1. Memorandum of Conversation1


  • Eastern Europe


  • Mr. Vladimir Velebit, Executive Secretary, the Economic Commission for Europe
  • Mr. W. Averell Harriman, Under Secretary for Political Affairs
  • Mrs. Liane W. Atlas, Office of International Economic and Social Affairs

In reply to my question as to what was going on in Eastern Europe, Velebit said that of course his contacts were only on the economic side, and then proceeded to discuss the political side as well.

He started with Czechoslovakia, and said they were not doing well, their economy was stagnant, and there was a disposition to change their system. I asked, “Moving more to the Yugoslav example?” He replied, “I hope they do better than that.” He said that the Czechoslovakians had shown more independence vis-á-vis the Soviets. They had openly opposed the Soviet position on the importance to be accorded East-West trade problems at the UN Conference on Trade and Development. Also, they had praised the ECE Secretariat’s “Economic Survey of Europe” despite its unfavorable report on the Czech economy and the traditionally critical attitude of the Bloc toward such surveys.

He said the Hungarians were much bolder than they had been, and even more so than the Poles. The Poles were being held back by Gomulka, who was “stupid and stubborn” and was putting the brakes on. When I asked him in what areas the Hungarians were bolder, he said both political and economic. The trend was towards close relations with Yugoslavia and acceptance of their ideas. He went into some detail in explaining Rumania’s desire for independence of Soviet COMECON planning. The Rumanians were demanding independence in their economic development. He saw no progress in Bulgaria.

He said the situation in East Germany was “hopeless”. When I commented that the East German government was the most unpopular in the world, he said he wasn’t sure that he could accept that and mentioned [Page 2] South Viet-Nam. I said to avoid argument I will change it to the most unpopular communist government. He replied, “undoubtedly.” He said that 90-odd percent of the people were opposed to Ulbricht.

He agreed that the undoubted objective of all Eastern European countries would be Tito’s independent status. When I asked him what we could do to encourage this, he said we must be patient, it would be slow, but “don’t put in any obstacles.” He suggested we help to expand trade, of course on a “most-favored-nation” basis. He reiterated his conviction that improved trade improves the political climate. He said he regretted the comment that was made when the CIA report on the USSR was made public,2 drawing the conclusion that since the Soviet Union was in difficulties, we should put every obstacle in the way of her development. He said that sort of statement was counterproductive. I told him I hadn’t seen the statement, but it evidently came from some news columns or commentaries. I agreed with his conclusion as far as the Soviet Union was concerned, but said that I felt that the regime of Peiping was so aggressive and in such difficulties it would be a mistake for us to change our attitude. As he was just leaving, he didn’t comment on this.

  1. Source: Department of State, Central Files, E EUR E. Confidential. Drafted by Harriman and approved in M.
  2. Reference is to a January 1964 CIA report that placed Soviet growth rates over the previous 2 years at less than one-half those of the United States. For a summary of the report, see The New York Times, January 8, 1964.