354. Memorandum of Conversation0
SUBJECT
- Discussion of Greek Defense with Secretary General Stikker
PARTICIPANTS
- United States
- Ambassador T. K. Finletter
- J. R. Schaetzel, Deputy Assistant Secretary, EUR
- David H. Popper, EUR/RPM
- Ronald I. Spiers, EUR/RPM
- Robert H. Kranich, EUR/RPM
- Philander Claxton, S/MF
- Seymour Weiss, G/PM
- Arthur Foley, REU
- Charles Sullivan, Treasury
- Robert Schott, GTI
- Frederick Sligh, AID
- Mrs. Bracken, GTI
- Herbert Spielman, EUR/RPM
- NATO
International Staff
- Dirk U. Stikker, Secretary General
- John Getz, Director, Office of the Secretary General
- David Bendall, Deputy Assistant Secretary General for Economics and Finance
Mr. Stikker commented that as a result of the NATO resolution to assist the Greeks to finance their inordinately high defense budget, he had agreed to act as the collection agent for them. In spite of the need which he personally believes justified, it has not been an easy job. For example, in Athens where he recently met with the Greeks, he had experienced a rather difficult time. He found the Greeks to be ungrateful regarding his efforts to obtain 1963 assistance and full of complaints. The Greek attitude was annoying, but he had tried to control his temper. In the Secretary General’s experience, the Greeks have not taken the initiative expected of them. They have failed to follow through to negotiate out the various pledges; their efforts have not been well-coordinated; and they have not been very cooperative.
In spite of these difficulties, Mr. Stikker stated he is hopeful the Greeks will raise their self-financed Greek budget, which was $154 million in 1962 and was raised to $161 million in 1963, to $170 million in 1964. Of course, this event is predicated on the assumption the NATO exercise will come up with approximately the same amount as pledged in 1963. The Greeks calculated their over-all defense requirement in 1964 to be $213 million, leaving a $43 million gap. The Secretary General told them this was too high and they came down to $30 million; however, he believed they would be satisfied with approximately last year’s [Page 683] level. Perhaps, if the Greeks settle their pre-war debt with the U.K., the latter might contribute. If the U.K. participates, France may also, although the French have a tendency to consider Greece and Turkey as United States preserves.
Mr. Stikker referred to his conversation with Secretary McNamara1 and said that he had hoped the United States would contribute $10 million to the 1964 exercise, as it has done in 1963. However, Mr. McNamara had stated that the United States could not contribute more than $5 million because of our worldwide commitments. Mr. Stikker pointed out that our cut would make his job exceedingly difficult. He agreed to use the totality of our aid to Greek defense, which he knew was significant, as an argument to buttress the United States contribution (his aide then reviewed the projected DOD figure for FY1964 which was: $5 million for the defense exercise, a programmed MAP figure of $80 million, and expected deliveries amounting to $150–$180 million). Mr. Stikker reiterated that he considered it important to assist the Greeks, even though their economic progress has been impressive. He commented that the Bank of Greece estimated the 1963 increase in GNP to be 9%, which, combined with the 1962 rate of about 4%, averaged out at about 6%.
Mrs. Bracken agreed that while there is a lack of coordination in the GOG, that perhaps the technique of the Greeks submitting a shopping list to the members might be helpful. The Secretary General remarked the Greeks have resisted this approach because of their desire to translate these contributions into drachmae for the defense budget. It was also mentioned that the consumable portion which is purchased abroad for the Greek defense budget is a small component of the over-all defense budget and the Greeks would probably prefer to purchase these items from traditional suppliers. Mr. Stikker admitted that he had found it difficult to obtain an accurate figure on the “gap”. He emphasized the importance of the United States coordinating its projected amounts of military assistance with him because this information is necessary when discussing the problem with other prospective donors. They insist upon knowing what the United States is planning to do. We indicated the impossibility of projecting possible future long-range U.S. aid to Greece in view of current congressional attitudes.
A general discussion of Greek military planning ensued and it was generally agreed that the Greeks would attempt to utilize the planning exercise as a way to obtain aid.
Mr. Stikker referred to his recent overflight of Thrace near the Bulgarian border. [5 lines of source text not declassified]