202. Paper Prepared in the Bureau of European Affairs, Department of State1

THE NEW GREEK GOVERNMENT: IMPLICATIONS FOR U.S. INTERESTS

SUMMARY

The elevation of Constantine Karamanlis to the Presidency and the assumption by George Rallis of the Prime Ministership means that Greece will continue to have a leadership with a will to pursue the strong pro-Western policies of Karamanlis, but raises the question whether it will have the ability to take initiatives on issues such as the reintegration of Greek forces into NATO’s military structure. The answer to this lies in how much unity the New Democracy party can maintain under Rallis. There are divisions in the party as evidenced by Rallis’ narrow victory (88–84) over Defense Minister Averof in the election for party leader. Aware of this, Rallis will initially be very wary of any actions which could create strains in the party. In his efforts, he will be influenced by Karamanlis in the Presidency. He may be inhibited in formulating policy until the relationship between the two is clarified.

Once he is comfortable in his position, Rallis may be bolder in pursuing a strong pro-Western policy. He will probably be urged on in this by Karamanlis who, secure in the Presidency, will want to see his grand design of tying Greece to the West completed.

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The opposition, led by Andreas Papandreou’s PASOK, can be expected to react vigorously to this policy. In the past Papandreou has been constrained by the universal respect Karamanlis enjoyed in Greece. This does not apply to Rallis; the opposition will probably hammer away at him in an effort to break enough support away from the weakened New Democracy party to force early general elections. Rallis needs to delay elections, which would only help the opposition, until he builds a record and establishes his dominance in the New Democracy party.

For the U.S., this implies that Rallis, in support of a pro-Western policy, will want to maintain good bilateral US-Greek relations. We should recognize, however, that he will always be guided by his perception of Greek national interest. He will continue Greece’s general support for U.S. positions on East-West issues, but will be strongly influenced by the attitudes of Greece’s new partners in the European Community. For domestic political reasons, Rallis will be reluctant in the short term to appear to compromise on Greek NATO reintegration. If possible, he will also avoid raising potentially contentious issues such as renegotiation of the defense agreement with the U.S. (This may not be possible if the opposition begins to demand action in view of the new Turkish agreement.)

Rallis will probably look for and welcome evidence of U.S. interest in Greece and confidence in his government in order to increase his own stature and bolster his position with the more conservative elements of his party who tend toward Averof. We should try to maintain good relations with Rallis and his government without pressing on controversial issues or implying we will adopt Greek positions in Greek-Turkish disputes. Any major U.S. initiatives on Cyprus, the Aegean or Greek reintegration would put Rallis in a difficult position by forcing him to confront issues he would prefer to avoid at this early juncture. END SUMMARY.

George Rallis in an interview shortly after his election as New Democracy party leader and, therefore, Prime Minister, said he was committed to the basic thrust of Karamanlis’ foreign policy. He wanted Greece in the Common Market and reintegrated into NATO. The Cabinet he has named supports this. The majority served in Karamanlis’ government, although there has been some reshuffling. The most important change was the move of Constantine Mitsotakis from the domestic economy oriented Coordination Ministry to the Foreign Ministry. The most important re-appointment was Averof to the Defense Ministry.

Mitsotakis probably will be pragmatic in his dealings with us, ever mindful of Greece’s perceived national interests. He was instrumental as Coordination Minister in pushing the recently signed Greek-US [Page 617]agreement on economic, cultural and scientific cooperation through a reluctant Greek Government.2 He was also, however, the moving force behind the Greek approval of the Syros shipyard contract for the repair of Soviet naval auxiliaries, and he has sought to expand Greek-Soviet commercial exchanges which he believes will benefit Greece. Averof has consistently been helpful to us and can be expected to remain so as long as he stays in government.

Initially, Rallis will hew studiously to the Karamanlis line, defer to Averof in defense matters, and avoid actions which would test the loyalty of his party members. Foremost among these is any appearance of compromise on Greek-Turkish issues. The immediate concern is Greek reintegration. Karamanlis by his February 22 announcement that only the original Haig/Davos arrangements were acceptable as a basis for reintegration has established a position from which Rallis will have difficulty moving. Moreover, he may not want to until he feels secure in his own position, reaches an understanding with Averof and the right wing of New Democracy which he represents, and clarifies the working relationship between himself and Karamanlis as President. Similarly, Rallis probably will be careful of any involvement in the Cyprus problem and take no new initiatives with Turkey on Aegean issues.

Once he feels comfortable in his new role, Rallis could be a forceful and innovative leader. As Education Minister from 1974 to 1977, he undertook a courageous effort at reforming the Greek educational system, one of the most entrenched of Greek institutions. As Prime Minister, he may be willing to do the equivalent with regard to issues of important interest to us.

Unless, however, Rallis is strongly pushed by Karamanlis, we should not count too strongly in the short or medium term on this possibility. The difference between difficult domestic issues such as educational reform and difficult foreign policy issues such as reintegration is the Turkish factor. Rallis has been a hard-liner on Turkey, and his feelings towards the U.S. are tempered by his belief that our policy towards Turkey is wrong. Greek Ambassador Tzounis has related that while Foreign Minister Rallis once told him he had nightmares about new U.S. initiatives which would be perceived as pro-Turkish in Greece and, thereby make more difficult the task of Greek leaders such as himself who wanted good US-Greek relations.

Rallis’ natural inclination to go slowly on issues involving Turkey will be reinforced by his concern for strengthening his political base. If Rallis and New Democracy are going to do well in the next elections, [Page 618]which in any event must be held by November 1981, he must attract support from the center. Indeed, one of the reasons cited for his election as party leader over the more conservative Averof was his greater appeal to centrist elements of Greek politics. It is these same elements, however, who will be less inclined to accept compromises to achieve full Greek reintegration in the interest of Alliance solidarity and who are not as concerned about Greece’s current NATO posture as their rightest colleagues. Their interest is in closer ties with Europe. They do not consider full NATO membership necessary for this. Greece’s entry into the EC on January 1, 1981, will emphasize this point and Rallis can be expected until the elections to concentrate on the European aspect of Greek foreign policy rather than confronting controversial issues which could only hurt him with the constituencies he is appealing to.

We can help Rallis in this period by indicating our confidence in him and his government and not rushing him on issues he is not prepared to undertake. When he indicates that he is willing to address the difficult issues, we should be ready to respond.

  1. Source: National Archives, RG 59, Office of the Under Secretary of State for Security Assistance, Chron Files, Speeches and Papers of Lucy W. Benson (1979) and Matthew Nimetz (1980), Lot 81D321, Box 6, Matthew Nimetz Chron (March 1980–July 1980). Secret. Drafted by Thomas M. Coony (EUR/SE); cleared by Dillery, Terrance G. Grant (INR/WEA/SE), Ewing, and Nimetz on May 15. In a May 14 covering memorandum to Brzezinski, Tarnoff noted that the paper was a response to an NSC request. (Ibid.) See footnote 1, Document 201.
  2. The agreement was signed in Athens on April 22.