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

243. National Intelligence Estimate⁰

NIE 32–58

Washington, September 23, 1958.

THE OUTLOOK FOR GREECE’S STABILITY AND FOREIGN POSITION¹

The Problem

To estimate probable developments in Greece over the next few years, with particular reference to the implications of the Cyprus problem, Greece’s relations with the West and its role in NATO, and its orientation vis-à-vis the Soviet Bloc.

Conclusions

1. Prime Minister Karamanlis’ National Radical Union (ERE) won a clear parliamentary majority in the 1958 elections and may retain power for several years. However, there is a possibility that the elements composing ERE might disintegrate, making new elections necessary, although we believe the chances of this happening within the next two years or so are less than even. Moreover, Karamanlis himself might choose to resign at any time as a means of underlining dissatisfaction over the course of the Cyprus controversy. (Paras. 8, 12–13, 17)

2. The elections demonstrated a marked increase in the appeal of the extreme left, with the Communist-front United Democratic Left (EDA) more than doubling its previous vote and emerging as the principal opposition party. This weakening of the center, trending towards political polarization between the right and the extreme left, appears likely to continue. The forces represented by EDA may in the process gain as much as a third of the popular vote in future elections. (Paras. 9–10)

3. We do not believe, however, that EDA will gain any participation in the government within the next few years. In the event of Karamanlis’ resignation, any EDA bid for power would almost certainly be blocked through establishment of a Palace-backed anti-Communist coalition, or possibly by creation of an authoritarian regime based on military support. (Paras. 11–12)

4. A substantial factor in EDA’s growth is discontent over conditions of chronic unemployment, low living standards and lack of economic opportunities. There is little likelihood that the Greek Government can ameliorate these conditions unless it receives large-scale external economic aid. Whether or not it receives such aid, the government will nevertheless be under considerable pressure to embark on a sizeable program of economic development, although such a program would be a serious threat to the delicate stability of the Greek economy. (Paras. 14–16)

5. We foresee little chance that the Cyprus issue will be settled, during the period of this estimate, on terms sufficiently satisfactory to the Greeks to eliminate it as a source of severe strains in Greek relations with the UK and particularly with Turkey. The Greeks would respond bitterly to any moves by the UK that appeared to lead toward partition of Cyprus, and they are convinced that the present UK plan has this effect. If the UK goes ahead with the plan—as now appears likely— Greece’s reaction might include at least a partial disengagement from its NATO obligations. There would almost certainly be critical strains in Greek-Turkish relations if not a complete disruption, and the danger of wide-spread violence on Cyprus itself would be great. If the US publicly supported the present British plan, American influence in Greece would be seriously affected. (Paras. 17–23)

6. Barring an extremely serious deterioration of the Cyprus situation, Greece will probably remain active in NATO and continue to permit operation of existing US and NATO military facilities on its territory, and may even permit establishment of missile bases under NATO aegis. The growth of neutralist sentiment, however, and particularly Greece’s sense of disenchantment with its Western allies over the Cyprus issue will probably impel Greece to take a more independent line in NATO and UN affairs affecting Greek interests. This tendency would be modified though not entirely offset by increased US economic aid or markedly greater US sympathy and support for Greece on the Cyprus question. (Paras. 26–28)

7. Greece is not likely to prove receptive to Soviet political blandishments or to accept significant Bloc economic aid during the next several years. Greek trade with the Bloc, however, will probably continue to grow, and this, together with the present trend toward normalization of Greek-Bloc relations, may increase the popular appeal of neutralism. (Paras. 33–34)

[Here follows the “Discussion” section.]

0. Source: Department of State, INR–NIE Files. Secret. A note on the cover sheet reads in part as follows:

   “Submitted by the Director of Central Intelligence. 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 United States Intelligence Board on 23 September 1958.”

1. The present estimate is largely confined to Greece’s political stability and foreign policy. Much of the discussion of basic political, economic and military conditions and prospects in NIE 32–56, “The Outlook for Greece,” 26 June 1956, remains valid. [Footnote in the source text.]