International: Breaking the Circle

Congress was increasingly critical of foreign loans made without advance assurances; the politico-economic situation in Greece was rapidly getting worse. Caught as usual between criticism and circumstances, the State Department last week announced that the Export-Import Bank had lent Greece $25 million. At the same time, the State Department told the Greek Government to pull up its socks; the loan would do no good if Greece did not take vigorous steps to revive industry, cut expenses and control inflation.

Asked how he would justify the loan to Congress, Acting Secretary of State Dean Acheson patiently explained about the cart and the horse: Greece could not stabilize unless she got the money, and reform without stability was impossible. The U.S. hope: with the Greek economy improved, elections could be successfully held, which in turn should ease the tense Greek political situation and contribute to recovery.