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

294. Telegram From the Department of State to the Embassy in Greece⁰

Washington, June 3, 1960, 9:23 p.m.

3411. Paris for USRO, Finn and Thurston. Paris pass CINCEUR. Joint State–ICA message. Your 3282 and despatch 1113.¹ Believe it highly important that GOG be informed quickly of US position on Greek request $72 million FY 61 which GOG must be well aware cannot be met. Purpose following instructions is to ensure this be done and emphasize importance early US/GOG discussions which will take into account anticipated total resources and make appropriate adjustments in MAP programming. We thus hope discourage unfounded Greek expectation that request might somehow be met and prevent new irritation when this is proved impossible. Ambassador should therefore make early response to aide-mémoire along following lines:

1. USG unable meet request for $72 million grant aid FY 61. As emphasized by Secretary in Athens talks May 4,² trend US legislative and executive policy is in direction reducing and eventually abolishing grant defense support aid. Congressional authorization bill FY 1961 DS already less than Administration request and appropriations bill likely provide even less. There is therefore every likelihood that FY 60 level DS and OM grant aid to Greece of $30 million will be reduced in FY 61 and GOG should plan accordingly. Final aid figure dependent on Congressional actions.

2. US recognizes need make progress toward NATO force goals. This is firm US policy and we welcome renewed indication of importance GOG also attaches to these goals. We believe record shows we desire to help as much as we can. Resources not available however to permit us to accept as principle that US must provide both military hardware and all resources to fill GOG local currency shortfall in meeting goals.

3. We believe US Defense Support assistance coupled with GOG expenditures has permitted some progress toward attainment goals. As Greek economy continues grow and with present favorable foreign exchange position it remains our hope that GOG can increase defense effort proportionately with increases GNP. We are also hopeful that certain other more developed NATO countries will be able provide assistance.

4. Subject these observations US intends continue help with means available to assist Greece strengthen its defenses and also to assist Greece in economic development program. In this respect, however, US and GOG programming of MAP depends directly on anticipated overall Greek ability effectively man and utilize equipment provided. US therefore hopes that in its planning for period beginning US FY 61, GOG will take into account both availability Greek resources and likely level US grant DS aid for military budget in determining manpower levels, desirable level MAP deliveries, etc. In this respect also you should make clear to GOG that Other Material in FY 61 will be limited to procurement items not produced Greece and will not exceed current levels. It would be our hope foregoing would be worked out through effective and early US/GOG discussions.

5. As for direct US assistance in economic development plans, US has voiced on many occasions over recent years its admiration of Greek efforts maintain expanding economy and at same time build strong military posture. In particular, GOG is to be congratulated for continued success of stabilization program permitting impressive record economic growth. Prime Minister’s energetic efforts launch full-scale development program while continuing efforts financial stability equally commendable. US and other friendly countries will certainly wish continue assist in these efforts. Early Greek association with EEC would further enhance prospects for development Greek economy. As for US, resources from DLF already made available for two important projects in development program, and highway project remains under consideration. GOG of course free submit additional requests DLF assistance at any time. FYI. You should of course make it clear that U.S. posture re other problems (i.e., debt settlement) remains the same as previously stated. End FYI.

Herter

0. Source: Department of State, Central Files, 781.5–MSP/5–2360. Secret. Drafted by Laingen and Wheeler. Repeated to Paris.
1. In telegram 3282, May 23, Briggs reported on a meeting with Protopapadakis at which Greek requests for fiscal year 1961 aid were presented. (Ibid.) Despatch 1113, May 23, transmitted the text of a Greek aide-mémoire outlining its aid requests. (Ibid.)
2. See Document 292.