144. Telegram From the Embassy in Yugoslavia to the Department of State 0

1041. Joint Embassy/USOM message. For State, ICA and DLF. Reference: Embassy’s telegram 1029.1 Subject: Yugoslav request for credits.

In accordance last sentence, fourth paragraph from end Embtel 1029,2 have initiated arrangements with Foreign Secretariat (Markovic) for our review with Yugoslavs all matters relevant Todorovic request. Markovic agreeable this procedure but expressed concern on delay involved responding Todorovic request. He noted Todorovic requested reply soon as possible in view fact Yugoslav plans affected by our decision. He also noted Todorovic requested credits for Kosovo and Trebisnjica by July 1.

We indicated that decision Kosovo and Trebisnjica dependent on magnitude DLF Congressional appropriation currently being sought by administration and not contingent in our judgment on review we now intending to undertake with Yugoslav Government. We indicated, however, that we doubted Washington would be prepared approve credits beyond Kosovo and Trebisnjica without Embassy recommendations and that we did not feel we could make such recommendations until review in question completed.

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In accordance foregoing, would appreciate decision on Kosovo and Trebisnjica soon as possible after funds situation clarified.

As far as balance Todorovic request concerned, would appreciate any preliminary views you may have on proposal. Such views would be helpful for us in our review matter here, including discussions Yugoslavs.3

  1. Source: Department of State, Central Files, 768.5–MSP/5–1659. Confidential.
  2. Telegram 1029, May 13, summarized the May 12 conversation between Rankin and Todorovic (ibid., 768.5–MSP/5–1359); see Document 143.
  3. It reads: “I indicated we would send aide-mémoire to Washington with our sympathetic comments and suggested that members of our staff get together with officials in Foreign Secretariat or whomever else Vice President may designate to review Yugoslav needs, see how much credit Yugoslavia can effectively utilize annually, review assistance other countries might provide, and consider any other relevant related problems.”
  4. In telegram 751 to Belgrade, May 23, the Department of State reported that while chances of DLF funding for the Trebisnjica project had greatly improved, final agreement on the project before July 1 was unlikely and that no action had been taken on the Kosovo project and Export-Import Bank loan request. (Department of State, Central Files, 768.5–MSP/5–1659)