Greece

ATLANTIC

October 1949

on the World today

THE size and complexity of the Greek problem were grossly underestimated in the American program for aid to Greece. Even before the war, Greece was one of the poorest countries in Europe: the annual income, per capita, was $80. This poverty was critically intensified by the atrocious wartime devastation, and later by the wrecking tactics of t he Communist guerrillas. Few Americans realize how close the Communists came to winning control of Greece; as late as December, 1948, Greek resistance was in danger of collapsing.

During the past nine months, however, the military situation has taken a decisive turn for the better. The Greek Army’s major achievement has been the clearing of the Peloponnesus; fewer than a hundred guerrillas — the Greeks call them andartes, bandits — devoid of supplies, survive in this area, and repatriation of refugees is well under way. Only a few bands of andartes remain to be liquidated in central Greece, and for some time past there has been little activity in Thrace. The main Communist concentration — about 7000 fighting men — is near the junction of the Albanian and Jugoslav borders.

A force of about 5000 is based in the northern Grammos, along the Albanian border. Lesser units are spread out along the 237-mile Bulgarian border. The U.S. Military Mission estimates that the organized fighting strength of the guerrillas has declined to between 17,000 and 20,000, a sizable percentage of them women.

Certain factors are working against, the rebels. The Greek Army is now reasonably well equipped and increasingly well supplied, and American advice has brought about a conspicuous improvement in its tactics. Instead of garrisoning key towns and villages and waiting for the Communists to attack — a policy which left most of the countryside at the mercy of hit-and-run raids — the Army is now fighting a mobile war. A notable feature of recent actions has been the considerable number of guerrilla leaders killed or captured; previously, even when the andartes ran into heavy punishment, their commanders usually managed to escape.

The Communists’ method of warfare has by now earned them the fierce hatred of nine tenths of the population. Having failed to take over the country quickly, they set out to ruin it in the hope it would eventually succumb out of fear and exhaustion. They deliberately burned and looted villages. They carried off some 28,000 children to Albania, Bulgaria, and Jugoslavia. They went in for indiscriminate execution; and when voluntary enlistment dried up, they adopted a ruthless policy of forced recruitment.

Rebuilding Greece

At present, the cost of fighting the war and supporting some 684,000 refugees — nearly one tenth of the population — accounts for 50 per cent of the Greek budget, with the result that reconstruction has proceeded slowly because of lack of funds. Greece suffered its heaviest wartime damage in the field of transportation — roughly half of its roads and 70 per cent of its railway tracks were put out of commission — and it is here that the most conspicuous recovery has been achieved. Roads and bridges have been rebuilt with the help of the U.S. Army Corps of Engineers. The main railroad from Athens to Salonika will soon be reopened. The Corinth Canal was opened to shipping some time ago. The quays and wharves of the principal ports -Peiraeus, Salonika, and Volos — have been repaired. Ten airfields have been resurfaced and modernized and two new airfields have been built.

The U.S. program for Greek recovery has included a vigorous campaign against disease. Thanks to extensive use of DDT, malaria, which totaled a million cases in 1944, has been red need to ,50,000 cases annually. Immunization against tuberculosis, which takes a tremendous toll in Greece, is being carried out on a large scale.

With the aid of good seed, fertilizer, and equipment provided by UNRRA, agricultural production had almost returned to pre-war level by 1948, the principal exception being an unusually small olive crop. Industrial production, however, is still lagging; fuel supplies are low; and housing is desperately short.

One of Greece’s most urgent problems is the rebuilding of its export trade, a difficult task, since Greece has lost its principal pre-war customer, Germany. American efforts to stimulate Greek exports have met with effective coöperation from the Greeks, who are at their best on questions of trade. The total value of Greek exports rose from roughly 40 million dollars in 1946 to around 72 million in 1947 and 90 million in 1948.

The 1949 goal for the export trade is seriously threatened by overvaluation of the drachma, for which the official rate of exchange is 10,000 to the dollar as against 15,000 on the black market. Devaluation is a headline issue in Greece. Present policy is to wait and see whether there is to be a general realignment of European currencies vis-à-vis the dollar.

Tourists wanted

The Greek government has high hopes of earning considerable amounts of foreign exchange by the development of the tourist trade, which, without systematic exploitation, used to bring 40,000 visitors to Greece annually before the war. Greece has all of the primary tourist attractions: celebrated ruins, therapeutic mineral springs, a beautiful landscape and an abundance of sunshine, not to mention a singularly hospitable population.

What Greece lacks at present-and lacked even before the war — is proper accommodation for the tourist who likes to travel in comfort. The “luxury” hotel in Athens is not equal, in its standard of comfort, to any first-class hotel in Paris or Rome. Outside of Athens, accommodations range from poor to extremely primitive. The government is now building four up-to-date hotels on the island of Rhodes, a convenient holiday resort for the personnel of the U.S. oil companies in Arabia and for prosperous Middle Easterners.

High prices high taxes

Some of the toughest problems encountered by the Americans in Greece are bound up with Greek economic habits and Greek psychology. The Greek economy has always operated on the monopoly principle of small turnover and high profits. Greek merchants — in common with businessmen throughout the Near and Middle East — have always been more concerned with keeping up prices than with expanding sales, an attitude which has added to the inflationary pressures that beset the Greek economy.

Another problem that bedevils the U.S. Mission is the country’s tax system. No Greek government has been able colled an income tax effectively, since Greek businessmen — whether big or smallfirmly refuse to keep books. The government accordingly taxes wealth wherever it is visible. One of the many flaws in the system is that the speculator whose office is in his hat, or the shipowner who operates under the Panamanian flag and banks his profits in New York, does not pay taxes remotely proportionate to his wealth.

The circulation of the Greek economy is clogged by a fantastic conglomeration of indirect taxes, some of them imposed out of highly social-minded if misguided motives. When modern methods of transporting water were introduced to Greece, a tax was promptly imposed on the water system to provide for unemployed wafer carriers.

Eighteen separate taxes must be paid to export a ton of cement from Volos to Turkey, among them a contribution to the fund for consumptive seamen. One of the principal objectives of the economic experts of the ECA Mission is to get the Greek tax system partially straightened out in 1950.

The government reforms

American influence has had a distinctly liberalizing effect on the Greek government. Since the all-Populist cabinet was replaced by a coalition two years ago the Greek government has not, on the whole, been a repressive one, considering that it is at war against an enemy who has been vitally assisted by a sizable and extremely active fifth column. Of the Communist supporters arrested, some 21,000 young men have been sent to the island of Makronissos, where they live in decent barracks and have fine playgrounds, a theater, and a lecture hall.

This remarkable experiment in reeducation has proved highly successful. Almost 8000 of those sent to Makronissos are now voluntarily lighting in the Greek Army, and several Makronissos units have been cited for distinguished service. About 4000 have returned to civil life, and 5400 more will soon be released.

There are no curbs on press criticism of the government in Greece; in fact, some papers attack the government and individual ministers with a Vehemence which does not stop at slander. Athenians feel no need to lower their voices when they says as a good many do, that after liquidating the Communists the Army would do well to liquidate the politicians.

New parts for an old machine

The Greek political world is by way of being a rather exclusive club. The principal weakness of the government is not so much corruption as inefficiency, which stems from two main causes: (1) the Hull system tends to keep the oldest members in office and to exclude new blood; (2) the administrative machine is tremendously overcentralized — a janitor cannot be hired for a government building in loannina without the consent of the appropriate ministry in Athens.

The prerequisite to revitalization of Greek politics is decentralization: under the present administrative setup the well-organized Populist Party machine has a strangle hold on the country’s political life. American influence has helped to bring about a modest change in the right direction. Greece’s forty-seven nomarchs—the nomarch is the chief local administrator of a provincial district —are now selected on a merit basis by a nonpartisan board and are paid a salary which makes them financially self-sufficient.

The over-all economic position of Greece is still extremely precarious, but American aid and advice have achieved worth-while results in a variety of fields. The major concrete achievement, of course, is that Greece has been saved from Communist domination. This, in turn, has influenced the elections in Italy; has stiffened anti-Communist morale throughout Western Europe; and has safeguarded the strategic position of the Western powers in the Mediterranean and Middle East.