Foreign Relations of the United States, 1969–1976, Volume XXX, Greece; Cyprus; Turkey, 1973–1976

46. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Ford ¹

Washington, April 29, 1975.

SUBJECT

• U.S. Economic and Military Assistance to Greece

In your April message to the Congress,² you indicated—in the context of your broader remarks on Turkey, Greece and Cyprus—that we were consulting with Greece on economic and military assistance programs and that proposals would be submitted to Congress in the near future.

This memorandum reviews the current status of US-Greek consultations on economic and military assistance.

In early January, the Greek Government formally requested U.S. assistance for 1975 in the following specific areas:

• —Military assistance.
• —Economic assistance.
• —Financing of capital equipment, raw materials and agricultural products through Export-Import Bank, Commodity Credit Corporation (CCC), and other agencies.
• —Influence on international organizations such as the International Bank for Reconstruction and Development (IBRD), and the International Monetary Fund (IMF) to increase their lending to Greece.

So far, we have been able to be helpful in the following ways:

• —Chairman Casey of the Export-Import Bank visited Greece in mid-April to explore the possibility of expanding Eximbank activity in Greece.
• —We are supporting the IBRD’s plan to approve loans to Greece this year approximating $135 million. (Loans amounted to about $40 million last year.)
• —The IMF is prepared for increased Greek borrowing under the oil facility.
• —We are planning to reschedule all of the principal and interest payments due this year for direct military credits (about $10 million).
• —We are also planning additional Foreign Military Sales (FMS) credit of $15 million for FY 1975 beyond the present $71 million program.
• —We are continuing to explore the possibility of renewed CCC credit to Greece. The amount will depend on market conditions.

Prime Minister Caramanlis has made it clear that the Greek Government is primarily interested in substantial amounts of military assistance. This is motivated in great part by Caramanlis’ desire to recoup military losses suffered during last summer’s Cyprus crisis and to bring Greek forces up to par with those of Turkey. To this end, the Greek military has recently submitted a list of equipment amounting to about $800 million to be spread out over a number of years. The Greeks have expressed the hope that the equipment would be provided primarily under grant aid rather than some form of outright purchase. We have told Caramanlis that there would be difficulties in providing grant military aid in the amount evisaged, particularly in view of the state of the U.S. economy and considering our military aid commitments world wide. We have made clear the additional problem of providing grant military aid to Greece while Turkey—a fellow NATO ally—is subject to an embargo on arms supples. The Greeks have carefully separated the economic/military assistance request from the ongoing base negotiations. Approval of a program that substantially meets Greek requirements would have favorable impact on the base negotiations and facilitate efforts to encourage Greece to return to full participation in NATO.

State is tentatively planning a FY 1976 program for Greece in the range of $65 million in grant military assistance, in addition to the $90 million in FMS credits already planned. They are also considering the possibility of increasing FMS credit for Greece to the point where a total program of combined grant and credit would amount to approximately $175 million. (By comparison, the proposal for Turkey in FY 1976 is $180 million, including $63 million in grant military assistance.)

The precise legislative strategy for handling Greece’s stated economic and military aid requirements is under study. Both the option adopted and the timing involved will be influenced by other issues, including Congressional action on the Turkish aid cut-off, the pace and success of the Cyprus negotiations, the Aegean dispute between Greece and Turkey, and the outlook for our base discussions with Greece.

While continuing to seek substantial economic and military assistance from the United States, Prime Minister Caramanlis has been active on other fronts as well. Reports from Athens state that Caramanlis was successful in obtaining “substantial” economic and military aid from France during a recent trip to Paris. Unconfirmed press reports indicate that the assistance may range as high as $800 million in long-term, low interest loans with a French pledge to speed up deliveries of modern weapons for Greek forces.

1. Source: Ford Library, National Security Adviser, Presidential Country Files for Middle East and South Asia, 1974–1977, Box 10, Greece 3. Confidential. Sent for information. A notation on the memorandum indicates the President saw it.
2. The text of the “Address Before a Joint Session of the Congress Reporting on United States Foreign Policy,” April 10, is in Public Papers: Ford, 1975, pp. 459–473.