assets, and (b) the political effects, on both sides of the iron curtain, of a break in the “monolithic” Communist bloc.

2. In order to preserve these gains, the United States extended economic and military aid to Yugoslavia. This aid was of crucial importance in keeping the Tito regime afloat under severe Soviet pressures and—by indicating U.S. concern with Yugoslavia’s independence—in discouraging any Soviet inclination to attack Yugoslavia. A further U.S. purpose, as the military and economic aid programs developed, has been to utilize them to influence Yugoslavia toward closer political, economic and military collaboration with the West, and to encourage such internal changes in Yugoslavia as would facilitate this orientation.

3. The military aid program became in recent years a source of friction between the United States and Yugoslavia. In the United States the program was subjected to severe criticism in the Congress and by some segments of public opinion. Repeated suspensions or slowdowns in deliveries in response to Yugoslav foreign policy positions, and accompanying public statements in the United States, irritated the Yugoslav Government and embarrassed it in its relations with Soviet bloc countries. Finally, in December 1957, the Yugoslav Government apparently concluded that the rate and composition of U.S. arms deliveries no longer justified the difficulties the program caused in its foreign relations, and it therefore decided henceforth to depend on purchases of military equipment.

4. U.S. military grant aid to Yugoslavia was terminated in December 1957, in accordance with Yugoslavia’s request. At that time, the total grant aid military assistance programmed for FY 1950–1958 amounted to $745 million, plus excess stocks valued at $28 million. Of this programmed amount, virtually all of the excess stocks had been delivered by 31 December 1957, and it is estimated that about $681 million of the regular program had been delivered by that date. The undelivered balance of $64 million included a substantial amount of ammunition, vehicles and artillery, 4 minesweepers, and 137 jet aircraft. In addition, 153 other jet aircraft, valued at about $40 million, were scheduled to be delivered to Yugoslavia from MAP inventories in possession of other recipient countries. These aircraft are not included in the $745 million total program, or in the undelivered balance. The Yugoslavs have indicated, subsequent to their request to terminate the grant aid program, that they hoped in the future to be able to purchase such spare parts and supplies as they might require.

5. U.S. economic aid since the Tito-Kremlin break, including that programmed for FY 1958, has totaled $783 million of which approximately $695 million has been expended.¹ This aid has fallen broadly into two categories: (a) raw materials as defense support, and (b) food, to meet the problems caused largely by serious droughts and chronic food deficit conditions. In the last three fiscal years U.S. economic assistance has consisted largely of sales of U.S. surplus agricultural commodities under P.L. 480.

6. As a by-product of these economic aid programs, the United States has accumulated the equivalent of some $57 million of Yugoslav currency (i.e., dinars) for U.S. Government use. Substantial additional amounts may be expected to accrue as sales of surplus agricultural commodities and other forms of economic aid continue. Ordinary U.S. uses for Yugoslav currency are only about $1 million per year, and special programs which have been considered to date for the use of this currency would utilize only a small proportion of existing holdings. The use of these holdings to acquire substantial amounts of commodities in Yugoslavia would counteract the effect of current programs in support of Yugoslavia’s balance of payments.

6–A.² In addition to dinar holdings reserved for U.S. uses, the United States also, as a result of these aid programs, has obtained or will obtain title to dinars in an amount nominally equivalent to nearly $300 million, which are available for loans or grants to the Yugoslavs. U.S. delay in disbursing promptly these funds in financing appropriate economic development projects in Yugoslavia is creating friction with the Yugoslavs.

Soviet Policy toward Yugoslavia

7. After the death of Stalin the USSR gradually undertook to “normalize” relations with Yugoslavia, which since 1948 had been characterized by Soviet dedication to the overthrow of Tito’s regime. The new Soviet leaders, especially Khrushchev, apparently believed that the split with Yugoslavia was one of Stalin’s major policy failures and that the prospective gains from a rapprochement outweighed such possible dangers as Yugoslavia’s potentially disruptive influence on the Soviet bloc. Although progress toward “normalizing” Soviet-Yugoslav relations was interrupted in 1956 by events in Poland and Hungary, meetings between Yugoslav and Soviet leaders in 1957 led to rapid improvement in relations and the renewal of agreements in principle on trade and credit arrangements and on party and state relations. After the sudden removal of Zhukov and the reassertion of Soviet primacy in the Communist world following the Moscow celebration of the 40th Anniversary of the Bolshevik revolution, Yugoslav leaders reassessed their position vis-à-vis the USSR. Since that time relations between the two countries again cooled, but it now appears that they are being conducted on a “correct basis”.

8. The ultimate objective of Soviet strategy toward Yugoslavia is probably the reassertion in some effective form of Soviet control over that country. For the shorter term the Soviet objectives are probably (a) the effective neutralization of Yugoslavia so that it will not maintain security ties with the Free World and so that its armed forces and terrain will be denied to the United States and its allies, (b) the re-establishment of close party and state relations with Yugoslavia, (c) exploitation of Tito’s voluntary alignment with the USSR on most international issues to rally support among uncommitted nations for certain broad Soviet foreign policy objectives, and (d) increased Yugoslav economic dependence on the Soviet bloc.

Development of Yugoslav Policy

9. Consistently since 1948 Tito’s main purpose has been to preserve Yugoslavia’s independence and his regime. In the period of extreme Soviet pressure, for example, he attempted to assure himself of military support from the West in case of war and found it expedient to obtain Western aid. Tito remained cautious, however, and tried to maintain as much freedom of action in foreign affairs as his difficult external and internal situation allowed. With the change of Soviet leaders after Stalin’s death and the emergence of Khrushchev as the leading figure in the Kremlin, Tito apparently became less fearful of the possibility of a Soviet attack. Moreover, despite some misgivings, he apparently interpreted Soviet moves as signalizing Soviet acceptance of Yugoslavia’s independent position and as contributing to relaxation of tensions. Tito apparently felt impelled toward greater cooperation with the USSR by a need to counter the weakening of Communism as a system of government in Eastern Europe. He also recognizes that in the West, particularly in the United States, there is a basic hostility toward any Communist regime and a consequent danger that excessive exposure to Western influences would increase his internal security problems.

10. The Yugoslavs will probably resist any Soviet attempts to assert hegemony over them, and will continue efforts to exert an influence on developments within the Communist world. They will continue to insist upon recognition for the doctrine of “separate roads to socialism”, which presupposes a situation of equality, independence and non-interference. Something more than ideology is the stake here; the Yugoslavs have shown themselves sensitive to the military threat to their own security posed by Soviet forces at their border and would prefer to have their neighbors to the East serve as independent buffers between themselves and the USSR.

11. In addition to resisting Soviet hegemony, Yugoslavia also wishes to avoid too close association with the West. Yugoslavia probably hopes that such a course will (a) avoid the dangers to the maintenance of Communist rule in Yugoslavia which might result from swinging too far to the West; (b) promote its influence in world affairs by permitting closer ties with such countries as India, Ceylon and Indonesia; (c) improve its posture for influencing developments in the satellites, which can be done better as an independent Communist state not too closely associated with the Western powers; and (d) contribute to its efforts to reduce the dangers of a nuclear war between the United States and the USSR which the Yugoslavs believe would spell disaster to Yugoslavia and the Tito regime.

12. The top Yugoslav leadership, under Tito, has been cohesive and united in its determination to pursue an independent course. Although efforts toward rapprochement with the USSR in 1957 apparently caused some uneasiness among Party leaders, who feared that Yugoslav national interests might thus be injured and independence unwittingly compromised, their attitude appeared to be more apprehensive than disaffected. Among the Yugoslav people, the great majority of whom are anti-Communist, there appeared to be some anxiety lest Tito’s maneuvers lead to a tougher line at home and a serious falling out with the West, thus causing a sharp decline in Tito’s personal prestige as the man who resisted Nazi Germany, and defied Stalin. As long as Tito can prevent Soviet encroachment, however, and avoid a severe reduction of Western aid and support, he and his immediate colleagues will almost certainly retain their hold on the Party and the people. On the other hand if Western aid and support should be cut off, Party dissension would probably grow, public antagonism—now latent—would increase, and the Yugoslav economy would be subject to new strains. In this event the regime would probably be forced to rely more and more on repressive controls.

13. One of Yugoslavia’s ultimate objectives in world affairs is probably the establishment of a world order of independent Communist states. The immediate objectives of Yugoslav policy are probably (a) a relaxation of world tensions in order to relieve pressures on Yugoslavia from either the Soviet or the Western bloc, (b) strong Communist regimes in Eastern Europe whose relations with the USSR would be based on principles of equality, independence and non-interference, and (c) the establishment of conditions in Eastern Europe and elsewhere which will enable Yugoslavia to exert an effective influence.

U.S. Interest in Yugoslavia

14. U.S. policy in support of the maintenance of Yugoslavia’s independence constitutes an integral part of the broader U.S. policy which has as its objective the eventual attainment of complete national independence by all of the Eastern European satellites. The example of Yugoslavia, which has successfully maintained its independence of Soviet domination, stands as a constant reminder to the satellite regimes, serving as a pressure point both on the leaders of these regimes and on the leadership of the USSR. Moreover, it appears that Yugoslavia has encouraged certain leaders in the satellites to seek greater independence from Moscow. It is difficult to assess fully Yugoslavia’s potential for influencing satellite leaders; but in view of Yugoslavia’s known efforts in this direction, notably in the Polish and Hungarian events of 1956, it is in the U.S. interest to exploit Yugoslavia’s role in Eastern Europe, so far as it tends to advance U.S. objectives.

15. U.S. aid has well served the minimum U.S. objective of keeping Yugoslavia independent of the Soviet bloc. However, a more farreaching objective—tying Yugoslavia into the Western defense system and ensuring its effective contribution to Free World power in case of war in Europe—has not been achieved. In case of general war, Yugoslavia will probably remain neutral as long as the situation permits, and Yugoslav forces will be used as the Yugoslav leadership deems appropriate to promote national interest and not necessarily in support of NATO. It would probably refuse permission for foreign troops to pass over its soil during any war in which Yugoslavia remains a non-belligerent. Should the Soviet Union overreach itself, however, or should some new crisis arise comparable to the Korean War or the Hungarian uprising, Yugoslavia may again find itself in serious disagreement with the Soviet Union.

Objectives

Short-Term Objectives

16. An independent Yugoslavia outside the Soviet Bloc, capable of withstanding Soviet political and economic pressures, not actively engaged in furthering Soviet Communist imperialism, and with a potential for weakening the monolithic front and internal cohesiveness of the Soviet Bloc.

17. Without jeopardizing the above objectives, reorientation of the Tito regime in the direction of political and economic liberalization and closer Yugoslav ties with the West in general and Western Europe in particular.

Long-Term Objective

18. Eventual fulfillment of the right of the Yugoslav people to live under a government of their own choosing, which maintains peaceful and stable relations with neighboring states, and participates fully in the Free World community.

Major Policy Guidance

19. Encourage the Yugoslav Government and people to continue to stand firmly for maintenance of Yugoslavia’s independence in the face of Soviet pressures or blandishments.

20. Use Yugoslavia’s position as an independent Communist state in Eastern Europe to promote the weakening of the monolithic front and internal cohesiveness of the Soviet Bloc.

21. Furnish economic and technical assistance to Yugoslavia in the minimum amounts needed for either or both of the following primary purposes:

a. To encourage Yugoslavia to pursue policies which will contribute to the attainment of U .S. objectives.

b. To assist Yugoslavia in avoiding undue economic dependence on the Soviet Bloc.

To the extent possible without prejudicing the above primary purposes, such assistance should also attempt to influence Yugoslavia to give greater play to free economic forces within Yugoslavia. In any event, in extending assistance the United States should avoid actions which could be interpreted as unreserved endorsement of the Tito regime on the one hand or which, on the other hand, would encourage attempts to overthrow that regime by violence.

22. Develop closer cultural ties between Yugoslavia and the nations of the Free World, particularly those of Western Europe. Seek to establish both officially and privately sponsored programs for an expanded exchange of U.S. and Yugoslav students, intellectual leaders, and private individuals. In ways consistent with the internal security of the United States, seek to expedite procedures to effect entry of suitable Yugoslav non-immigrants into the United States. As the United States expands exchange with the USSR (e.g., the U.S.-USSR cultural exchanges agreement), avoid creating the impression that the United States is losing interest in developing such ties with Yugoslavia.

23. Increase contacts with government and party officials in Yugoslavia, including high-level officials, and encourage mutual visits, in order to counteract the effect of extensive Yugoslav exchanges with the Soviet Union.

24. a. Continue to permit the training of limited numbers of Yugoslav military personnel on a grant or reimbursable basis as appropriate.

b. Continue to permit the Yugoslavs to purchase [, or obtain on a grant basis in appropriate cases,]³ such U.S. military equipment and supplies as may be needed to avoid dependence on the Soviet Bloc, as long as satisfactory U.S.-Yugoslav political relations continue to exist.

c. If Yugoslavia obtains sizeable amounts of Soviet Bloc arms or enters into licensing agreement for the extensive manufacture of Soviet Bloc arms, or accepts substantial Soviet Bloc military assistance, reexamine U.S. programs affecting Yugoslavia.

25. Recognizing that the Balkan Pact is dormant, encourage the development of closer Yugoslav relations with Greece and Turkey in economic, cultural and related fields of activity as a means of weakening Soviet power in the Balkans.

26. Consider Yugoslavia on the same basis as free European nations in evaluating Yugoslav requests for U.S. export licenses so long as Yugoslavia’s export control practices are generally consistent with the objectives of the multilateral trade controls imposed against the Soviet Bloc.

27. Utilize opportunities for cooperation in the unclassified, peaceful uses of atomic energy, including the training in the United States of Yugoslav scientists in non-sensitive fields. Give those U.S. departments and agencies with export control responsibilities discretionary authority as regards the licensing for export to Yugoslavia of reasonable quantities of materials and equipment obviously intended for:

a. Basic research and instruction in the atomic energy field (including cooperation under any eventually concluded agreement for U.S. assistance in furnishing Yugoslavia with a research reactor and fissionable materials therefor, and related laboratory equipment).

b. Source material (e.g., uranium) exploration.

c. Medical or normal industrial use.

28. Direct information policy toward building Yugoslavia’s will to combat Soviet encroachment and to encourage ties to the West while:

a. Avoiding endorsement of the internal policies of the Tito regime and taking account of the Yugoslav people’s hope for eventual attainment of greater political and economic freedom.

b. Avoiding antagonizing the Tito regime to the point of jeopardizing realization or our immediate objectives.

[1 paragraph (13 lines of source text) and footnote (4 lines of source text) not declassified]

0. Source: Department of State, S/S–NSC Files: Lot 62 D 1, NSC 5805. A Financial Appendix is not printed. NSC 5805 was prepared after a review of NSC 5601 by the National Security Council on December 24, 1957. See Foreign Relations, 1955–1957, vol. XXVI, pp. 707–714 and 801. NSC 5805 was discussed by the NSC on April 14; see Document 122.
1. Consists of $380 million in Defense Support, Direct Forces Support and Technical Exchange; $222 million under Title I and $28 million under Title II of P.L. 480; and $65 million under the FY 1951 Emergency Food Relief Assistance Program. [Footnote in the source text.]
2. This paragraph falls on page 4 of the source text, which bears the typewritten notation: “Revised 3/3/58.” Presumably paragraph 6–A was added at that time.
3. JCS-ODM proposal. [Footnote and brackets in the source text.]