333. Memorandum From David Klein of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)0
SUBJECT
- Greece and the Defense Budget
Labouisse’s telegram 231 and his conversations with the Greek Prime Minister on the question of the defense budget is under study by State, AID and Defense.
The consensus remains that $175 million is a good figure and that the United States Government should not permit itself to be pushed to finance the higher SHAPE estimate. There is no military justification for the higher figure. From a purely economic standpoint, there seems to be no need for increased U.S. assistance. This problem—taken by itself—seems to be one of weaning the Greeks from continued and interminable dependence upon us.
At this juncture there seems to be agreement within the government agencies concerned on new tactics for dealing with the defense budget problem. Until now we have insisted that $175 million was the [Page 645] optimum figure and there was no justification for more. However, it is now being proposed that, instead of a categorical reply, the Greeks be told the United States remains committed to the $175 million target figure but if the Greeks feel that $197 million is what they want, the United States would not object to their seeking the additional $22 million from other non-U.S. sources.
(Frankly, from my reading of the cables on the Labouisse–Karamanlis talks, I get the uneasy feeling that we are focusing almost all our attention on symptomatic aspects of the basic problem rather than the basic problem itself—the reason for Karamanlis’ mood and his entire catalogue of complaints which clearly go beyond the specific military and fiscal problems.)
As for handling the defense budget exercise, there are at least two schools of thought. One is to let Karamanlis write the President about this problem, as he threatens to do; the other is to have the Secretary or Under Secretary of State take the initiative and speak with the Greek Ambassador here, spelling out the U.S. position, making it clear that there is an absolute identity of views on this problem between the President and the Secretary of State.
Bob Komer leans to the first approach—letting Karamanlis write the President. Of course if Karamanlis is determined to do this, there is no way—or reason—to stop him. For our part, however, I think it preferable that, in the first instance, the Secretary or Under Secretary of State speak with the Greeks; try to probe their thinking a little more carefully than has been done; attempt to convince them that as far as the defense budget is concerned, we have studied the problem carefully and sympathetically; we have come up with what seems to us the right proposition; and that this decision is that of the U.S. Government and not merely of the Department of State. Karamanlis may still write the President, but, in my view, the Secretary should delve into the problem and at least establish its nature before the President becomes involved personally.2
The White House will be consulted before any single course of action is taken. In the meantime I will stay in touch with Bob Komer and make sure that you are informed of the latest developments. And perhaps it might be useful if Bob and I had an opportunity to talk with you in the next day or so about this matter to be certain we are all working on the same frequency.
- Source: Kennedy Library, National Security Files, Staff Memoranda, Klein. Secret.↩
- Telegram 23, July 7, reported on three separate discussions between Ambassador Labouisse and Karamanlis on Greek defense and economic assistance requirements. (Department of State, Central Files, 881.10/7–762)↩
- In telegram 32 to Athens, July 14, Secretary Rusk instructed Ambassador Labouisse to inform Karamanlis that the United States had not changed its policy of seeking close ties with Greece and would make every possible effort to find sources of military assistance for Greece. (Ibid.) The Secretary made similar points in a July 17 meeting with Ambassador Matsas. A memorandum of their conversation is ibid., Secretary’s Memoranda of Conversation: Lot 65 D 330.↩