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DECLASSIFIED SECRET E. O. 11652, Sec. 3(E) and 5(D) or (E) 7.15.25 Dept. of State letter, Aug. 9, 1973 Financial By NLT- NARS Date 12.2.75 CHART 10. As Yugoslavia's economic situation be- came more critical as the result of the Policy Cominform trade embargo, we extended financial aid through the Export-Import Bank to "keep The fundamental objective of US policy Tito afloat." We have also urged certain toward Yugoslavia is the re-emergence of Yugo- other western nations to make credits avail- slavia as a democratic independent member of able to Tito. In addition we have concurred the world community. The Cominform break, in the granting of loans and drawings by the while not altering our long range objectives, International Monetary Fund and the Inter- occasioned a shift in our immediate policy national Bank. The authorization through ECA toward the Tito government. After an initial of increased dollar purchases in Yugoslavia period of "watchful waiting" during which the by Marshall Plan countries will be a further breach between Tito and the Cominform con- source of dollars to Tito. tinued to widen, we began to utilize the Tito nationalist heresy in order to weaken Kremlin Other Actions control of Eastern Europe and of world communism. To accomplish this, our immediate We have constently worked for a modifi- policy is to provide sufficient limited cation of Yugoslav policy toward Greece and economic assistance to Tito to aid him in with that objective in mind have supported continuing his resistance to the Cominform. the Balkan Committee's recommendations in the At the same time our present support does not imply approval of his domestic policies or any General Assembly. We also supported Yugo- slavia in her successful bid for a seat on the change in our ultimate objective. Security Council although the Soviet bloc ob- jected strenuously. Export Controls Under Consideration In February, we exempted Yugoslavia from the strict export controls applicable to goods destined for the Soviet bloc. Under the same We are continuing to explore actively all NSC directive, 1A items were made available to possible ways of easing the Yugoslav economic position. Yugoslavia after interdepartmental approval and when serving our national interest. Pur- suant to this policy we have authorized ex- 1. We are urging special consideration of this port licences for some oil rigs, a steel bloom- problem by western European governments. ing mill, and certain mining machinery. Recently this list has been extended to include 2. We are exploring the possibility of defer- the export of civil aircraft when necessary for ring Yugoslav payments to western Germany. reasonable development of civil air communica- tions. In addition we have withdrawn objections 3. We are considering extending technical to short term bilateral air-traffic agreements assistance for economic development. between Yugoslavia and western European states. NSC/3 approves in principle the replenishing 4. Finally, under the principle approved in of Yugoslav military supplies in the event of NSC 18/3, we will consider requests for the attack or guerilla activities. replenishing of Yugoslav military supplies in the light of current developments. TOP SECRET

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    "ocrText": "DECLASSIFIED\nSECRET\nE. O. 11652, Sec. 3(E) and 5(D) or (E)\n7.15.25\nDept. of State letter, Aug. 9, 1973\nFinancial\nBy NLT-\nNARS Date 12.2.75\nCHART 10.\nAs Yugoslavia's economic situation be-\ncame more critical as the result of the\nPolicy\nCominform trade embargo, we extended financial\naid through the Export-Import Bank to \"keep\nThe fundamental objective of US policy\nTito afloat.\" We have also urged certain\ntoward Yugoslavia is the re-emergence of Yugo-\nother western nations to make credits avail-\nslavia as a democratic independent member of\nable to Tito. In addition we have concurred\nthe world community. The Cominform break,\nin the granting of loans and drawings by the\nwhile not altering our long range objectives,\nInternational Monetary Fund and the Inter-\noccasioned a shift in our immediate policy\nnational Bank. The authorization through ECA\ntoward the Tito government. After an initial\nof increased dollar purchases in Yugoslavia\nperiod of \"watchful waiting\" during which the\nby Marshall Plan countries will be a further\nbreach between Tito and the Cominform con-\nsource of dollars to Tito.\ntinued to widen, we began to utilize the Tito\nnationalist heresy in order to weaken Kremlin\nOther Actions\ncontrol of Eastern Europe and of world\ncommunism. To accomplish this, our immediate\nWe have constently worked for a modifi-\npolicy is to provide sufficient limited\ncation of Yugoslav policy toward Greece and\neconomic assistance to Tito to aid him in\nwith that objective in mind have supported\ncontinuing his resistance to the Cominform.\nthe Balkan Committee's recommendations in the\nAt the same time our present support does not\nimply approval of his domestic policies or any\nGeneral Assembly. We also supported Yugo-\nslavia in her successful bid for a seat on the\nchange in our ultimate objective.\nSecurity Council although the Soviet bloc ob-\njected strenuously.\nExport Controls\nUnder Consideration\nIn February, we exempted Yugoslavia from\nthe strict export controls applicable to goods\ndestined for the Soviet bloc. Under the same\nWe are continuing to explore actively all\nNSC directive, 1A items were made available to\npossible ways of easing the Yugoslav economic\nposition.\nYugoslavia after interdepartmental approval\nand when serving our national interest. Pur-\nsuant to this policy we have authorized ex-\n1. We are urging special consideration of this\nport licences for some oil rigs, a steel bloom-\nproblem by western European governments.\ning mill, and certain mining machinery.\nRecently this list has been extended to include\n2. We are exploring the possibility of defer-\nthe export of civil aircraft when necessary for\nring Yugoslav payments to western Germany.\nreasonable development of civil air communica-\ntions. In addition we have withdrawn objections\n3. We are considering extending technical\nto short term bilateral air-traffic agreements\nassistance for economic development.\nbetween Yugoslavia and western European states.\nNSC/3 approves in principle the replenishing\n4. Finally, under the principle approved in\nof Yugoslav military supplies in the event of\nNSC 18/3, we will consider requests for the\nattack or guerilla activities.\nreplenishing of Yugoslav military supplies\nin the light of current developments.\nTOP SECRET"
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