124. Telegram From the Embassy in Yugoslavia to the Department of State0
1459. Appearance of twenty newly acquired Soviet tanks of fairly recent vintage and one Soviet-type assault gun at May Day parade here has naturally aroused much comment among four [foreign?] observers, since with exception of a few helicopters these are the first major item of military equipment known to have been acquired here from Soviet sources since 1948. While authentic information is not available, we think it likely that acquisition these items dates back to tension in US-Yugo relations following Belgrade conference and to difficulty encountered by Yugos at that time in discussing further deals for purchase US military equipment. Lack of dollars and other Western currencies, and existence unused clearing balance with Soviet Union, may have been further Yugo motive for purchase Soviet tanks. Perhaps equally or more significant than Yugo willingness to purchase Soviet tanks is Soviet readiness to supply them to Yugos. Other neutral states besides Yugo have received Soviet weapons, but since 1948 Soviet Union has not been willing send military equipment here. Having purchased these items, it is probable, in order to avoid offending Russians. There are also signs, however, of a deliberate desire in some Yugo quarters to make a demonstration of some sort in exhibiting these items. While Yugo military circles deny that this signifies any change in Yugo political or military [Page 264] policy, we think Yugo Government may not have been averse in trying to arouse in Western circles some alarm over results of relative cold-shoulder which Western countries have recently turned to Yugo and her needs with respect to credit and facilities for military purchases.
On top of this Tito yesterday morning, May 2, just prior to his departure for Split (purpose not announced) received Soviet Ambassador Yepishev and conducted with him, according to official announcement, a long conversation. This deserves careful attention. Yepishev had accompanied Gromyko back to Moscow on April 21. He appears to have returned Belgrade April 30, evidently demanded urgent interview with Tito and was fitted into latter’s schedule at only possible point between strenuous May Day ceremonies and departure Dalmatia later Wednesday morning. Conclusion inescapable that Soviet Government, after receiving Gromyko’s report on visit, decided to make further communication of urgent nature to Tito. This could have been, and in my view most probably was, effort to enlist Yugo support and influence with neutrals for some new Soviet move re testing (Department Circular telegram 1857).1 But we must remember Yugos had evidently pressed hard and vainly during Gromyko visit for discussions on economic problems. Information now available indicates with fair degree reliability Yugos urged, in particular, that special negotiations be instituted at relatively high political level to discuss closer association Yugo with COMECON.
While Russians would scarcely be so crude as to couple these two things explicitly for bargaining purposes, there are many ways to skin such a cat. Yugo financial distress is acute. So is concern here over effects on Yugo of Common Market. XXII Congress and Gromyko visit have unquestionably whetted Tito’s hopes for accommodation with Bloc on terms that would not require Yugo concessions on party-ideological plane. While he would probably like retain outwardly good relations with West to extent possible, he would, in my opinion, sacrifice much even in terms of relations with US to obtain accommodation on such terms. In such circumstances must reiterate we can take nothing for granted concerning Yugo policies in coming period.