868.51/10–245
The Ambassador in Greece (MacVeagh) to the Secretary of State
[Received October 15.]
Sir: I have the honor to acknowledge receipt of the Department’s instruction No. 408 of September 4, 1945,84 and its telegram No. 998 of September 22, regarding the request of the Greek Government for a loan from the Export-Import Bank.
As instructed in the Department’s telegram under reference, the unfortunate effect of the publicity given to the original request has been brought to the attention of various Greek officials, including the Ministers of Finance and National Economy. All deny that any authoritative statement was made to the effect that a loan actually had been concluded. The fact remains that most persons in the country consider the $250 million loan as assured, and refer to the $25 million list of requirements just prepared as relating to the “first installment”. A denial circulated to the press by OWI,85 in the form of a quotation from Ambassador Diamantopoulos in Washington, was ignored by all local newspapers. Moreover, the British Embassy was informed by officials of the Ministry of Posts, Telegraphs and Telephones that certain telephone equipment ordered from the United Kingdom was no longer wanted, since the $250 million loan from the United States would take care of all such needs.
It is understood that the new $25 million list of requirements prepared by the Greek Government for the Export-Import Bank is being forwarded to Washington through UNRRA channels. It has been prepared hurriedly and UNRRA has not been consulted; the proposals were handed over in a sealed envelope addressed to the Greek Ambassador in Washington. As a result, the list probably involves much of the same general overlapping with the present UNRRA program as occurred in the earlier list,86 of which a copy accompanied the Department’s instruction of September 4.
The indefinite status of present UNRRA programs, as described in my despatch No. 1614 of October 1, necessitates particular care [Page 244] in the preparation of supplementary programs such as the present. For example, UNRRA has obtained large quantities of material for extending the Athens water supply, while nothing has been ordered to assist in reopening the Corinth Canal. Rolling stock and maintenance machinery for the railroads have been programmed by UNRRA on a considerable scale, while street car and bus requirements have received comparatively little attention. Similarly, agricultural machinery has been ordered on a large scale, while spare parts and other essential items for the textile industry have been excluded from UNRRA plans.
It is most unfortunate that the question of a credit from the Export-Import Bank has been handled by the Greek Government in a manner which can only be described as careless. Greece needs almost everything that can be obtained from abroad, but there is little evidence of any sense of responsibility in arriving at a proper balance of requirements within reasonable limits of cost. Many of the requests submitted to UNRRA are frankly extravagant, and the Eximbank list may well contain items of the same character.
I am informed that UNRRA intends to ask the Greek Government for a copy of the Eximbank list for study and discussion with the Embassy. The outcome will be reported to the Department in due course.
Respectfully yours,