868.20/4–2647: Telegram
The Secretary of State to the Embassy in Greece
secret
Washington, May 7,
1947—7 p. m.
603. Urtels 570 Apr 241 and 590 Apr 26. Please advise appropriate Greek officials Depts opinion neither Army nor Gendarmerie should be increased in size pending further study of both military and economic implications. In discussing issue you should emphasize following:
- 1.
- Present aid program does not provide for financing costs of increased forces.
- 2.
- US Govt is not prepared to approve diversion directly or indirectly to the military of aid planned for stabilizing civilian economy and reconstruction without its concurrence. This would include diversion of any category of goods, whether imported or domestically produced, the supply of which is to be augmented from abroad under the aid program.
- 3.
- On basis of Greek estimates revenues and expenditures 1947–48, internal financing increased forces will result in serious inflationary pressure aggravating problems of maintaining price stability, of combating hoarding, of facilitating exports, and of effecting reconstruction.
- 4.
- Dept particularly concerned over proposed permanent increase in Gendarmerie and strongly believes no action should be taken at present to implement this decision. According to available information, increase is not required for anti-bandit operations and gives force to fears that Gendarmerie may be used for unacceptable political purposes.
- For your info at time when aid bill is under debate, to augment forces under Zervas command strengthens accusations that reactionary elements Greek Govt are entrenching themselves with US approval and financial support.
- 5.
- If recruiting for relief older age groups is urgently necessary from military viewpoint (Para 1 urtel 620 May 13 [3]) such changeover should be accomplished without enlargement present strength and/or financial burden.
- 6.
- Without passing judgment at present on short run needs of
military establishment, Dept has strong convictions re military
expenditures after immediate crisis has passed:
- (a)
- Current military burden would be far beyond capacity of Greek economy to bear even after substantial degree of recovery.
- (b)
- Plans must be made now to reduce military expenditures drastically if Greece is to avoid financial collapse after present aid is terminated.
Please report Greek reaction to above.
Appreciate any further expression British views on subject.2
Marshall