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

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

Athens, February 10, 1960, 8 p.m.

2213. Reference: Embassy telegram 1805 and 2202.¹

1. When I raised question of foreign debt Averoff told me negotiations now broken off and that, as intimated to me previously, government is now considering public announcement on bilateral offer to bondholders, in view of its failure to reach agreement with Council.

2. I expressed disappointment indicating that according to Embassy’s information relatively small distance now separates government from Council. I thought it would be particularly unfortunate in those circumstances and having in mind such wider issues as re-establishment of credit, et cetera, for Greek Government to take position which might be attacked, or at least criticized by Council.

3. Averoff agreed that solution acceptable to Council would certainly be better but maintained that Gazis offer last month was maximum Greece can make. After again describing alleged burden on Greek economy (since settlement of internal debt would have to follow external debt settlements) he characterized Munro’s reply (February 2) as embodying terms less favorable than Yugoslav settlement, with resultant political repercussion here if Greece accepted it. “Yugoslav has extended $50 million credit to India and offered $10 million to Greece; if Yugoslavs prosperous as that how could Greek administration avoid barrage of criticism with settlement public would consider less favorable than that obtained by solvent northern neighbor?” Furthermore, said Averoff, Greek good faith in seeking solution will be demonstrated by unilateral offer.

4. It was left that Averoff would convey to Prime Minister Caramanlis my misgivings re unilateral offer, even though he is doubtful whether latest Greek offer can be improved or that further negotiations with Council can be undertaken.

Briggs

0. Source: Department of State, Central Files, 881.10/2–1060. Confidential; Limit Distribution.
1. In telegram 1805 from Athens, December 30, 1959, Briggs reported that Averoff saw no major obstacles in the way of concluding an agreement on the bondholders issue. (Ibid., 881.10/12–3059) In telegram 2202 from Athens, February 10, Briggs reported that in his February 10 conversation with Averoff he had stressed the need to end “procrastination” on a number of outstanding issues in Greek-American relations. (Ibid., 611.81/2–1060)