Athens, June 18, 1965, 1355Z.

1862. In past few weeks present govt has entered new phase of malaise which has afflicted it for at least six months. As result (1) dispute over "Aspida" organization/2/ and presumed involvement of PriMin's son; (2) controversy over Public Power Corp (DEI) investigation which threatened to bring former PriMin Caramanlis and other former ERE ministers to trial; and (3) most recently, furor over alleged sabotage of military vehicles in Thrace (Embtel 1833),/3/ question arises as to long-term prospects of Papandreou government.

Basically, govt is now paying for its accumulated mistakes over past year and half. PriMin's juggling act, of playing off one faction against another, which served him so well during early months in keeping party together, appears to be breaking down as party criticism of PriMin's leadership mounts. Pro-govt press, which was such valuable weapon in beating down periodic revolts which cropped up during 1964 is now increasingly critical of Papandreou. Cumulative resentment of Andreas and his activities is certainly a major cause of the problems which confront the PriMin.

Both left and right within Center Union are unhappy over PriMin's temporizing. Conservatives, always concerned over Papandreou's lenient attitude towards cooperation with left, are now disturbed at PriMin's acceptance of army's involvement in partisan politics. On the other hand, left wing of party, which has been increasingly critical of what it considers Papandreou's efforts to placate Palace, is now bitter at PriMin's decision to permit statute of limitations to be invoked in DEI case. Extreme left had been eagerly anticipating putting its old enemy, Constantine Caramanlis, in dock; however, PriMin's action, after building up leftist hopes since February, has snatched away this prospect at last moment. As pro-govt Eleftheria pointed out in last Sunday's editorial (Embtel 1847)/4/ PriMin's handling of DEI case has been "neither straight-forward, nor serious, nor brave."

Important elements within party, including two leading pro-govt papers, Eleftheria and To Vima, are currently attacking PriMin for his failure to heed their demands to remove present Army Chief of Staff Gen. Gennimatas and to carry out general purge of so-called right-wing "junta." PriMin, however, reportedly promised Palace last Feb that he would make no changes in military high command before end of year (A-739, 3/16/65)./5/ Moreover, Eleftheria editor Kokkas told Embassy officer that PriMin is indebted to Gennimatas for his help in keeping name of Andreas Papandreou out of Simos report on Aspida affair (A-1014, 6/12/65)./6/ In view of dilemma posed by two opposing sets of pressures, Papandreou may choose rather characteristic way out by kicking Gennimatas upstairs to be chief of NGDS. Much depends on degree of pressure exerted by two papers; should it subside, Gennimatas could well remain on.

Army, which from beginning has been unenthusiastic about Papandreou administration, is now widely disillusioned with his govt. First real jolt came with publication of so-called Operation Pericles plan in Feb, in which, much to distress of military leadership, PriMin used Lt. Gen Loukakis as his hatchet man in attempt to implicate army in exercise of partisan political activity in support of ERE 1961 electoral campaign (A-739). Now, "Aspida" case has further undermined PriMin's prestige with senior officers. Moreover, DefMin Garoufalias, who was considered conservative element in Cabinet, has demonstrated disappointing willingness to accommodate himself to some extent to PriMin game.

One feature present political climate is existence of rumors re possible army moves against Papandreou govt, fanned by extreme left. IntMin Tsirimokos this week told Emb officer he, too, was concerned about these rumors. While senior military officials have given no indication of such intentions, number of them have expressed concern in recent days about drift of current political situation. Retired Gen. Sakellariou, who was ousted last year as Army Chief of Staff, told Emb officers openly last week that it is essential Papandreou be "overthrown" before he drags country down to destruction. Certainly army leadership is strongly opposed to Andreas Papandreou, whom it regards as leftist sympathizer who might lead Greece out of Western camp if he ever came to power.

However, from all indications, talk of possible coup d'etat remains in rumor stage despite uneasiness it creates in political circles. Before military leadership would attempt such move, it would almost certainly seek Palace's approval. There are no indications, however, that King would be willing to go along with any extralegal solution at present time, despite the strong anti-Papandreou propaganda he is undoubtedly subject to from various rightwing sources. Palace was unquestionably upset by revelation of "Aspida" affair and involvement of PriMin's son (Embtel 1809)./7/ Particularly disturbing to King was implication that "Aspida" represented essentially anti-monarchy element in armed forces which might be used at a critical moment by its leaders as an instrument of political and/or military pressure against throne. However, King is aware that Papandreou is still popular in the country, particularly in rural areas. King presumably aware of dangers to monarchy of a struggle at this time with PriMin who still has masses with him.

Possibility always exists that significant segment of party might suddenly withdraw its support of govt and thus bring about Papandreou's fall. Major obstacle to this action is continued popular support for Papandreou, general fear of new elections, and inability of various discordant elements within CU to agree on successor to PriMin. FinMin Mitsotakis is recognized as most dynamic in Cabinet but has disadvantage of bitter opposition of liberals in party, led by powerful Vima newspaper. More likely choice would be DePriMin Stephanopoulos, who while not highly regarded, has few real enemies and whose relatively advanced age makes him more acceptable to other ambitious leaders. Some observers believe such attempt might be made this fall, when Cabinet conflict over govt's economic policy, and particularly question of agricultural price supports, may well erupt. Anti- Papandreou forces in govt would prefer to act before PriMin could suddenly call for elections to secure new mandate while his popularity still holds. PriMin, of course, would not take revolt against him lying down, and would certainly press King for elections. In event King refused to proceed to elections, Papandreou might well go to streets to make his case.

In sum, uneasy atmosphere prevails in Greek political world. Opposition press, taking advantage of Papandreou's troubles, has stepped up intensity of its attacks. These attacks may well concentrate on Andreas Papandreou, who remains PriMin's most vulnerable point. In view of this strained atmosphere, further incidents involving army or national security, whether real or contrived, might set off train of events which could threaten Papandreou govt.

However, armed with his temporarily invulnerable position vis-à-vis Greek electorate and his undoubted political cunning, Papandreou will probably be able to sustain himself at least during summer months.

Anschuetz

Washington, June 19, 1965, 3:19 p.m.

1559. Ref.: Deptel 1545./2/ Matsas called on Talbot June 18 to report Isik-Sgourdeos talks not progressing well because of unacceptable Turkish territorial demands. (It was not clear whether he was speaking under instructions.)

Said after three sessions Isik still proposing in exchange enosis area equivalent 18-20 per cent Cyprus. Said area north of line from Dhidhimotikon to Bulgarian border had been discussed. Matsas described proposal as exorbitant and expansionist; GOG was coming to conclusion GOT not negotiating seriously on basis enosis, GOG might be forced renounce talks and suggest GOT continue discussions with Makarios on basis independence. Pointed out this would be unfortunate development with Bandung II and another UNGA session in offing.

To Talbot question whether GOG had presented any GOG counterproposals, Matsas said none advanced. Turkish starting point too remote from anything GOG could sell Greek public. Claimed GOG started talks expecting GOT seeking face-saving formula, not expansionist acquisition. Claimed Turkish initial offer less forthcoming than last year. Talbot challenged this and reiterated line of Deptel 1545. As Talbot pressed need GOG counterproprosal, Matsas said Plaza report's recommendations for independent Cyprus inhibited making substantial concessions to Turks for something which many assume will come about naturally.

Matsas inquired re Kyprianou meetings in Washington, and asked if armaments discussed. Talbot confirmed that they were and that we had said we would be unhappy to see them on Cyprus. Matsas asked whether Kyprianou had said there were missiles on Cyprus; Talbot replied no.

Comment: While Matsas raised specter of abandoning talks, his tactic apparently was to spur USG into pressuring Turks to lower ante similar to gambit Costopoulos used in reporting first meeting to Anschuetz (Athens 1801)./3/

/3/Telegram 1801, June 4, reported that Costopoulos had stated that Turkey was seeking territorial compensation in return for enosis. (Ibid.)

Ref Embtel 1863,/4/ this was first conversation with Greek Embassy officials during which 672 miles has been mentioned.

Detailed memcon by pouch./5/

Rusk

Athens, June 30, 1965, 1649Z.

1917. Confrontation between King and PriMin over question of military leadership remains distinct possibility although pressures for compromise on both sides are at work. Embassy has reliable information (Embtel 1880)/2/ that King is disposed to make stand on question of retention of present Army Chief of Staff, and has apparently decided to either prevail upon Papandreou to accept this position or else demand PriMin's resignation. On other hand, both PriMin's personal secretary and his son Andreas have told U.S. officials in last few days that Papandreou is equally determined to remove Gennimatas and if King refuses, PriMin will resign./3/

In event confrontation does occur, likely outcome would be resignation of PriMin and his replacement by other member of govt, possibly Deputy PriMin and MinCoord Stephanopoulos. Key question is whether Stephanopoulos or other political figure could secure sufficient number of votes from own party to form govt. Support of 99 ERE deputies is probable, since most anxious to bring down Papandreou and would likely be willing to support CU govt led by acceptable figure such as Stephanopoulos for limited time. However, if new vote unable to obtain minimum of 50-60 deputies from CU ranks, then elections would be in offing, despite fact that almost no one (with exception of Papandreou) would want them.

Dangerous aspect of current situation twofold: (1) If new election held, Papandreou would in all probability be returned with approximately same strength as at present, and could conceivably receive even stronger mandate. This would be heavy blow to King's prestige, particularly since Papandreou, supported by left, would possibly make monarchy an issue in elections. (2) If Stephanopoulos or other CU figure succeeded in forming new govt, Papandreou might go to streets to try bring down such govt. With leftist support, Papandreou would have capacity to provoke serious demonstrations throughout country. At this point army might intervene, fearing that stability of regime were being shaken.

Whatever outcome, confrontation at this time (while Papandreou still popular) and on issue of army leadership would appear to be unfortunate step both from point of view U.S. and Greek interests. Even opponents of Papandreou in both govt and opposition ranks believe timing is not right for challenge to PriMin. They maintain that in fall, when economic problems reach critical stage, PriMin's popularity will fall sharply, and challenge to his leadership will then come from within his own party, from Mitsotakis forces. However, these anti-Papandreou forces within party might be reluctant to line up with Palace against PriMin now. Deputies would not now relish facing alternatives of elections on one hand or participating in coalition supported by ERE on other.

Indications are that King, undoubtedly under influence of rightwing advisors, believes that his leadership of armed forces is being eroded by army's involvement in politics and by its penetration by forces loyal to Papandreous (such as Aspida) rather than to throne. Therefore, King apparently is being persuaded that he must make stand now, rather than at later time, when his position might be weaker.

Embassy remains hopeful that head-on collision will be averted through realization by both sides that confrontation not in their best interests, and we are taking every opportunity to point out that confrontation would be damaging to nation's interests.

Anschuetz

Athens, June 30, 1965, 1929Z.

1921. I called this morning on PriMin. Embassy Political Counselor and Sossides of PriMin's staff also present.

PriMin commenced by stressing that his aim is to bring internal peace to Greek political scene. He had achieved this in part by taking firm and moderate stand on question of referral Caramanlis to the courts (Embtels 1864, 1829)/2/ although this had been unpopular step for him with many of his party.

Now he must face up to problem of taking politics out of the army. This means removing those within army who espoused cause of either right or left. He has therefore decided he must ask for MinDef Garoufalias' resignation within next few days and assume post himself. Garoufalias, in whom he has great trust and who would be highly competent in any other Ministerial post, is unhappily labeled as man of the Palace. Garoufalias strives to protect Palace interests but in order compensate Garoufalias does not act with appropriate vigor toward center elements who require discipline. His actions are constantly misjudged and he is thus no longer in position to do job necessary in keeping army free of politics.

Gennimatas, Chief of Staff, had also been labeled as a man of the King and was also unable to function effectively because he too is under fire from "the democratic elements". A new man is needed as Chief HAGS who would not be tarred with this brush and he, the past PriMin is going to advise the King that a change has to be made. He said he thought the King would agree to this change when he had presented his reasons for it.

I said frankly I am concerned at implications of confrontation between Palace and govt over question of military leadership. US interests in stability of Greece as well as our continuing contributions to Greek armed forces are basis legitimate interest in this question. I entirely agreed with PM that politics should be kept away from armed forces. While I agreed that govt, not King is responsible for policy determination, I am also aware that modern Greek history shows clearly that King has over period of time acquired a generally recognized interest in armed forces. Any severe shock to this delicate balance of powers could be dangerous and might even risk raising basic issue of regime. This would be tragic for Greece. For this reason I earnestly hope that a solution satisfactory to both parties could be found. I said that I am pleased PriMin will soon have occasion to see King in Corfu in connection with formalities following birth of Royal baby. This will provide opportunity for direct discussion and eliminate possible misunderstandings resulting from reliance on intermediaries. I expressed concern that departure of both Garoufalias and Gennimatas might create profound reaction in Palace and perhaps certain opposition circles.

PriMin bridled at inference his personal assumption of Defense portfolio could produce any anxiety. He was adamant that Gennimatas as a person would have to go but acknowledged that once agreement had been obtained to this move timing might be matter for negotiation.

Comment: Papandreou was in a very serious mood and showed a degree of stubbornness to my probing as to what the implications of the change in the military hierarchy might mean to the political fabric of Greece. He appears confident he can stand down King on this issue and will use the threat of resignation and elections in the event the King does not agree. He stated flatly no new government based on support of ERE could stand because it would be a travesty of will of people. He did not once mention Mitsotakis factor or allude to Kokkas attacks except indirectly, when he said his son Andreas is being blamed for all ills of Greece. He would not be surprised if they were to run out of issues to bomb him for, Andreas would be blamed for situation in Santo Domingo.

Garoufalias confided to me earlier this morning he did not intend to resign, that Papandreou would then ask King to sign decree revoking his (Garoufalias') appointment. If King refused, govt crisis would ensue and perhaps Garoufalias or Stephanopoulos would be requested to form government. This evening FonMin Costopoulos, a strong royalist, expressed concern that King would be in weak constitutional position if he refused to concur in Papandreou's assumption of Defense portfolio. According to Papandreou proposal Garoufalias would receive another portfolio. Houtas, present Minister Public Works and reliable from Palace point of view would replace Papaconstantinou as Deputy Min Def.

Anschuetz

Ankara, July 9, 1965, 1459Z.

33. Had long talk with Isik last night which began as review discussions on Cyprus but progressed into unexpectedly frank exchange on situation of Greek nationals in Istanbul and Patriarchate.

Re talks, Isik said dialogue continuing with Sgourdeos but getting nowhere. GOG still says it understands necessity for compensation to GOT if agreement to be reached on basis enosis but then says it has nothing to offer.

I asked what in circumstances they then had to talk about.

Isik replied this good question and answer is that, in effort keep talks going, he and Sgourdeos indulging in form of "mental gymnastics" which taking form not of real negotiations but of discussing various aspects of question on purely hypothetical basis. However, this type of shadow discussion could not go on indefinitely and, unless something more promising develops, he will have no alternative but to abandon idea of agreement on enosis and revert to settlement based on independence.

In painting this rather bleak picture, Isik again mentioned desirability of reaching agreement in order keep issue out of election campaign but did not press point as vigorously as he had before. However, this may have been more end of day fatigue than change of emphasis.

Isik took occasion once again express dissatisfaction with unfulfilled assurances of GOG to influence Makarios to improve situation of Turk Cypriots and said improvement in this respect remained essential to successful talks with GOG. He also referred to various statements and acts of Makarios which apparently designed impede talks but reemphasized that real problem is situation Turks on island.

This led to his observation that GOG attempting fan flames of situation of Greek nationals in Istanbul and draw analogy with that of Turk Cypriots, which obviously unreasonable since measures taken re Greeks are normal application of law such as is observed worldwide in situations where residence permits expire. If any analogy to be drawn it should be with Greeks of Turkish nationality whose status not in question.

I observed at this point that, without going into question of law, fact is that continuing eviction of Greeks from Istanbul lends itself to highly colored treatment with result that, rightly or wrongly, it does in fact have an impact in Greece similar to that of situation of Turk Cypriots here. Thus it is a practical problem which can affect progress of talks. Viewed purely pragmatically, could not something be done to alleviate this?

Isik hesitated and then said he did recognize this and had gone ultimate limit in trying do something but that action which would have effect of non compliance with law would provoke reaction far more difficult than existing situation where various means can be used to modify application of law without actually voiding it. Isik added he had been frank in saying same thing to Sgourdeos since he believed only hope of successful outcome of negotiations was to lay cards on table.

He then added, as though thinking out loud, that perhaps just as well that presence of Greek nationals in Istanbul should be gradually liquidated since, viewed long term, it was constant irritant in Greco-Turk relations. Same could also be true of Patriarchate, especially if present incumbent continued to rely on political support of Greece and also to play international role by exchanging messages, gifts, etc. with heads of state in manner not consonant with his position as a prelate in Turkey. In situation where Turkey had abolished Caliphate as symbol of universal Islam, not permissible that Patriarchate should arrogate role to itself for which Caliph had been deposed.

Here again I intervened to suggest that, whereas this might be Turkish position, matter does not necessarily look same from outside where, although understood that Patriarch of Istanbul does not have same authority as Pope, he is nevertheless recognized as first among equals and thus not unnatural that he should be regarded at times as spokesman for Greek Orthodoxy. For instance, was trip of Patriarch to visit Pope at Jerusalem last year inappropriate?/2/

Isik admitted that distinction could perhaps be made where contacts were purely religious but he once again stressed that political connections which Patriarch has been maintaining are definitely improper in eyes of GOT and could lead to removal.

I might add that, in cases of both Greeks in Istanbul and Patriarchate, foregoing is my own distillation of long and frank discussion in course of which my probing evoked replies which Isik would hardly have volunteered. Views which he did express, however, even though on personal basis, would indicate that, as prospect of quid pro quo for enosis settlement fades, GOT will be taking harder look at alternatives.

Hare

Athens, July 9, 1965, 1725Z.

37. Incipient political crisis appears suddenly to have crystallized following letter from King to PriMin allegedly delivered last night by Chief Royal Political Bureau, Choidas, informing PriMin that King is prepared to receive him but not concur in the removal of DefMin Garoufalias or Army Chief of Staff Gennimatas (contents letter separately reported [less than 1 line of source text not declassified]). Apparently letter asserts, inter alia, King has always acted scrupulously within framework of his constitutional powers, and reproaches Papandreou not only for having failed to support the King, but for having permitted impression to grow that King is prepared to act extra-constitutionally. Existence of letter has not yet been publicly revealed, but may result in resignation of government.

Festering political situation which has developed as result of Palace and ERE alarm at alleged efforts of Papandreous and certain other Center Union elements to establish political control over the armed forces may well explode as result of this sudden action by King. According to some reports King has decided not to concur in any changes in leadership armed forces at this time, and is determined to push for showdown with PriMin and his son Andreas before what King regards as the corruption of the armed forces becomes more extensive and the position of EDA and extreme left even stronger. There have even been some rumors that King prepared to accept government under a military leader if satisfactory government, willing and able to confront demonstrations and strikes which Papandreous and left might foment, cannot be formed.

Embassy position has remained unchanged from that which we have taken ever since collision between King and PriMin first became real possibility. As reported in my conversations with Choidas (Embtel 1880)/2/ and PriMin (Embtel 1921),/3/ I have consistently expressed opinion that it should be possible for a compromise solution to be found which would permit persons mutually acceptable to PriMin and King to be named to the positions of DefMin and Chief of Staff of Army (subject to questions of timing) and that raising of the question of the regime would be tragedy for Greece from which ultimately only the Communists would profit. This position has naturally been received with a lack of enthusiasm by those elements on both sides who hoped to win the unqualified support of US.

Last night at dinner at which ERE leaders Kanellopoulos, Papaligouras, Tsatsos, Rallis and Theotakis were present, I reflected similar views. ERE leaders were highly emotional over current situation but revealed very little evidence they had carefully considered all implications of confrontation between King and PriMin at this time.

King has been isolated in Corfu presumably depending principally upon Queen Mother, his political advisor Choidas and his long-time confidant, Major Arnaoutis, as advisors and intermediaries. In extensive conversation with Choidas June 23 reported in Embtel 1880 I expressed serious reservations as to wisdom of direct collision between Papandreou and King under current circumstances. Since that time I have twice seen him socially. On each occasion he asserted he wished to talk with me again and promised to get in touch with me, but conspicuously failed to do so. I had also expressed my own opinion clearly to General Papathanassiades, Marshal of the Court, who asserted that he entirely agreed and that he had transmitted not only his own but my views to the King.

My present feeling is that the King has acted with imprudent haste and abruptness, thereby incurring serious risk to internal stability which might possibly have been avoided. If King's action results in establishment of relatively stable new government (presumably headed by a Center Union personality depending principally upon ERE support for its existence) without bringing EDA and the Papandreous even closer and without possible violence, he will have proved to be shrewder judge of the situation than I am prepared to hope./4/

Anschuetz

Athens, July 23, 1965.

123. Re Embtel 122./2/ Embassy's current position regarding solution present political crisis,/3/ which we have coordinated [less than 1 line of source text not declassified], is as follows:

A) Situation has not developed to point where U.S. attitude might be decisive. Consequently we are endeavoring to maintain greatest possible discretion.

B) In circumstances where we felt it might be helpful, we have privately expressed view Novas solution which, though not very promising, at least has advantage some declared adherents, would not be prematurely abandoned.

C) With regard Stephanopoulos, we have noted this formula depends upon willingness of Stephanopoulos, certain other C.U. leaders, and particularly such newspapers as Vima, Nea and Makedonia to force acceptance this solution on Papandreou or proceed without him. Unless and until support these elements is definitely acquired it would be dangerous to abandon Novas. In principle we have no objection to Stephanopoulos or "Stephanopoulos plan", which in theory would preserve a wider measure of unity in C.U.

D) We have not demonstrated any enthusiasm for new effort to find compromise between King and Papandreou. This would probably leave Papandreou in even more powerful position in C.U. Moreover, it is highly unlikely King would consent. We recognize, however, Papandreou may yet emerge victor and that we may have to live with him. We are endeavoring avoid actions which might prejudice U.S. position in this eventuality.

Given incredibly sensitive political acoustics in Athens and virtuosity of Greek talent for misrepresentation and distortion, Embassy position is constant subject for local exploitation. For example: King has been quoted as saying I discouraged Stephanopoulos from forming or joining government following Papandreou resignation; rightist elements have charged that U.S. is no longer interested in fighting Communism; Andreas Papandreou told me he knows Americans are saying that he must go. This spectrum of commentary suggests that although our attempt not to become involved may not prove to be completely successful, the effort is at least a valiant one./4/

Anschuetz

Athens, August 10, 1965.

229. Choidas, Chief Royal Political Bureau, telephoned yesterday evening. He said he wanted me to know that even though CU party caucus yesterday afternoon had produced only 26 deputies who supported Stephanopoulos as against 116 who supported Papandreou, King was confident Stephanopoulos would continue his efforts. Stephanopoulos had assured King, through Choidas, that he would produce a solution. Palace hoped such solution would be Stephanopoulos' agreement to accept mandate himself. Embassy's good offices would be appreciated. King himself also commented to an American friend yesterday that he hoped Embassy could encourage Stephanopoulos to move forward.

Later in evening [less than 1 line of source text not declassified] and I received visit from CU Deputy Tsouderos. Tsouderos said he had just come from meeting at which Mitsotakis, Tsirimokos and Papapolitis were working very hard to persuade Stephanopoulos that it is essential he continue his effort. A word of encouragement from Embassy at this point could be extremely important. Tsouderos said there is increasing amount of disgust and unhappiness among 116 deputies who had supported Papandreou yesterday. Although it is not at all certain that all 26 who had supported Stephanopoulos yesterday would necessarily support him if he proceeded without formal support of CU, there is undoubtedly significant number of deputies who had supported Papandreou who would switch their allegiance if Stephanopoulos' determination to accept mandate and seek vote of confidence became clear.

I acknowledged that if Stephanopoulos solution failed, other possible solutions are certainly not very attractive. Stephanopoulos is now in awkward position to continue in light his public statements making acceptance of mandate contingent on approval of CU. Moreover, performance of Stephanopoulos' sponsor, Lambrakis, and his papers Vima and Nea have been extremely disappointing not to say ambiguous. Despite his professed private endorsement of Stephanopoulos plan, it seemed pretty clear Lambrakis had in fact done virtually nothing at the last minute to encourage those who might otherwise have been tempted support Stephanopoulos. Even though Stephanopoulos succeeded in forming govt and even though an additional thirty or forty CU deputies subsequently adhered to Stephanopoulos, serious situation would remain with Papandreous outside govt, resulting de facto popular front. Problem would be particularly awkward if powerful Lambrakis press continued support Papandreou. Nevertheless Stephanopoulos solution still seemed least unattractive and I hoped Stephanopoulos could be persuaded not to abandon his effort until it is certain he could not succeed. Tsouderos visited Stephanopoulos after having left us.

This morning I received a telephone call from Stephanopoulos. Asked him how he saw situation and whether he was prepared to continue his effort. He said he would inform King at noon today he could not under circumstances accept mandate. I commented it is obvious that solution must be found and asked whether he had any other ideas. He replied that he had, and that he would like to talk with me about them soon.

Comment: It was subsequently confirmed, as I surmised, that there were a number of other deputies in room when Stephanopoulos telephoned.

As reported above, I have within last 24 hours said to Tsouderos and clearly implied to Stephanopoulos himself that Stephanopoulos should persist in his efforts. Combined votes of ERE, Progressive Party, 25 votes of those who participated in Novas govt, and 26 votes of those who supported Stephanopoulos yesterday in CU caucus would be arithmetically sufficient to form a govt. Under these circumstances I considered Embassy should not withhold word of encouragement which might just possibly provoke necessary impetus to break current impasse and provide interim political solution. Situation had developed to point where issue apparently hung in balance and where cautious effort on our part justified.

[less than 1 line of source text not declassified] believes within limitations of resources currently available Embassy has provided maximum support to Novas and Stephanopoulos consistent with discretion which we have been endeavoring maintain. In light this situation I hope Dept will be in position to act affirmatively at appropriate moment on recommendations which I have made re PL 480 program./2/ Unfortunately, however, that moment has not yet arrived and may not for some days.

King acknowledged in private conversation with friend this evening that he is very much at a loss at this point. He had originally been led to believe Stephanopoulos could accumulate about 70 CU votes. Even after Papandreou's victory in CU caucus yesterday afternoon, King had clung to hope Stephanopoulos could be persuaded to accept the mandate./3/

Anschuetz

Athens, August 20, 1965, 1825Z.

279. As Greek political crisis enters its fifth week it is becoming increasingly clear that viable solution to present anomaly is nowhere in sight. Even if Tsirimokos' effort to form govt is successful--which does not seem too likely as of this writing--country must expect turmoil for months to come./2/ Whatever govt is formed under present circumstances will undoubtedly be an unstable one, with a razor-thin majority in Parl. If Tsirimokos does indeed secure vote of confidence next week, his continuation in power will be dependent on votes of an extremely disparate group, ranging from rightist ERE to his own centre-leftist followers, and will count for support upon such unpredictable personalities as Progressive leader Markezinis and EPEK head Papapolitis, any one of whom could suddenly pull rug out from under Tsirimokos govt by withdrawing support.

Even more serious in its effect on political stability is fact that former PriMin Papandreou and his followers will be touring country, beginning tomorrow, in effort to keep atmosphere as turbulent as possible. Continued demonstrations both in Athens and in provinces are in prospect, creating conditions hardly conducive to serious deliberation by Parl in session. Although demonstrations have been frequent, few have been marked by violence. Eventually serious violence may take place, particularly if Papandreou supporters feel their own strength ebbing. And of course if Papandreou takes to road ERE Party may consider it has to do likewise unless it wishes to leave field to Papandreou forces.

Unfortunately, this prospect of continued political instability comes at time when Greece is facing problems of major dimensions both on domestic and foreign fronts. Although Cyprus has been relatively quiet during first month of Greek political crisis, it is at least questionable whether it will continue to remain so in months ahead. Equally urgent are pressing economic problems, characterized by the continued fall in foreign exchange reserves and an increasing trade imbalance. Business confidence will undoubtedly be deeply shaken if prospects for eventual stable govt do not improve. A govt without a solid foundation--either in Parl or among general public--will hardly be in position to make firm (and probably unpopular) decisions in the coming months.

In addition to prospects for continued instability, two aspects of current crisis are particularly disturbing. First is that as result efforts to prevent extension Papandreou's influence into military and security forces, King had directly descended into political area with result that the "regime" issue has gradually arisen. And this despite repeated denials of Papandreou that there is any "question of monarchy" involved or that CU would raise it in future elections./3/ Anti-royalist sentiment is being continuously inflamed by such pro-Papandreou publications as powerful Lambrakis syndicate (To Vima and Ta Nea) which daily carry attacks on King. Vima for example recently carried editorial critical of King under heading: "Crown showing contempt for people." Slogans chanted and paraded by leftist-led demonstrators for Papandreou are becoming increasingly bold; although initially anti-monarchist slogans concentrated on Queen Mother ("the German woman must go"), in recent days they have included King himself. One banner in Aug 17 demonstrations read "people don't want you--take your mother and go." Thus, regardless of promises of Papandreou camp that they are not raising monarchist issue, in effect it has already been raised.

Second disturbing aspect is achievement of extreme left in making its catchwords the slogans of center through its collaboration "at the base" with followers of George Papandreou. For first time since bandit war Communists are no longer isolated but have succeeded in merging at popular level with much larger masses of center. It is difficult to determine what is Communist demonstration and what is not, since slogans have become virtually identical, except that Communists cleverly insert slogans peculiarly their own on such non-Greek topics as Vietnam, "imperialism," etc. While CU supporters provide bulk of demonstrators, Communists often provide leadership and hence are able to control demonstrations.

It seems clear that any long-term solution to current crisis must come through elections, however distasteful this may be to many quarters, including the Palace. As of now Crown maintains (quite rightly) that present climate is completely unsuitable for elections, and electoral campaign in current tense atmosphere would very probably be characterized by serious violence. Even more important from the Palace and conservative point of view, because current tide running in Papandreou's favor, former PriMin might well equal his 1964 feat of 53 per cent of popular vote. There are few serious politicians, even in his own party, who would welcome prospect of Papandreou returned with heavy popular vote (which he would consider vindication of his struggle with King) and probably determined to punish those he considered responsible for his troubles in Palace, army, and his own party. Further, a Papandreou victory would not bring with it the tempering influence of more conservative leaders of party such as Costopoulos, Novas, Mitsotakis, etc. The influence of his left-leaning son Andreas in govt would undoubtedly be greater with so many of other major figures departed. Further, heavy vote in favor of Papandreou could only be interpreted as blow to King, despite Papandreou's denial that monarchy question would be involved; very possibly Papandreou would move to limit role and influence of Crown in Greek political life. Finally, return of Papandreous would probably increase unwholesome political tensions in military and security forces.

For these reasons, King, supported by ERE, Progressives and sizeable element of CU, strongly opposes elections, and would consider instability for indefinite period preferable to return of Papandreou. However, as unstable situation continues, pressure for elections from Papandreou will undoubtedly increase and idea might well gain support even among other elements (now opposed to elections) as only available means of clarifying situation.

Anschuetz

During the period 1965-1967, senior U.S. policymakers, concerned that the return to power of George and Andreas Papandreou could open the door to the radicalization of Greek politics and permit the Communist Party to obtain influence in Greece, debated possible courses of action within the 303 Committee. (Concerning the role of the 303 Committee, see Note on U.S. Covert Actions and Counter-Insurgency Programs, above.) Some officials in the Johnson administration believed that the United States should take active steps to strengthen a moderate regime as well as weaken the political base of the Papandreous, leaders of the Center Union Party. The President's Special Assistant for National Security Affairs McGeorge Bundy opposed such a course of action. He contended that reporting on the situation in Greece did not bear out such apprehensions and that political lines were not clearly drawn. The 303 Committee first tabled the issue and later, upon considering it a second time and not reaching a decision, referred the matter to Secretary of State Dean Rusk. Rusk rejected such a program because he believed the security risk outweighed any possible gains that could be achieved. Ultimately, the Johnson administration endorsed no such programs for Greece.

Athens, September 5, 1965.

369. [7 paragraphs (2 pages) of source text not declassified]

[8 lines of source text not declassified] Embassy has concluded George Papandreou's return to power should be avoided if this can be done without a direct and open confrontation with him. George Papandreou at this moment commands wide popular support among Greek people. This popularity has temporarily been raised to artificial levels in current crisis by Papandreou's clever exploitation of latent hostility towards the Monarchy. I am keenly aware that inasmuch as we may have to deal with Papandreou again in future, utmost discretion and avoidance of open hostility toward him are essential.

Andreas' motives are difficult to present categorically. In my assessment, based on half dozen extensive conversations with him, Andreas is neutralist, ambitious, amoral, and emotionally unstable. Although conclusive proof has not yet been adduced I believe Andreas is probably a leader in Aspida and that he hopes eventually to achieve a measure of control in army which would be exercised as decisive element in Greek political life.

In his view the weight of the American position in Greece, political and military, is an obstacle to "independent" foreign and domestic Greek policy which he advocates. I believe Andreas would seek significantly to reduce Greek military expenses, would progressively remove Greece from close NATO alignment, look increasingly toward Soviet bloc both as growing market for Greek products (30 per cent of Greek exports now find their way to the Soviet bloc) and as source of aid to fill gap created by decline in Western aid (U.S., OECD, NATO defense support). His natural ally in implementing such a policy is extreme Left and Communists. Explanation of his dubious role in Cyprus issue and his opposition to an active enosis policy may lie in his desire to avoid a position which would be offensive to Soviet Union and Communist elements to whom he seems to be looking for support in other areas. Under these circumstances, it is of great importance to obtain better measure Andreas' relationship Communists and extreme Left, determine sources and magnitude his financial resources, and circumscribe to extent possible his political power, actual and potential.

Greece is small, poor country in strategic area of world. Gradual elimination of Western economic aid, reduction of East-West tensions, increased trade between Greece and the bloc, frustration over the Cyprus situation, and current political impasse with its implication for viability of regime itself have all combined create movement of new dimensions in postwar Greek political life. This situation presents new opportunities for Soviet bloc and perhaps other unfriendly forces such as Gaullist France and Red China. Objective evidence such as organization of public manifestations, program of personal threats and intimidation, and rumors regarding substantial funds available to Andreas clearly suggests Communists are not standing aside. Kostopoulos and Zolotas have both recently mentioned to me that drachmae resources of Western European banks have mysteriously evaporated.

Changing factors in international political life have also reduced somewhat weight of American influence here. We recognize precisely because American influence is slowly declining it must be exercised with increasing caution and discretion. [13 lines of source text not declassified]/2/

Anschuetz

Washington, September 10, 1965.

[Source: Department of State, INR Files, 303 Committee Records, Greece, 1965-1967. Secret. 1 page of source text not declassified.]

Athens, September 17, 1965, 1525Z.

450. In brief private exchange last night following dinner which King Constantine gave in honor of Astronauts Cooper and Conrad, King referred to current political situation.

King said it imperative Stephanopoulos succeed in effort form govt although it is not yet quite clear whether Stephanopoulos has in fact obtained assurances of six or seven additional votes necessary to obtain majority. He suggested that if Embassy had any influence such influence could be terribly important in present circumstances. If current effort to form govt fails it is difficult to know what to do next.

King recognized that even though Stephanopoulos were to receive vote of confidence, one could not predict how long his govt would last. It is of greatest importance that new govt not be formed on basis of a commitment to hold elections notwithstanding fact elections must eventually be held. It would be most unfortunate if elections were held now on basis of who is right and who is wrong. Important thing is to form govt of ostensibly indefinite duration thereby eliminating prospects of early election which provide Papandreou with hold over substantial number of his deputies. When activities of left have been controlled, electoral system changed, and appropriate situation had been created, quick decision could be taken to hold new elections. King expressed opinion elections should be held under proportional system. Although proportional system might strengthen hands of Communists, Communists would be clearly visible and power of Papandreou would also be reduced.

I observed that we had always recognized that whatever government might be formed from present Parliament should be regarded as evolutionary, and agree with him that elections must eventually be held. I added I was particularly pleased that records of Crown Council meeting just published had clearly established fact King had informed Papandreou on night of Papandreou's resignation that he was prepared to give Papandreou Defense portfolio as soon as Aspida investigation had been concluded and that he was also prepared to accept Stephanopoulos or any other CU deputy as DefMin pending completion of investigation.

Comment: King did not specify what remedy he might seek in event current effort to form government fails nor did he specifically exclude extra-Parliamentary solution. Nevertheless I found reassuring his reservations regarding durability of a govt formed from present Parliament and recognition of necessity for elections when appropriate conditions had been created.

Anschuetz

Washington, September 24, 1965.

SUBJECT
Cyprus

PARTICIPANTS
Hasan Isik, Turkish Foreign Minister
Ambassador Turgut Menemencioglu, Turkish Embassy
Haluk Bayulken, Director General, Ministry of Foreign Affairs
Ilter Turkmen, Chairman for Policy Planning, Ministry of Foreign Affairs

The Under Secretary
Raymond A. Hare, Assistant Secretary for NEA
George T. Churchill, Officer-in-Charge, Turkish Affairs

Isik opened the discussion on Cyprus with the observation that the governmental crisis in Greece had brought efforts to settle the Cyprus question to a standstill. Even with Papandreou in office, there had been only a slim chance of reaching a mutual understanding; now there is no reason to hope for progress. He said he had just spoken with the Greek Ambassador (to the United Nations)/2/ who said his government was trying to find a solution. However, it was clear that even with the good intentions of Greek officials, the situation in Greece was not conducive for a settlement. At the same time, Isik said, time is running out. It would be unfortunate if Cyprus developed along the same lines as Kashmir. We must act promptly to prevent this. He said he realizes the United States Government wants to help find a solution, but it would be helpful to know what the United States now proposes to do.

Mr. Ball agreed that the present situation in Greece complicates the problem. Any Greek Government for the foreseeable future will be working with a very narrow margin and will not be in a strong position to negotiate. It was the presumption at London that any Greek Government would have to negotiate on the basis of enosis with compensation to Turkey. A weak government in Athens, such as we can expect for some time, would be unable to cede territory. This does make the prospect for settlement very difficult. If we accept the premise that Greece can only negotiate on the basis of enosis, we would have to examine the alternatives. One of these is negotiations between the Turkish Government and the Government of Cyprus, although we recognize this presents difficulties for the Turks, and is, therefore, an unlikely avenue.

Being frank, Mr. Ball said it is very difficult to say what the United States might be able to do under these circumstances. We want to see some kind of agreed solution, which is the only kind that could be permanent. Even if we were in a position to bring about a settlement by force, it would be unlikely to be a permanent solution. We had hoped a period of calm on the island would allow an evolution toward some kind of solution. This apparently has not happened. However, Mr. Ball said, we are not entirely clear as to what is happening on the island, or what shape Makarios' ambitions are taking. He said he would be interested in Mr. Isik's assessment of the situation and his suggestions as to what the United States might usefully do.

Isik responded that the United States must do its best to avoid a settlement that would not be satisfactory to Turkey. This was the most important element. Makarios is moving continuously toward his objectives. He is always trying to create unrest. Now Makarios is offering to improve the living conditions of the Turkish refugees. This seems a good sign on the surface, but is really only another attempt to maneuver the Turkish Cypriots into accepting the status of a minority. The Turkish community rejects these blandishments, but individuals, of course, are only human. The Turks have been living under conditions of hardship for a long time, and Makarios' offer will undermine morale in the community. Isik said that Makarios' action on the electoral law showed clearly what his real intentions are. But Turkey cannot accept further faits accomplis. We must find a way, he said, to prevent a further deterioration of the situation. If Makarios feels he can act, he will continue to move along his present path, and this will prove disastrous. Security lies in preventing Makarios from acting.

Isik went on to say that Turkey's relations with Greece could not be improved unless the Cyprus problem could be resolved. Turkey and Greece have implicitly agreed to avoid either enosis or partition, unless as part of a negotiated settlement. Annexation by Greece at this point would result in a direct confrontation.

Mr. Ball said we had made clear to Makarios on a number of occasions that we objected to unilateral revision of the London/Zurich Agreements, and we would continue to do so. We have also pointed out to him that if he proceeded with constitutional revisions, this would be a course of action unacceptable to the entire international community and a source of danger. It has been our feeling, Mr. Ball said, that Makarios has been more cautious after this warning. Isik responded that his actions were cautious but continuous.

Isik confessed that his Government was at a loss as to how to act under present circumstances. He said he was studying the situation carefully, and was interested in discovering what Turkey and the United States might do together. Mr. Ball assured Isik that the United States was prepared to do anything possible to facilitate a solution.

On the question of Cyprus in the United Nations General Assembly, Bayulken commented on the assignment of this issue to the First (Political) Committee. The Committee, he said, would determine when the issue would come up before the Assembly. He said the Turkish Government was working for a "procedural" (non-substantive) resolution. He felt that at least some of the unaligned countries would support such a resolution, although certain of these countries might feel themselves bound by the previous Cairo Conference resolution on Cyprus./3/ The up-coming Afro-Asian Conference in Algiers on October 28 might also affect the situation. A non-substantive resolution might be backed by NATO and other key countries. The attitude of India and the UAR is still unknown. Bayulken felt the chances for a non-substantive resolution were about fifty-fifty at present, but that strong support from the United States and the Latin American countries would ensure success, or at least prevent a resolution favoring Makarios. The danger, Bayulken pointed out, is that a resolution might be passed which would seem harmless but could be read by the Greek-Cypriots as a victory. If this were to happen, it would ruin any chance of working out a solution to the Cyprus problem.

Athens, October 19, 1965, 1530Z.

645. Ref: Embtel 597./2/ In past week Embassy has intensively reviewed present political and economic dynamics in Greece and possible instruments available to mitigate adverse trends. While picture has many uncertainties and while indeed our information has many gaps, I have reached following current conclusions:

1. Strains on Greek political fabric are more severe today than at any time since recovery from civil war and may not be containable. With far right and, more aggressively, far left nibbling at edges, fractured center is enmeshed in uncompromising power struggle between foxy old Papandreou and those former colleagues who have dared oppose him and son Andreas. As result, Greece is now weakly governed. Nor is any substantially stronger government in prospect.

2. Ultimately, this struggle of center forces must be taken to electorate. There is substance, however, in fears held by opponents of Papandreous that election campaign in present tense atmosphere would undermine if not destroy effectiveness of Greek political center for years to come and open field to left-right dichotomy of sort Greece has so calamitously experienced before.

3. Key to avoiding that prospect in next few months is ability of present government or one like it to muster support of workable majority of Deputies when Parliament reconvenes November 15. With current 152-148 edge tenuously based on alliance of ambitious rivals brought together by common opposition to Papandreou and to immediate elections, it will not be easy for Stephanopoulos to overcome timidity of other Deputies who are said to want to bolt Papandreou but to fear they would be dead ducks if he succeeded forcing early elections. Outcome depends on confidence current government can generate in its survivability.

4. Meanwhile Greece is sliding into sharp double-headed economic strains, on which Embassy has commented in series of recent messages. On international payments front, firm fiscal management, emphasis on import substitutes (e.g., in meat production) and other measures should in long run stand good chance of restoring favorable payments balance on which remarkable Greek development has rested since currency reform of 1953. However, trend of declining reserves in relation to external obligations probably cannot be corrected this year by measures GOG capable of taking. Serious payments difficulties loom just ahead. I am assured these could gravely undermine confidence of drachma if GOG unable to find necessary financial resources or if accompanied by political turbulence here.

5. Condition of domestic economy also causing anxiety as fiscal stringency becomes acute. Seeds of trouble lie in some long-term factors, but are accentuated by uncovered costs of Papandreou economic and social programs and by very large wheat surplus produced by past year's good weather and high subsidies. Administrative immobility reflecting political paralysis of recent months has also had effect. GOG has already cut back capital development program and may shortly have to interrupt work or at least payments on some ongoing projects unless new resources found. While economy still looks reasonably good to ordinary man, it is in fact highly vulnerable to economic and psychological shocks.

6. GOG defense policies and foreign policies do not at present time show signs of deterioration similar to those evident on domestic political and economic fronts. Greece continues to waffle weakly on Cyprus question, but that is old story. A new Cyprus crisis this fall would of course further complicate domestic situation here.

7. In sum, Greece faces imminent and heavy pressures on stability and progress achieved in past dozen years. Among limiting and hardly satisfactory political alternatives available, I now believe these pressures would best be resisted by continuation for some months of centrist government without Papandreous. Even if Papandreous should be returned to power in elections sometime in 1966, government then headed by them might be less unsettling to Greece and to our relations with Greece than if they were to ride into office on today's emotional tides.

8. As indicated above, I believe there is small hope of averting political crisis unless measures taken to contain worst of economic strains. GOG has already committed itself to some difficult steps, e.g., its decision to substitute 100,000 tons of wheat for imported corn feed. Officials tell us GOG is cranking up to take other steps (Embtel 644),/3/ but within life expectancy of present GOG these at best will be ameliorative rather than corrective. Effectiveness of such measures may in fact depend, as GOG argues, on Greece's ability to get some external assistance. I believe any such aid at this stage should be precisely focussed on immediate fiscal and economic problems. Its object would be to get prompt economic effect and to indicate continued sympathetic interest in Greece. It would thus improve psychological climate in which Stephanopoulos government struggling to meet most urgent problems, but if well handled would not cost us influence with successors if Stephanopoulos govt should subsequently be overthrown. Ensuing paragraphs discuss possibilities and identify those I recommend.

9. To ease balance of payment strains, neither imports nor exports look amenable to constructive manipulation in short term. GOG has focussed on getting USAID program loan as tidiest instrument among available levers to meet combined problem of international payments, drachma shortage in investment budget, and psychic requirement to avert slump in confidence of traders and money market. Greeks have considered but, as Department knows, strongly resisted drawing IMF tranche on grounds it would have reverse psychological impact. (Zolotas says IMF staff agrees.) I am not sure they have yet looked hard enough at possibility of getting relief this winter through arrangements with Exim, World Bank or OECD consortium. In view of urgency of problem, Embassy urging GOG to explore all possibilities, not just US program loan, and to apply any measure of discipline permitted by exigencies of situation. I do not yet see how GOG can overcome short-term payments crunch and would welcome Dept's suggestions.

10. To meet growing shortage of drachmae available for upcoming commitments, GOG can choose one or mixture of several courses: moratorium on new capital works and slow-down of current capital budget projects, cut in military outlays, or negotiations of new drachma-generating loans. Naturally it is looking to latter, though capital works will also be slowed.

11. On particular problem of grain production and needs, GOG is progressing with plans for handling a considerable part of its wheat surplus by designating 150,000 tons for distribution in mountain villages, 1,000,000 tons for poultry and livestock feeding, and remainder for sale abroad. Ultimately several hundred thousand tons likely be sold to foreign buyers, with good chance that bloc countries will take substantial part. Best estimate of Ag Attaché is that GOG cannot in any circumstances succeed in coming year in displacing as much as 100,000 tons of corn with wheat for feed. Thus in Embassy's judgement GOG will require 200,000 tons of imported corn to meet needs of starch, poultry and cattle producers.

12. Taking all factors into account, I recommend following USG decisions as urgent next steps to help limit risks of major political or economic turbulence this winter and to encourage constructive trends without assuming responsibility for costs of mistaken past Greek policies:

A. As sole practical economic gesture at this time, to offer 150,000 tons of corn by PL 480 sale Title IV plus 50,000 tons under "usual marketing" to meet full requirements of starch industry and about one half requirements of poultry and livestock producers heretofore met by corn. Details of suggested agreement spelled out in separate telegram. This action if taken promptly would help GOG hold down payments deficit and meet substantial part of producers' demands for traditional feedgrains while forcing Greeks to start adapting to soft wheat as feedgrain. It would hopefully be read as sign of continued US belief in and encouragement of Greece. To produce maximum political and economic effect I urge that such agreement be concluded or intention to conclude such agreement be announced before convening of Parliament on November 13.

B. To examine carefully with GOG all likely sources of prompt international financial assistance other than USAID loans and to support reasonable Greek requests of prospective lenders.

C. To begin consideration of direct US concessional loans, with expectation decision could be made as situation evolves further in coming weeks.

D. To postpone consideration of Greek feelers for invitation to PriMin to visit Washington until we see situation after Parliament reconvenes and after UNGA considers Cyprus (unless, as now seems highly unlikely, Greeks in meantime come up with new ideas on Cyprus that we would wish to discuss with them).

E. To tidy up certain requests we have pending with Greeks. With agreement for VOA Gamma site now confirmed by Stephanopoulos government, top priority is settling marathon joint-use land issue. To avoid further encroachments and other difficulties, I strongly recommend we request GOG promptly expropriate these lands with costs to be borne by USG. Acquisition of additional 27 acres for use for personnel housing at USAF base at Heraklion is also pressing need. By acting promptly we can profit from present readiness GOG to be accommodating and at same time US dollar payments involved in these transactions would provide additional foreign exchange for Greek reserves.

Talbot

Washington, October 21, 1965, 7:05 p.m.

457. Cyprus: Athens 647; Ankara's 454./2/ As a result of Greek-Turkish contacts at UN, and more settled governmental situations both Athens and Ankara, more attention being focused on Cyprus issue.

Although Isik professed acceptance no result of dialogue with GOG during talks Washington (Deptels 278 and 279 to Ankara),/3/ in recent conversations Ankara he has emphasized need to recommence (Embtel 454). Greeks have implied further discussions enosis not practicable because GOG unable in near future commit itself to compensations satisfactory to GOT, but there are indications GOG still desires further consideration enosis. Both Athens and Ankara seem to be jockeying around re resumption dialogue for reasons perhaps associated respective tactics at UNGA.

We believe some action might be desirable to clear atmosphere or nudge parties into further consideration settlement possibilities and action need not await playing out UNGA discussions. This is important since it appears extension mandate UNFICYP (due discussion around Dec. 15) likely be difficult if there has not been forward movement on solution discussions.

Ambassadors should seek opportunity make following points:

1. In Athens: Urge GOG to resume Sgourdaios-Isik talks. No progress toward settlement seems possible until Athens has cleared atmosphere by making some sort of counter-proposal to the initial enosis discussions. Notwithstanding comments contained Embtel 647, if Greeks can reopen meaningful dialogue and present counter-proposal, way might be opened to further progress in this and other fields. By showing willingness continue talks, GOG would prove to world it in fact desires settle Cyprus question and Turk charge Greeks not interested in talking about settlement would be blunted. Reaction to "Turkish blackmail" might have been expected, but we would hope GOG would not over-react to recent Urguplu remarks./4/

2. In Ankara: Being careful to avoid giving Turks impression we engaged in joint planning, Ambassador might draw on materials furnished so far in effort to stimulate Foreign Ministry's consideration various alternatives, as purely intellectual exercise. While suggestion made to Isik in Washington that GOT should consider bringing GOC into talks elicited no enthusiasm, we should explore whether new government might be able to face up to fact that sooner or later GOT must communicate in some way with GOC if independence is to be discussed./5/

3. In Nicosia: We appreciate comments contained Embtel 172,/6/ which will be taken into consideration in formulation of Dept's next steps.

Rusk

Ankara, October 22, 1965.

472. Refs: Embtels 416, 452, 454; Deptels 278, 279; Nicosia's 172 to Dept./2/ Proposals re Cyprus Issue.

/2/Telegram 416 from Ankara, October 9, reported on a conversation with Isik. (Ibid.) Telegram 452 from Ankara has not been found. Telegram 454 from Ankara is summarized in footnote 2, Document 209. Regarding telegrams 278 and 279 to Ankara, see footnote 3, Document 209. Telegram 172 from Nicosia is summarized in footnote 6, Document 209.

Embassy has reviewed Cyprus question in context of Demirel's victory,/3/ FonMin Isik's earlier discussion in US re Cyprus, and remarks of Turkish officials during Ambassador's initial calls. We have also taken into account helpful suggestions contained in Nicosia's 172 to Dept and attitude of Greek Government as reported by Embassy Athens. Against this background, it seems to us that major elements in current situation are following:

1. It is improbable that bilateral Greek-Turkish talks will be resumed before UNGA Cyprus debate despite Turkish efforts to renew discussions.

2. Turks believe they have commitment from us to support procedural resolution at UN. Even assuming US as well as possible Soviet support, Turks are concerned that majority of GA will approve substantive resolution, perhaps including reference to "self determination" for endorsement of Galo Plaza report.

3. Looking beyond UNGA vote, over which Turks have limited control, indications are that Demirel is anxious to try to achieve early resolution of Cyprus question so that he can devote his attention to Turkey's domestic problems. Compared with predecessor coalition government, he will head strongest Turkish Government since 1950's and thus will possess somewhat greater margin of flexibility. However, area of maneuver open to Demirel will remain small because he perforce will operate within familiar framework of Turkish national interests and also be ever sensitive to question of Turkey's prestige.

4. In contrast to greater political stability in Turkey, Stephanopoulos government's future seems doubtful. From our perspective, in view heightened Greek-Turkish tension which will probably intensify during UNGA debate, it seems probable that in immediate future no Greek Government will be able to consider new initiatives re Cyprus which would require any concession. Consequently, enosis-Greek territorial compensation formula appears shelved.

5. On Cyprus itself, Makarios' internal position apparently remains strong despite possibly weaker international position as reflected in August UNSC action and Soviet shift in direction of Turkey. Archbishop appears even less subject to Athens' influence than before, fact which Turks would now be willing to concede, and he remains determined to block any externally imposed solution.

6. Given political situation in three countries directly involved, and prospect of residual bitterness after UNGA vote, US initiative probably will be required to move Cyprus issue off dead center.

On basis Isik's conversations in Washington and Ambassador's discussions here with Isik and Bayulken, it is clear that Turks are still anxious to engage us in some type of joint planning, although they have no specific proposals in mind.

In order partially to meet Turkish desire without actually becoming involved in joint planning, they believe some merit in our exchanging views with GOT on informal basis. We might begin by reviewing with Turks various alternative proposals, including those which have been considered before, with objective of determining parameters of Turkish position. To create atmosphere of mutual confidence it would be advisable to hold talks in secrecy while making clear to Turks that no commitments on our part were involved during preliminary exchanges.

In this connection, we believe conversations with Turks should begin by explaining alternatives rather than on basis of US-drafted general outline of reasonable proposal (Nicosia's 172 to Dept), but we should be prepared put forward such an outline if talks evolve in fruitful direction. Talks should begin in Ankara on bilateral basis because it is highly unlikely that Turks would be willing to agree to Nicosia as focus of talks involving Archbishop, UK HICOM, Greek, Turkish and US Embassies. In addition to Turkish belief that Cyprus issue should be resolved primarily between Ankara and Athens, Turks would fear their interests would not be properly protected in Nicosia where they would be represented only by charge, who would be operating in Greek-Cypriot dominated environment, subject to influence by unreliable Turkish-Cypriot community, and out of direct control of Ankara.

Parallel with informal talks in Ankara, we might wish to consider similar noncommittal bilateral exchanges in Athens and Nicosia, informing all three governments that we were carrying on informal exploratory talks in other capitals but that US did not view its role as mediatory one. Instead, our task would be to try to determine whether there was any possibility of forward motion on Cyprus issue by talking independently to parties involved.

Depending on progress made in talks in Ankara (and possibly Athens and Nicosia), we could decide whether there was any prospect for direct negotiation between interested governments in light of prevailing circumstances. It might, for instance, be desirable to encourage resumption of Athens-Ankara dialogue building upon conversations which US had previously undertaken with two governments. At that point, it could also be decided how and when Makarios might be brought into picture. We are inclined to agree with Embassy Nicosia's view that Makarios should be brought into discussions in early stage so that he does not remain aloof only to sabotage ultimate solution. Turks would remain skittish about including Archbishop in any discussions but their final attitude would hinge upon prospects of satisfactory settlement, rather than upon principle involved, and they might be willing to include Makarios if apparent that weak Greek Government could not deliver. Throughout proposed preliminary discussions with Turks (and possibly with others), we would remain alert to desirability of injecting third party into discussions at appropriate time. This could be done by again calling for UN intervention. Despite Turks' unhappy experience with Galo Plaza, or possibly through Acheson type arrangement.

Comments requested.

Foregoing thoughts are put forward on tentative basis to elicit reaction of Department and other interested posts. During stopover in Athens as well as at The Hague, Ambassador plans to discuss some of these ideas with Ambassador Talbot. If Ambassador Belcher or Department have any preliminary reactions, their comments could be forwarded to The Hague./4/

Foregoing drafted prior to receipt of Deptel 342./5/

Hart

Ankara, November 3, 1965, 1635Z.

514. Deptel 362./2/ I saw SecGen Bayulken Nov 2 to inform him generally of my contact in Athens and in The Hague on Cyprus question and to tell him about Dept's instructions to Ankara and USUN regarding handling Cyprus item in UNGA./3/ Turkmen also participated in meeting.

Reporting on my conversation with Mr. Ball at The Hague, I said Under Secretary had reaffirmed US intention to support procedural resolution on Cyprus. Under Secretary had stated that, in his judgment, UN was not the place in which seek change in treaties. Treaties should be reviewed and renegotiated by parties involved; otherwise, agreed solution unlikely. Mr. Ball also had reiterated view that US is prepared to support any settlement of Cyprus problem which Turkey and Greece can negotiate bilaterally and get Makarios to accept. I explained that my stopover visit in Athens had given me opportunity to talk with Ambassador Talbot whose position was similar to mine in that both were in process of settling in and obtaining briefings from our respective staffs. While neither of us was therefore yet in position to speak with much local experience, we found it very useful to explore all aspects of Cyprus problem. In this connection, I emphasized that Embassy staffs in Athens and Ankara were of one mind in their desire to seek constructive solution to Cyprus question and that we did not have separate approaches to problem. (I did not go into any details of my Athens discussions.)

I then told Bayulken our UN Mission had been instructed to discuss with Turkish Del plans for handling Cyprus item in UNGA. Tactical matters re handling Cyprus question would have to be left to these New York delegations but I wanted FonOff to be aware of instructions sent out delegation. After I had drawn on relevant portions reftel, Bayulken expressed gratitude for being filled in on my talks in Athens and The Hague and for reaffirmation of strong U.S. support for Turkish approach. Line of joint action which U.S. envisaged at UN seemed well designed to avoid complications which might result from unsatisfactory resolution. In particular, Turks appreciated U.S. desire to work closely with Turkish Delegation in seeking passage of procedural resolution which, he hoped, would prepare the way for subsequent Greek-Turkish bilateral talks. He was grateful U.S. would work to prevent any reference to Galo Plaza report because inclusion such reference would be heralded as victory for Makarios.

In ensuing conversation, Bayulken and Turkmen made following specific requests for U.S. cooperation and support in our joint efforts to obtain satisfactory procedural resolution.

1. In addition to expressed U.S. willingness to work particularly with WE and LA Delegations to avoid endorsement Galo Plaza report, GOT hoped U.S. would exert similar efforts with other friendly countries.

2. U.S. might wish to take somewhat stronger line re Galo Plaza report than statement that we considered UN endorsement of report as "undesirable". For example, U.S. might emphasize that reference to report might lead to "serious complications" in terms ultimate settlement Cyprus question.

3. It would be helpful if U.S. could keep in close contact with U.K. Delegation because Turks somewhat worried about firmness of British position. GOT had received memorandum from British regarding UNGA handling of Cyprus issue which, although otherwise satisfactory, contained reference to Galo Plaza report--a reference which perhaps was included because of Galo Plaza's favorable comments re British bases. On the other hand, British had not mentioned Galo Plaza report in discussions of Cyprus in NATO Council. GOT hoped U.S. could persuade British to drop all reference to this report.

4. In his annual report,/4/ U Thant referred to Galo Plaza report as forming "reasonable basis" for settlement. Turks considered such statement prejudicial and felt SYG should have remained neutral. In addition, they had received reports U Thant had been in touch with Ghanaians re possible Ghanaian initiative and they were also concerned that U Thant was being adversely influenced on Cyprus issue by senior officials in Secretariat. Consequently, it would be helpful if U. S. could express its views on Galo Plaza report to SYG as well.

Bayulken said that when he was recently in New York with former FonMin Isik their appraisal of prospects for satisfactory Cyprus resolution was rather bright. However, one could never be certain about firmness of number of UN delegations because probably more than one-half of delegations had luxury of "playing" with their instructions. Turks believed compromise resolution would ultimately prevail in New York and would pave way for future Athens-Ankara talks but initially they needed to introduce their own substantive resolution for tactical reasons and because of Turkish public opinion.

GOT possessed no definite information regarding timing or substance of Cypriot substantive resolution. Presumption was that it would be similar to earlier Cairo resolution in calling for "unfettered independence" for Cyprus and, in addition, endorsement of Galo Plaza report. GOT could not accept any resolution which suggested that enosis was possible now or in future, that Turkish Cypriots had minority status, or that Galo Plaza report should form basis for Cyprus settlement. They had been informed that way was being paved for introduction by a non- aligned country of satisfactory procedural resolution but cooperation between our two delegations was most important. On basis information I had conveyed to him re instructions to our delegations in New York, he would ask Turkish PermRep Eralp to coordinate his activities and tactics closely with U.S. Del.

Bayulken went on to assure me that Cyprus section of PriMin Demirel's forthcoming policy statement had been drafted with great care and was quite moderate despite "vilification" campaign against Turkey in Greece. Turks did not wish disturb prospects of talks between two countries and, consequently, statement drafted for Demirel was balanced one which left way open for resumption Athens-Ankara dialogue. I replied that I was glad to hear this because attitude in Greece, as reflected in press, was that Turks were putting pressure on Greeks particularly in Istanbul. Bayulken commented that there was nothing new in Istanbul situation and that question of Greek citizens there was being handled routinely. He concluded by expressing opinion that Demirel government planned to pursue moderate policy toward Greece but its ability to do so would depend upon actions of Cyprus and Greece. Efforts of Greek Government to exploit religion for political purposes were not helpful in this regard.

Hart

Ankara, November 24, 1965, 1444Z.

598. USUN's 52; Deptel 429./2/ PriMin Demirel called me in November 24 to discuss Cyprus question in UNGA as well as MAP levels for Turkey (latter subject reported separately)./3/ Acting FonMin Sukan, Acting FonMin SYG Binkaya and Soylemez of Cyprus Bureau also present during Cyprus portion of discussion.

In response to my opening comment that PriMin looked well and seemed to have enjoyed election campaign, Demirel said he had enjoyed it indeed, so much so that he wished campaign were still going on. When I left, anteroom and outer hall were crowded with well-wishers who, I was told, had been coming to Demirel's office on daily basis to shake his hand and congratulate him on electoral success.

Demirel said he wanted to talk to me because Turkish Government very concerned over 24-nation resolution re Cyprus./4/ He regretted such resolution had been tabled but task now was to block it because resolution would endanger peaceful solution of Cyprus issue. PriMin said he hoped that USG would use its influence to block this resolution and that USG would help garner support for Afghan-Iraqi resolution./5/

I told PriMin I had read text of both resolutions and understood Afghan-Iraqi resolution had precedence. I also had observed obvious flaws in 24-nation resolution. As PriMin aware, U.S. was supporting GOT in seeking adoption of procedural resolution and I was certain that our two delegations in New York were in close touch in pursuit this objective. While I had no concrete suggestions, it seemed to me it might be possible to make certain adaptations in the Afghan-Iraqi resolution which would draw support from 24-nation proposal. However, tactics could best be handled in New York.

In response my inquiry as to whether he had received any report re support for Afghan-Iraqi resolution, Demirel replied in negative, adding he hoped to receive information soon. His main concern was that 24-nation resolution not pass because resolution was in violation UN Charter and existing agreements. I recalled we had previously informed GOT we did not consider UN appropriate place to change agreements between parties and reaffirmed that our respective delegations in New York would be in close contact. Demirel said he understood this was case but wished Turkish Government's views to be known directly through me as well as through Turkish UN delegation, and he was confident U.S. would not fail to assist Turkey in heading off 24-nation resolution. I replied that within framework of our common objectives, PriMin could be assured two delegations would be working together for procedural resolution.

Turning other aspects Cyprus problem, Demirel said GOT desired Famagusta settlement as soon as possible. In particular Turks wanted high school returned so that students [garble--could begin?] classes. He also referred to Javits visit,/6/ reaffirming that roofing and window material was needed for houses for 6,000 Turk Cypriot [garble] otherwise faced prospect of spending winter in tents, with consequent problems for Turkish public opinion./7/

Hart

On November 29, 1965, King Constantine wrote to President Johnson requesting immediate U.S. economic assistance to deal with the "grave state of the Greek economy." The King cited a serious deterioration of the economy in the "last months" and expressed concern that a continuation of economic troubles when linked to "repercussions of a psychological and more general nature" could lead to a full-scale crisis that would undermine the social stability of Greece. The King also noted the readiness of his government to undertake drastic financial stabilization measures, but argued they would not be sufficient without U.S. assistance. (Department of State, Central Files, POL 15-1 GREECE) In a December 19 reply, President Johnson stated that while U.S. interests in Greece were undiminished, U.S. capacity to provide financial assistance was limited. (Johnson Library, National Security File, Presidential Correspondence, Greece, King Constantine)

A-369

Athens, November 30, 1965.

SUBJECT
Andreas Papandreou's Comments on Current Greek Situation

On November 23, 1965, an Embassy officer and his wife attended a small dinner at the home of Mr. and Mrs. Richard Westebbe. The only other guests were Mr. and Mrs. Andreas Papandreou and Center Union Deputy Nikolaos Kountouris, an enthusiastic Papandreou supporter. Upon extending the invitation to the Embassy officer, Westebbe clearly implied that the evening had been specifically arranged to provide young Papandreou with an opportunity to explain and justify his position to an American official. Papandreou's comments during the course of the wide-ranging five-hour conversation were as follows:

Admittedly, Greece's present economic difficulties stem in some measure from mistakes made by the Center Union Government while it was in power. Chief among these are the tax reductions sponsored by former Finance Minister Konstantine Mitsotakis, which have cost the government some 1,200,000,000 drachmae in lost revenues. These tax reductions were instituted against the strong recommendations, in writing, of Andreas Papandreou. A second factor was the failure to obtain economic assistance through the Consortium. Particularly disappointing in this regard was the fact that the French, after offering a $25 million credit, imposed severe conditions and set exorbitant prices for locomotives, machinery, etc., which the Greeks wanted.

Despite these difficulties, Greece's economic problems would now be well on the way to solution had the Center Union Government remained in power. When the Center Union was replaced in mid-July, Andreas Papandreou was on the verge of consummating arrangements for the floating of a long-term, low-interest bond issue through commercial banks in West Germany, which probably could have put the Greek economy "over the hump" and on the road to healthy growth.

The present government is incapable of coping with the economic situation for a number of reasons. The individual ministers are not cooperating, and few of them are professionally competent; public confidence has been severely shaken as a result of political and economic instability and uncertainty; the problem of agricultural surpluses is being badly mismanaged; and strikes and disruptive labor unrest will probably have a serious effect.

In the latter connection, labor problems during the period of the Papandreou government were kept to a minimum because labor leaders realized the government understood and sympathized with their position, and it was possible for members of the government--particularly Andreas Papandreou himself--to persuade the trade unions to refrain from strikes. Andreas could do this because the union leaders trusted him, and he in turn fully understood their problems. There is no one in the present government who enjoys this kind of relationship with the trade union movement.

Because of the foregoing economic conditions, internal divisions, and lack of public confidence, the Stefanopoulos Government cannot long survive--certainly not for more than a few months. If elections were held today, the Center Union would get perhaps 60% of the popular vote, ERE no more than 30%, and the "traitors" (Stefanopoulos supporters) a bare 10%. The EDA vote would be negligible--maybe 5%--because the Center Union would win the support of all but a very small Communist hard core within EDA.

The overwhelming and durable political strength of the Center Union, as presently constituted and oriented, stems from four basic issues which preoccupy the electorate:

a. The need for social and economic reform.

b. The necessity to restore civil liberties and restrain the arbitrary and oppressive activities of the police.

c. Keen national "sensitivity" regarding certain infringements on Greek sovereignty.

d. A strong and mounting resentment against recent activities of the Palace.

Item c above--the "sensitivity" regarding sovereignty--is something the Americans should understand. It stems from the widespread feeling that through its participation in NATO, Greece has surrendered certain elements of national independence. Although it is recognized that NATO served a useful purpose initially, in more recent years Greece's membership in NATO has entailed some loss of autonomy in such matters as the selection and assignment of senior officers (concerning which subtle pressures have been applied by the U.S. and perhaps other major NATO powers); the organization, training and equipment of the Greek armed forces; and Greece's military deployments and commitments. While NATO in some form must be preserved, the pride and sensitivities of smaller powers must be taken more into account. Simply because Greece is not as powerful as some other NATO members does not mean that she is not as sensitive as they where matters of sovereignty are concerned. The Greek attitude is much the same as that currently being expressed by de Gaulle, whose position has wide appeal in Greece.

The question of the Palace is another extremely important factor. Public resentment again the King's recent "interference" in political affairs has now reached massive proportions. Andreas and other Center Union politicians have noted in their recent travels a significant change in this regard. Whereas prior to last July there was considerable anti-monarchist sentiment, it was usually expressed by the man in the street in such terms as: "When will King Constantine abdicate and go to Denmark?" Now the question is more likely to be: "When will Constantine be brought to trial for his crimes?" Until recently it had been the popular assumption that the young King's misdeeds were the result of the influence of his mother, but now it is becoming clear that he is acting on his own responsibility and should be held accountable accordingly.

The King should realize that his position can only be saved by the Center Union Party, without which the political situation would become increasingly polarized between right and left, with the left by far the stronger faction and heavily committed to the abolition of the monarchy. If a plebiscite were held today on the regime issue, the anti-monarchists would draw some 70 to 80% of the vote.

Any effort to frustrate the continuation of the "peaceful revolution" which the Center Union, under the elder Papandreou, was in the process of carrying out will have dangerous consequences. "Progressive and democratic" forces in the country are on the march in quest of a more modern and liberal order and will not long tolerate efforts to obstruct their progress. In addition to popular internal pressures, there is another reason why "undemocratic" regimes such as the present Stefanopoulos government cannot survive. This is the presence on Greece's northern frontiers of powerful neighbors who are "not indifferent" to developments in Greece. The United States should not assume that Greece exists in a vacuum, or that the U.S. can freely and unilaterally manipulate the Greek political situation without creating "reactions" in other quarters.

It is the firm view of the overwhelming majority of the Greek people that the U.S. is aligned with the extreme right, the Palace, and the military. This may not be entirely true, especially at the moment, but it is nevertheless a deeply held belief and there is evidence to support it. For example, it is assumed that articles last summer in the New York Times by C.L. Sulzberger, highly critical of Andreas Papandreou and his father, were a fair reflection of the U.S. view and were probably inspired by U.S. officials./2/

Reporting Officer's Comments: Throughout the evening Andreas, who dominated the conversation, was amiable, responsive to questions, and apparently intent on giving an impression of candor. He professed to welcome an opportunity for a frank exposition of his views which, he implied, had sometimes been misunderstood in American official circles. He said he knew he had been accused of having been a leftist and even a Marxist, but in fact he considered himself neither a rightist nor a leftist but a professional economist, now a politician, who tried to approach all political and economic problems analytically and objectively. His conversation was lucid and his points were well organized. In fact, he gave the impression that some of his remarks may have been planned or rehearsed in advance.

Throughout the evening Kountouris dutifully echoed Andreas' main points. Mrs. Papandreou was generally noncommittal. Westebbe tried to play the role of mediator, sometimes siding with Andreas and sometimes defending the American position.

For the Ambassador:
Alfred G. Vigderman
Counselor of Embassy for Political Affairs

Washington, December 1, 1965.

SUBJECT
Turkish-United States Relations; Vietnam

PARTICIPANTS
Mr. Ihsan Sabri Caglayangil, Turkish Foreign Minister
Mr. Haluk Bayulken, Director General, Foreign Office
Mr. Ilter Turkmen, Director, Policy Planning, Foreign Office
Ambassador Turgut Menemencioglu, Turkish Ambassador

The Secretary
The Under Secretary
Raymond A. Hare, Assistant Secretary for NEA
William B. Buffum, IO
George T. Churchill, Officer-in-Charge, Turkish Affairs

After an exchange of courtesies had established a cordial atmosphere, Caglayangil opened the discussion (Bayulken translating) with a statement of the new Government's emphasis on strengthening relations with the United States and the West. He mentioned that the Justice Party had received a substantial majority which would permit a stable government for the next four years. There has been a tendency in Turkey, made possible by increased freedom of the press, toward a more neutral foreign policy and toward leftism. The result of the recent elections indicates, however, that the great majority of Turkish people do not approve of tendencies that would take Turkey away from its traditional policies or, in the guise of social justice, move the country to the far left. The Justice Party won on the basis of a clear platform, and the people of Turkey have defined their leadership and the policies they want to have followed.

Caglayangil said that the democratic system has many opportunities but also has some inherent disadvantages. The Turkish Government, Caglayangil went on, has decided to make every effort to preserve and improve United States-Turkish relations. He is sure the United States will do its part to ensure that the relationship is not harmed by these (leftist) tendencies. If the relationship is not to be damaged, both countries must keep these tendencies in perspective.

The Secretary said he was encouraged that the Turkish people had made such a clear-cut decision, and that there was a good prospect for a political continuum. He said the new Government need have no doubt about our concern for Turkish stability and well-being. This was a stable concern, as it was based on our own self-interest and on our commitments, which we value and intend to honor.

Caglayangil said he would be grateful if something could be done to accelerate work on a new surplus agreement, as progress was now very slow. Mr. Churchill explained that a rather technical discussion was going on within the United States Government to determine what commodities might be delivered, and also on the question of export restrictions. Since the Turkish Government had indicated it wanted export restrictions eliminated or reduced in the new agreement, we were trying to determine what flexibility might be allowed under the legislation.

The Secretary said he would involve himself personally in this matter. He said he was seeing Secretary Freeman December 3./2/ The Secretary added that the surplus situation in the United States was changing. We don't have the same stockpile as before. Wheat has dropped, and rice is in short supply. We will continue to take into account the needs of other countries, but the changing supply situation will affect what we can do in the future with PL 480.

Caglayangil said he knows that the concerned authorities in the United States have the whole military assistance problem under review, but he wanted to stress Turkey's need for all-weather aircraft and Hawk missiles.

The Secretary responded that we planned to give substantial support for Turkey's military program. However, there are a couple of difficulties that arise, both attributable to Vietnam: (a) the problem of appropriations--our "bank balance" is overdrawn because of Vietnam; and (b) the question of types of equipment available. We are in a war in Vietnam and cannot be entirely sure where it will lead. This means we cannot clearly determine what our own equipment requirements will be, and thus what will be available for others. The Secretary said he did not mean this as a negative response, but only as an indication of the complications involved.

Caglayangil stressed the importance the new Government places on planned development and the achievement of a self-sustaining economy through self-help. He was sure the United States would do everything possible to help achieve these goals. The Secretary said we were encouraged by development results in Turkey so far. He urged that the Turkish Government extend its own diplomacy to the limit in talking to other Consortium members. He said we would, of course, continue to do our part, but our approaches to the UK, FRG, and others may carry less weight than the Turks' own efforts, since we are pressing these countries all the time on so many issues.

According to Caglayangil, Turkey participates in NATO in the sincere belief that this organization has been successful in achieving its primary missions in the past and will continue to be useful in the future. Developments within NATO should be participated in by all member countries. It is the Turkish Government position that a directoire should not be formed within NATO.

Caglayangil stated that the Turkish Government is interested in establishing good neighbor relations with the Soviet Union, accord