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

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

Athens, September 16, 1959, 7 p.m.

748. Paris for Finn. References: (A) Circular 236, September 9; (B) Priority 734, September 10.¹

1. Tentative FY 1960 MAP outlined reference (B) may permit maintenance of Greek armed services at approximate level of effectiveness attained by end of 1959, but will not make possible any significant progress toward ultimate MC–70 or MAP goals. However, if proposed allocation of $5 million “other matériel” is not supplemented by an increase in defense support funds to at least $30 million or more, there will be some regression in training and manning standards, and consequent deterioration in general level of military effectiveness.

2. Substantially reduced FY 1960 MAP will probably not have immediate dramatic impact on US political objectives here because nature and extent of cut-backs will become apparent only by degrees, will not receive public attention, and will reach political leaders at second hand from military planners who will absorb full shock. From political as well as economic viewpoint (see paragraph 3 below) it is defense support program rather than MAP which has principal significance here since amount this program is publicized and tends to become index in Greek eyes of degree of support they are receiving from US. However, there will probably be important long-range effects of political significance. In respect MC–70 goals Greek feeling of frustration and futility will be intensified as gap widens between objectives and military and financial resources available for meeting them. Obviously, it will become more difficult to maintain fiction that MC–70 goals are being realized, and this in turn will tend to generate a cynical attitude to NATO and to US–which are closely identified in Greek mind.

3. Chronic foreign exchange limitations are such that it unlikely Greeks will increase their own military spending in order to purchase equipment not furnished under MAP, and economic consequences cutback in matériel deliveries therefore negligible. However, decrease in “other matériel” allocation, as compared with FY 1959, unless accompanied by corresponding increase in defense support funds, will pose budgetary problem. In absence such increase Greeks will have to choose between an additional contribution to military budget to permit maintenance of military establishment at present level of effectiveness and requirements of public investment. This will be politically difficult choice, and danger is they will attempt satisfy both at risk of generating additional inflationary pressure.

4. Aid effect on US security objectives indicated in foregoing paragraphs.

5. Implications for other US programs–notably defense support–indicated paragraph 3.

6. Given funding ceiling established reference (B), we believe proposed allocation of funds generally satisfactory. As one exception, however, we recommend deferment of partial Lacrosse Battalion, and utilization of funds earmarked this purpose to program 55 tanks (about $2 million) and provide additional $1 million for other matériel consumables, such as tires, batteries, et cetera.

7. Reductions which can be “made with least” damage US interests:

A. Defer Lacrosse to FY 1961.

B. Reduce allocations for Jupiter construction (EUCOM recommends $8 million this purpose rather than $11 million shown reference (B), assuming program actually proceeds. At present this assumption highly questionable).

8. We do not recommend reallocation of any funds shown to non-military sector.

Briggs

0. Source: Department of State, Central Files, 781.5–MSP/9–1659. Secret. Repeated to Paris.
1. Circular telegram 236, September 8, outlined the “Refined Military Assistance Program” for fiscal year 1960. (Ibid., 700.5–MSP/9–859) Telegram 734, September 10, outlined Department of Defense tentative military aid programs fro Greece (Ibid., 781.5–MSP/9–1059)