Foreign Relations of the United States, 1955–1957, Central and Southeastern Europe, Volume XXVI

310. Memorandum From the Assistant Secretary of State for European Affairs (Elbrick) to the Secretary of State¹

Washington, October 18, 1957.

SUBJECT

• US Policy toward Yugoslavia

In view of the Yugoslav recognition of East Germany and the break in diplomatic relations with the Federal Republic which is expected momentarily, we have considered what new courses of action might appropriately be adopted with respect to Yugoslavia.

We believe some adjustment in our assistance programs is desirable but the manner in which this would be done is of the utmost importance. Abrupt cessation of all aid, especially if accompanied by wide publicity, might well drive Yugoslavia almost irretrievably into the Soviet bloc. It could also be misinterpreted as an acceptance of the failure of our policies, and might thus serve to undermine the basis for the US program in Poland and ultimately perhaps in other countries of Eastern Europe. On the other hand, we realize that through recognition of East Germany the Yugoslavs, by alteration of their own policy, have virtually completed the total alignment of their foreign policies with those of the Soviet Union. As we have made clear to them on several occasions in recent weeks, this alignment makes it difficult to justify continuing our aid programs unchanged. Some curtailment of these programs would therefore appear to be desirable in order to underline the concern with which we regard this positive move on the part of the Yugoslavs in the abandonment of an independent, non-alignment policy. Moreover, this action by the Yugoslavs particularly concerns the US as one of the Four Powers with special responsibilities in Germany.

The continuing although modest flow of spare parts and supplies which now constitutes the major part of our military assistance program in Yugoslavia serves the useful purpose of maintaining the equipment already furnished and thus reduces the effectiveness of Soviet pressures to replace us as suppliers. Jet aircraft, however, now being furnished at a rate of only 10 a month with over 300 yet to be delivered, have long been a target for critics of our policy, while the rate of delivery and the increasing obsolescence of the types being provided has reduced their effectiveness as a deterrent to Yugoslav interest in finding other suppliers. On balance, therefore, we believe it would be desirable to suspend² the jet aircraft program, while continuing, however, to supply all other military items as programmed. It might be noted that the Department of Defense has already requested guidance from us for purposes of logistics and planning on deliveries after November, in accordance with our understanding last May that the aircraft program would be previewed at this time.

As for economic assistance, we believe we should suspend negotiations on the PL–480 programs and on MSA Special Economic Assistance as inopportune in the recent circumstances. We would indicate that while negotiations may be undertaken later there can be no assurance that the outcome will be that envisaged during the recent talks with Finance Minister Humo. With respect to the Majdanpek copper project, on which we promised an early reply during the talks, we should inform the Yugoslavs that US participation in this project is not feasible at this time.

With respect to the important question of timing, we believe no action should be taken until the break in diplomatic relations has been announced by the Federal Republic and until public opinion on the matter has had an opportunity to manifest itself. Moreover, when we inform the Yugoslavs of our actions, we should make it clear that we have not interpreted their recent actions as a relinquishment of their independence and that we fully respect their right, as a sovereign state, to pursue the course of action they deem to be in their own best interest. The US desires to maintain good relations with Yugoslavia, and believes that a basis for mutual cooperation and understanding exists. As we have pointed out on three occasions recently, however, the choice they appear to have made in aligning their policies with the USSR renders it difficult for us to continue to support an aid program for Yugoslavia before the US Congress and tends to undermine the basis on which such a program can be justified.

Recommendations

1) That notification to the Yugoslavs of any change in US programs be deferred for a few days³ after the Federal Republic has announced a break in diplomatic relations in order to avoid any appearance of precipitate action and to provide an opportunity to observe the Yugoslav reaction;

2) That you authorize Mr. Murphy to advise the Department of Defense that, effective in November, further deliveries of jet aircraft to Yugoslavia should be suspended;⁴

3) That you authorize Mr. Murphy and Mr. Dillon jointly to inform the Yugoslav Ambassador in due course that:

a) the jet aircraft program for Yugoslavia has been suspended;⁴

b) we consider it inopportune at this time to negotiate the PL–480 and MSA Special Economic Assistance programs;

c) US participation in the Majdanpek project is not considered feasible at this time.⁵

1. Source: Department of State, central Files, 611.68/10–1857. Secret. Sent to the Secretary through Murphy and Dillon both of whom initialed the memorandum.
2. Murphy crossed out the word “terminate” and wrote “suspend” above it.
3. Secretary Dulles crossed out the words “period of about ten days” and wrote “few days” above it.
4. Murphy crossed out the word “terminated” and wrote “suspended” above it.
4. Murphy crossed out the word “terminated” and wrote “suspended” above it.
5. Secretary Dulles initialed his approval of all the recommendations.