Conference files, lot 59 D 95, CF 156
No. 52
Memorandum of Conversation, by the
Special Assistant to the Ambassador in Greece (Anschuetz)1
ST D–11/1
Subject:
- Greece
Participants:
- United States
- The Secretary
- Honorable Harold Stassen
- Ambassador Peurifoy
- Mr. Douglas MacArthur II
- Mr. Byroade
- Mr. Barrows
- Greece
- Mr. Stephanopoulos, Minister of Foreign Affairs
- Mr. Tsouderes, Minister without Portfolio
- Mr. Kanellopoulos, Minister of National Defense
- Mr. Kapsalis, Minister of Commerce
- Mr. Papayannis, Minister of Finance
Mr. Stephanopoulos opened the conversation with words of welcome in which he gave recognition to the distinguished career of Secretary Dulles. He referred to the recent tri-pact between Greece, Turkey and Yugoslavia as well as Greece’s interest in the stability of the Middle East and expressed thanks on behalf of his Government for U.S. aid and for the agreement of the U.S. to the necessity of implementing a long-term development program in Greece. (Text of Mr. Stephanopoulos’ remarks are attached as Enclosure “A”).2
Mr. Dulles, in reply, said that the United States was aware of the effort which Greece was making to strengthen herself both in the military and economic fields. He emphasized that it was necessary to find the proper balance between economic and military effort. The U.S. at this time is likewise seeking to strike such a balance which would balance the American budget and possibly permit reduction of taxes. A program of foreign military and economic aid for the next fiscal year has been submitted to the Congress after very careful study. Mr. Dulles expressed his hope that the foreign aid program would receive favorable action but warned [Page 161] that it was necessary for the Executive Branch of the Government to respect the constitutional prerogative of the Congress in appropriating funds. He stated that the U.S. welcomes economic planning on the part of her allies which would make the continuation of U.S. foreign aid unnecessary.
Mr. Stassen opened his remarks by saying that under President Eisenhower the Mutual Security Program will be closely coordinated with and carried out under the foreign policy leadership of Mr. Dulles. He emphasized that the financial burdens on the U.S. are extremely heavy and will affect what can be done in Greece. He pointed out that Greece is in a special position inasmuch as Greece has large volumes of military and economic aid from previous appropriations which have not yet been delivered. For this reason, Greece’s present position is quite strong and therefore any new monies appropriated by the Congress will not fully reflect the total volume of aid which will arrive during FY 1954.
Mr. Stassen stated that the Mutual Security Administration had agreed that some of the aid previously appropriated, but as yet not utilized, could be used to begin certain new projects in the capital investment program provided these projects are approved and are within the limit of funds available. He cautioned that it would be necessary to make maximum use of private investment funds in order to realize a program of the magnitude contemplated by the Greek Government and pointed out that the Eisenhower Administration proposed as a matter of policy to rely upon private capital as being the more desirable form of financing a program of capital investment. Careful use of all funds available is essential if they are to fulfill the requirements of Greece and the United States. The U.S. continues to be interested in the future economic and military development of Greece; however, it should be understood that the major part of the responsibility for this development rests upon the people and the Government of Greece. Under the foreign policy guidance of Mr. Dulles the Mutual Security Administration hopes to play some part in the future development of Greece. The details of the American Aid Program for FY 1954 will be communicated to the Greek Government through the Ambassador and through the Chiefs of the Military and Economic Missions after the Congress has acted.
Mr. Kanellopoulos then expressed his appreciation for American assistance to the Greek Armed Forces. He pointed out that although the Greek Government would continue to do its best to meet its military burden, and although Marshal Papagos has declared that the Greek Government would not reduce the ceiling strength of its forces, Greece is confronted with serious budgetary increases next year resulting from the NATO obligations. He requested [Page 162] that the American authorities re-examine the question of Greek military expenditures.
Mr. Kanellopoulos then referred to the need for additional equipment in the Greek Army, a problem to which, he insisted, Generals Ridgway and Gruenther were very sympathetic. He pointed out that while Greece has ten (10) divisions, Bulgaria has eleven (11); Greece has 239 light tanks and 550 pieces of artillery, while Bulgaria has 750 heavy tanks and 2,000 pieces of artillery.
The Secretary then expressed his regret that his schedule would not permit a more exhaustive discussion, and particularly that he had not had opportunity to talk further with Mr. Stephanopoulos, who had played such an important part in directing the negotiations of the Greece–Turkey–Yugoslavia pact. He expressed willingness to receive and study on his return trip any memoranda which the Greek Government might care to submit prior to his departure.
At the conclusion of the meeting, an Aide-Mémoire setting forth Greece’s views on the Middle East Defense Organization was submitted. (Copy attached as Enclosure “B”).3