Office of the Historian

316. Telegram From the Embassy in Greece to the Department of State0

Athens, September 12, 1961, 7 p.m.

377. Reference: Embtel 376.1 Subject: Defaulted pre-war bonded debt.

1. We took advantage Zolotas visit to raise subject of resumption negotiations for settlement defaulted bond debt. We pointed out settlement would redound to Greece’s favor not only with US but with Common Market and other circles as well. Zolotas responded he fully prepared and willing discuss informally at Vienna, noting however this remains essentially matter for Greek Government determine and settle. He volunteered opinion no Greek Government could withdraw from most favored debtor position because of oft-repeated political connotations. He thought however Greeks would welcome any assistance in advising [arriving?] at formula which would make such a clause acceptable to Bondholders Council. In his view it could be limited in application to Greece’s immediate Communist neighbors in Balkans. Zolotas was given no encouragement on acceptability such formula but was encouraged include in any discussions with Dillon and Ball in Vienna.2

Briggs
  1. Source: Department of State, Central Files, 881.10/9–1261. Secret.↩
  2. Telegram 376, September 12, reported on Zolotas’ overall analysis of the state of the Greek economy. (Ibid., 881.10/9–1361)↩
  3. At the Vienna meeting of the International Monetary Fund.↩