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

242. Memorandum From the Greek Government to the United States Government⁰

Athens, undated.

The Greek Government believes that the elections of 11th May have revealed certain developments in public opinion in Greece, which must be studiously examined and also coped with effective measures. Apart from the known political reasons, the low standard of living and employment and the lack of the conditions for an optimistic prospect of future development, as they are progressively made aware of, constitute the main cause of the manifestation of 11th May.

It is not possible to escape anyone’s attention that the political and defensive contribution of a nation depends upon both the morale of the people, and its means of defence, as well as the material means available for its life and economic progress.

Greece is determined to make every possible effort in order to sustain an increase of her political and defensive contribution; if however a solid economic substratum is not ensured for this endeavor, there is a danger that people’s resourcefulness will be shaken with a consequence that this effort will be put into jeopardy.

It is well known that defensive ability is directly related to the degree of military preparedness of a country as well as to the morale of its people. The morale of every people is affected from the overall economic situation and from optimistic or pessimistic expectations as to how the future will turn out to be.

With $240 annual per capita income and with about one-fourth of our country’s labour force either unemployed or underemployed, the need to take decisive measures in an effort to establish confidence in the future becomes evident.

For the confrontation of this situation, a decisive acceleration of economic development is deemed essential. Experience of recent years has shown once again that under the known strains and weaknesses of the Greek economy even a maximum domestic effort and mobilization of local resources cannot provide the warranted rate of progress without a positive and well-organized support from abroad and especially from the United States.

Sufficient and timely support would on the one hand make full use of all hitherto rendered aid, and on the other will contribute towards avoiding an economic impasse with unpredictable political consequences, the restoration of which would necessitate far greater sacrifices.

In view of the above, the Greek Government wishes to present the following proposals:

a) That, in view of the reduction by $23 m. of the country’s dollar reserves during 1957 and an anticipated increase of the level of imports by about $50 million, the sum of $10 million be put at the disposal of the Greek Government, within the fiscal year 1957–58.

b) That $35 million in global or tripartite P.A.’s be issued as defense support grants. Because of the fall of freight rates and the current American recession, without adequate aid a further reduction of the country’s dollar reserves must be certainly anticipated which would bring in its train cumulatively adverse consequences.

c) That any need of the Greek economy during the year 1958–59 in agricultural surpluses be met under Public Law 480.

d) That, considering the needs of the 5-year development program, some indication be given of current American economic aid if possible until 1962; otherwise a long-term view of the necessary investments, as it might be expected, would be very hard put to be effectively implemented.

e) That an immediate and positive answer is given to the proposals submitted about six months ago in connection to financial support from the D.L.F. first of the Nitrogenous Fertilizer and the Athens–Salonica road, and in succession of the Hydroelectric Plant of Acheloos and the Thermoelectric Plant of Ptolemais.

It is worth being noted that until about one year ago, the U.S. economic aid to Greece was of the order of $40–50 m. Its effective fall to about $20 million for Fiscal Year 1958 led to the consequential reduction of Greece’s dollar reserves during 1957 of about $23 million, a fall of about 12%.

The Greek Government would like to assume that her foregoing proposals will be met favourably and timely, in a spirit of mutual friendship and understanding of the immense difficulties laying ahead for both the Greek Government and the Greek people.

0. Source: Department of State, Central Files, 781.13/5–2958. Confidential. Sent to the Department of State as an enclosure to despatch 902 from Athens, May 29. In the despatch Riddleberger reported that Karamanlis handed him this memorandum during a May 26 discussion. Riddleberger reported on this discussion, which centered on the Cyprus issue, in telegram 3319 from Athens, May 26 (Ibid., 781.00/5–2658), and telegram 3323 from Athens, May 27 (Ibid., 411.8141/5–2758).