881.00R/9–2750: Telegram
The Acting Secretary of State to the Embassy in Greece
994. Amb Politis called with Gouras1 Sept 22 re ECA cut. Politis said while felt personally that cut had no specific reflection on present Govt, announcement so soon after formation new Govt wld seem imply US disapproval. Any case this impression widespread Athens. Dept pointed out announcement had come from Grk sources but had it come from US spokesman wld have been put in proper context and non-polit nature confirmed. Politis stated in view fact present Govt first one of “stability” since elections, unfortunate must bear brunt of cut and concomitant destabilizing effects. He inquired if possible to [Page 418] stay cut giving present Govt chance undertake required action and reforms which if not satis by later date cut wld then be made. Politic was told that in Dept’s view unlikely ECA wld temporarily restore cut and state that restoration done for polit reasons. Econ considerations in decision were stressed. Grk reps then inquired if amt cut cld be put in reserve to be restored contingent upon adequate progress by set date. Said he felt sure this wld be strong inducement for Govt to take necessary measures. Although suggestion stated as personal believe it emanated Grk Govt Athens. Dept agreed take reserve fund idea under consideration and discuss with ECA.
Assume similar approach has been made Athens. Before giving serious consideration to proposal would like Embassy’s opinion. Specifically would appreciate views as to polit advisability fol this course and whether this would stimulate govt to accomplish more effectively objectives set forth in proposed Porter-Minor statement. ECA states Bissell2 will discuss this subj with Porter at Mission Chiefs meeting as well as general subject of timing of announcement of annual aid estimates.