Foreign Relations of the United States, 1947, The Near East and Africa, Volume V

868.50/3–147: Telegram

The Secretary of State to the Embassy in Greece

secret
us urgent

Washington, March 1, 1947—6 p. m.

248. For Porter from Ness. To develop and explain overall Greek program (see Deptel 241, Feb 28, 1947¹) Dept urgently desires quick review past estimates and further information regarding Greek foreign exchange requirements 1947 and ensuing period years in which substantial assistance appears required. Please base estimates on assumption that economic assistance would be furnished Greece to extent and period necessary stabilize Greek economy and assure self-supporting status by end period. Following desired:

A. Relief Deficit.

(1) Review past estimates relief deficit 1947. In light recent developments and possible resumption major inflation would you now reduce substantially estimate actual 1947 exports and increase deficit contained urtel 161, Feb 5?² We now feel estimate may be optimistic.

(2) Dept needs also full year 1947 balance of payments separately for dollars, sterling and other currency. Pls relate to figures urtels 161 and 194.³ Assume sterling not convertible in last half 1947.

(3) Advise your rough estimate magnitude relief deficit (if any) 1948.

B. Reconstruction Needs.

(1) Amount total investment reconstruction equipment and supplies (by categories) required to assure reasonably self-supporting Greek economy, and amount foreign exchange required. This should bear realistic relation to absorption capacity. Indicate total period required for such transition and annual or total amounts foreign exchange required. Indicate also requirements assuming 5 year maximum period.

(2) Indicate assumptions re level internal investment Greece could maintain. Could Greeks soundly finance by internal means all local expenditures in reconstruction?

(3) What, if any, additional imports consumption goods above minimum level urtel 161 are required 1947 and later years to assure stability and make possible high rate drachma outlays for internal sources on reconstruction? (Note recent British estimate minimum foreign exchange needs 1947 for civilian purposes 160 million dollars, including UN estimate relief 84 million dollars.)

C. Overall Civilian Picture.

Taking into account all factors, (i.e., relief, stability, reconstruction), estimate annual foreign exchange needs for (a) 5 year period and (b) period transition to self-supporting basis.

D. If possible, indicate amount and period during which assistance required in order make Greece reasonably good prospect for loans from International Bank, or private sources.

E. Following assumptions appear appropriate in answering above questions. If differ, please explain.

(1) Greek military operations during 1947 on scale adequate to suppress armed resistance and restore internal order;

(2) Maintenance of Greek armed forces for period 1948–51 on scale gradually reduced from 1947 level;

(3) That all foreign exchange costs of military will be met by outside assistance;

(4) Reasonable success reform public administration;

(5) U.S. administrative and technical assistance and control on substantial scale in planning and administration economic programs. [Ness]

Marshall

1. Not printed; it informed Athens that the President had approved United States policy towards Greece and set forth 11 steps towards implementing the policy. The text of telegram 241 was sent to Ankara in telegram 101, March 1, 1 p.m., which noted that while the specific application of No. 241 was to Greek rather than to Turkish aspects of the problem, similar though less urgent consideration was being given to Turkey. (868.00/2–2847)
2. Not printed.
3. No. 194, dated February 10, not printed.