284. Telegram From the Embassy in Greece to the Department of State0
2386. 1. Prime Minister Caramanlis lunched privately yesterday with Berger and me and for over two hours we discussed wide range of specific and general matters of mutual interest from foreign debt question and Soviet efforts at economic penetration of Greece to his views of Greek political scene. Although no solutions pending problems were obtained, conversation constituted valuable roundup and exchange of information. It also served fortify our belief that Caramanlis, notwithstanding his and his government’s shortcomings, is measurably superior to and likewise closer to statesman than anyone now in the picture. He is staunch undeviating friend of West and supporter private initiative. He is energetic and politically sagacious with a clear insight and few illusions as to economic difficulties and political pitfalls which lie immediately ahead.
2. Separate telegrams sent covering specific aspects of immediate mutual interest.1 This telegram concerns general aspects of yesterday’s talk.
3. Caramanlis main present concern is with his country’s economic difficulties and their domestic political repercussions. He sees need to expand Greek agricultural exports as fundamental, but thinks answer lies not so much with Greece as with her Western allies who should make room for Greek imports. He expects no real solution to Greece’s economic problems until country has built up a more diversified economy by industrial investment and tourist trade, which will take some years. Meantime he is under heavy pressure internally from farmers and wage and salary earners for subsidies and wage-improvements which country cannot afford but which politically he cannot ignore. This produces for him extremely delicate political-economic balance in which he must patch and improvise as best he can.
4. In this situation he believes Soviets holding good cards and playing them skillfully. He foresees united front of some kind developing as country moves toward 1962 general election consisting of EDA in alliance with Markezinis and other opportunist nationalists. He expects [Page 701] the Soviets to make sweeping offers to buy Greek farm surpluses and build Greek industries in order embarrass him vis-à-vis disgruntled masses and give united front a platform which will be popular. He has no intention of falling in with Soviet overtures and will resist any proffered solution to Greece’s problems along these lines.
5. He feels he can get away with this as he is still strong with the electorate, and likely to remain so since electorate can see clear evidence of what he has done to build up Greece and has a mature appreciation of value of political stability and governmental continuity. Stability is a new quality in Greek political life and one to which he attaches greatest importance. It is because of this that he has been reluctant to make ministerial changes. He is aware of weaknesses in his own cabinet/but cabinet changes have historically kept country in state of political turbulence and been major cause of Greece’s chronic political jitters. He has no present intentions of making cabinet changes, but may do so this summer.
6. He is not certain whether he will wait until end of this Parliament in 1962 before going to country. He said he not unmindful of serious problem that could be posed for him by combination of economic stagnation, united front of EDA and nationalist opportunists, plus high-sounding Soviet offers to trade and build factories, but feels that by choosing his own time for general election and with a “proper election law” he can contain this threat.
7. Speaking of new center political movement2 he said they were bright and lively lot and he had avoided criticizing them. But they had no real leader, which was essential in Greece, and were divided and would ultimately disintegrate. Some of them were close to ERE Party and could and if need be would be brought over; others tended to the left; balance would be atomized.
8. Finally Caramanlis said Greece was in that uneasy and delicately balanced state that no one could tell in which direction it would go. If West cooperated by taking more Greek exports and associating Greece with Common Market, Greece could maintain private enterprise system, resist Soviet overtures, and in few years create broader and sounder economic foundation. But if economic situation should worsen, and internal pressures from farmers and workers should mount, Greece might have no alternative but to move toward statism, government controls and authoritarian solution.
9. Comment: While no doubt above was cast for our benefit (particularly his confidence that he has more electoral support than in 1958—an opinion we do not share) and while there was a certain disposition [Page 702] to look to the West rather than to its own efforts to solve farm surplus problems, the clarity with which he sees his politico-economic problems was impressive. We came away with the feeling that here is tough-minded, self-reliant and self-confident politician-statesman genuinely on our side and deserving of our support.
- Source: Department of State, Central Files, 781.00/2–660. Secret; Limit Distribution. Transmitted in two sections.↩
- In telegram 2378 from Athens, February 26, Briggs reported on his discussions with Karamanlis on the Greek bond issue. (Ibid., 881.10/2–2660) In telegram 2375 from Athens, February 26, Briggs reported on efforts to encourage settlement of a “series of minor but troublesome” cases by the Greek Government. (Ibid., 481.006/2–2660)↩
- An apparent reference to former Prime Minister George Papandreou’s Liberal Democratic group.↩