868.51/11745: Telegram
The Ambassador in Greece (MacVeagh) to the Secretary of State
[Received November 8—10:23 p.m.]
1263. Mytel 1248, November 5. Minister Finance yielded Brit Treasury pressure last night and agreed postpone changing drachma rate until results new tax measures apparent perhaps after 1 month. Minister very reluctant delay change which he stated favored by all leading Grk financial experts. Meanwhile at Brit suggestion foreign exchange will be sold importers at official rates plus surcharges varying with commodities. UNRRA representatives supported all Brit proposals.
New financial measures include approximate doubling cigarette tax and 150% increase selling price UNRRA rations. Rise living costs 38% during October brought index to 20 times prewar in drachmas [Page 261] and general increase salaries Government employees scheduled 127% to 150% above September scales. Minister Finance has provided these increases new budget claimed nearly balanced.
Gold pound reached new high 48,000 drachmas Monday, reacted to 45,000 and today 47,000. Wage increases general past month. However, commodity prices fairly stable last 2 weeks and economic activity little affected price inflation.
Minister Finance intends publish summary new economic program as described my immediately following telegram.7
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