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SECRET 2 - technical assistance in return for Albanian concession of the right of mutual exploitation. The monetary systems of the two countries will be united by replacing the Albanian franc with the Yugoslav dinar. A customs union will be established, the customs system and tariffs of Yugoslavia being commonly adopted. The implementa- tion of this treaty would complete the annexation of Albania in every respect save a formal act of accession to the Yugoslav federation. This last formality may be postponed, however, until it is apparent that no international advantage can be derived from Albania's nominal independence. The second significant development is the Bulgarian Cabinet's recommendation to the Grand National Assembly that Pirin (Bulgarian Macedonia) be united with Yugoslav Macedonia, already a separate state in the Yugoslav federal system. Such a proposal carries implications regarding an eventual adherence of Bulgaria proper to a Balkan federation, since a gratuitous cession of national territory would be incompatible with any other concept. The project has been vigorously denounced by the Bulgarian opposition parties; no action has yet been taken on it. At this stage it may well be no more than a trial balloon to test Bulgarian sentiment on federation. Its timing, however, may be significant in rolation to the prospective withdrawal of Soviet occupation forces, when a Balkan federal union might be necessary to ensure the perpetuation of the regime. A union of Yugoslav and Bulgarian Macedonia would inevitably raise the question of the incorporation of Greek Macedonia in the composite federal state. That objective could be accomplished only in consequence of Greek adherence to an all-inclusive Balkan federation or by forcible dismemberment of that country. In either case Greek Thrace would be isolated and would presumably fall to Bulgaria in realization of a long=standing aspiration and in compensation for the loss of Pirin. The cession of Pirin to Yugoslav Macedonia would therefore be an incitement to further disturbances in Greece directed toward either the secession of Macedonia or subversion of the country as a whole. Hoyts Understay HOYT 6. VANDENBERG Lieutenant General, USA SECRED

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    "ocrText": "SECRET\n2 -\ntechnical assistance in return for Albanian concession of the right\nof mutual exploitation. The monetary systems of the two countries\nwill be united by replacing the Albanian franc with the Yugoslav\ndinar. A customs union will be established, the customs system\nand tariffs of Yugoslavia being commonly adopted. The implementa-\ntion of this treaty would complete the annexation of Albania in\nevery respect save a formal act of accession to the Yugoslav\nfederation. This last formality may be postponed, however, until\nit is apparent that no international advantage can be derived from\nAlbania's nominal independence.\nThe second significant development is the Bulgarian Cabinet's\nrecommendation to the Grand National Assembly that Pirin (Bulgarian\nMacedonia) be united with Yugoslav Macedonia, already a separate\nstate in the Yugoslav federal system. Such a proposal carries\nimplications regarding an eventual adherence of Bulgaria proper to a\nBalkan federation, since a gratuitous cession of national territory\nwould be incompatible with any other concept. The project has been\nvigorously denounced by the Bulgarian opposition parties; no action\nhas yet been taken on it. At this stage it may well be no more than\na trial balloon to test Bulgarian sentiment on federation. Its\ntiming, however, may be significant in rolation to the prospective\nwithdrawal of Soviet occupation forces, when a Balkan federal union\nmight be necessary to ensure the perpetuation of the regime.\nA union of Yugoslav and Bulgarian Macedonia would inevitably\nraise the question of the incorporation of Greek Macedonia in\nthe composite federal state. That objective could be accomplished\nonly in consequence of Greek adherence to an all-inclusive Balkan\nfederation or by forcible dismemberment of that country. In either\ncase Greek Thrace would be isolated and would presumably fall to\nBulgaria in realization of a long=standing aspiration and in\ncompensation for the loss of Pirin. The cession of Pirin to\nYugoslav Macedonia would therefore be an incitement to further\ndisturbances in Greece directed toward either the secession of\nMacedonia or subversion of the country as a whole.\nHoyts Understay\nHOYT 6. VANDENBERG\nLieutenant General, USA\nSECRED"
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