259. Telegram From the Embassy in Greece to the Department of State0

2720. Paris for USRO, Thurston and CINCEUR.

1.
CT concerned at indications its lack success in making clear to Washington agencies situation of confusion and frustration we are creating here by policies which continually increase military requirements without apparent regard for rigid limitations on local financing capability. Most recent indication this failure is Defense 960172 from OASD/ISA to USCINCEUR, repeated JUSMAGG Athens,1 which suggests that [Page 660] $711,648 Nike housing and utilities costs be financed from $12 million allocated to other material.
2.
Essential facts of Greek defense budget situation, repeatedly set forth by country team, are, in simple terms, as follows. We do not believe Greeks will exceed self-financed military budget around $135 million in 1959, and given local economic situation we do not feel they should. This amount plus US contribution of $30 million ($18 DS, net, and $12 million other material) will not adequately and effectively sustain conventional forces required by program for realizing MC–70 goals. Utilization of above cited funds to meet additional requirements of special weapons program can only result in further retardation of progress in development of conventional forces.
3.
We can not continue to impose additional defense burdens on country which is unable to bear its present load. US must either arrange finances special weapons program in manner which does not involve additional costs to Greeks, or MC–70 goals for conventional forces will fall even further short of realization. If latter alternative must be accepted obvious better if fact explicitly recognized by US, Greece and NATO and appropriate adjustments made in goals. This type of adjustment will obviously take time, and until it can be made, we feel strongly that US should not offer Greece additional advanced weapons unless provision made to finance local costs as well as hardware.
4.
With respect to programs already initiated for Nike [less than 1 line of source text not declassified] believe that to extent local costs not covered by NATO infrastructure, US must provide additional funds—i.e., over and beyond $18 million DS (net) and $12 million DS already committed FY 1959.
Berger
  1. Source: Department of State, Central Files, 781.5–MSP/5–2959. Secret. Repeated to Paris.
  2. Not found.