868.10/3–2951
Memorandum of Conversation, by the Assistant Secretary of State for European Affairs (Perkins)1
Subject: Western Aid to Yugoslavia
| Participants: | Ambassador Popovic, Yugoslav Embassy |
| Mr. Filipovic, Yugoslav Embassy | |
| EUR—Mr. Perkins | |
| EE—Mr. Truesdell |
Ambassador Popovic called on his initiative this morning for the stated purpose of presenting a formal request for assistance in solving the Yugoslav current deficit.2 The Ambassador pointed out that the Yugoslav needs had already been discussed here in Washington with Mr. Perkins and other officials and in Belgrade with Ambassador Allen. He said that he was at the disposal of the United States Government to supply any further information that might be required in analyzing the Yugoslav need.
The Ambassador stated that the request was based on material already available to the Department. He said that the drought, the Cominform economic blockade and extraordinary national defense requirements had all contributed to the present Yugoslav plight and the resulting current deficit for the present calendar year estimated [Page 1770] at $153.4 million, and a deficit for 1952 estimated at $26.2 million. The Ambassador stated that the deficit for the two years would amount to a total of $179.6 million if price factors remain constant or, if prices continue to increase as they have during the past year, the total would rise to about $215 million. It was noted by the Ambassador that these figures were based on the economic analysis of Yugoslav economists and, of course, would be subject to the views of the United States which were eagerly awaited. He said that the Yugoslav Government was taking all possible steps to solve its own problems such as internal savings and organizational measures.
The Ambassador then referred to the proposed long-term investment program and stated that if this program were realized Yugoslavia should be able to raise its standard of living and meet its obligations to foreign countries by 1953 or 1954. In this connection the Ambassador pointed out that at his last meeting with Mr. Perkins3 they had discussed the question of capital loan of approximately $225 million which had been agreed to by the IBRD but was conditioned upon a solution to the Yugoslav current deficit. The Ambassador stated that this was another factor which led his government to request assistance bearing in mind the understanding of the United States Government of the Yugoslav situation as evidenced by the food relief program. The Ambassador noted that the request did not name a definite amount of assistance but presented the case for consideration of this Government.
The Ambassador emphasized the urgency of the needs of his Government for the second and third quarter of the calendar year and expressed his hope that a speedy solution could be found. He said his people and his Government would appreciate the continued understanding of this government toward the Yugoslav problem.
I told the Ambassador that we are hopeful that some funds may be released shortly to help meet the immediate problem and that I had been consulting with the Congress to this end. As to the longer term problem, I said that it was our hope that the study with the British could be completed within a few weeks and that a program could be formulated. Ambassador Popovic emphasized the pressing Yugoslav needs for the coming two quarters and concluded by reiterating [Page 1771] his view that any new discussion with the IBRD would cause such delays that it would create a difficult situation for his Government.
- Drafted by Truesdell.↩
- Ambassador Popvić’s eight-page note of March 29 is in file 868.10/3–2951.↩
- Ambassador Popović had called on Assistant Secretary Perkins on March 14 in order to make known current Yugoslav economic needs and to obtain any possible information on the progress made by the U.S. Government in studying the problem. Perkins pointed out that the problem of assistance to Yugoslavia was a complicated matter involving not only the United States and the United Kingdom but other countries as well. As far as the United States was concerned, it was necessary to go to Congress with a firm program based on a thorough study of the whole complex of issues. The United States was working very hard on the problem, but no solution had been arrived at. (Memorandum of conversation, March 14, 868.00R/3–1451)↩