Greece 1949 - 1963
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The Marshall Plan in Greece

In 1949, the Greek Ministry of Welfare listed 1,617,132 persons as indigent; destitute, despondent, and directionless, they looked to Athens for assistance. Another 80,000 to 100,000 had fled their homeland voluntarily or been resettled forcibly in various parts of the communist world; the largest such settlement was at Tashkent in Soviet Central Asia. The German occupation and the Civil War had left the countryside devastated, the economic infrastructure largely rubble, and the government broke. The most pressing need, then, was the material reconstruction of the country, which required continuation of the large-scale United States aid commitment. In the early days of the Cold War, the West gave priority to reinvigorating Greece because of its strategic location. In a bipolar world, Greece's international orientation was preordained.

As part of the European Recovery Program (commonly called the Marshall Plan), an American Mission of Aid to Greece (AMAG) was established to assist and oversee the nation's economic recovery. Millions of United States dollars poured into Greece. As part of the agreement between Greece and the United States, members of the AMAG were given wide-ranging supervisory powers that quickly led to the formation of parallel administrations--one Greek and one American. Greece had become, for all intents and purposes, a client to the United States.

Initially the bulk of foreign aid went into military expenditures; thus, while other parts of Europe were rebuilding their civilian industrial infrastructures, Greece was forging a military apparatus whose sole function was to contain communist expansion. With the cessation of the Civil War in 1949, the focus of aid spending shifted to civilian priorities. The national currency, the drachma (for the value of the drachma--see Glossary), required stabilization because bouts of hyperinflation during the war years had rendered it valueless. Faith had be restored in the monetary system. Exports had to be revived. And, of course, the core of Greek agriculture and industry required rebuilding. Greece (especially Athens) came to resemble a giant work site with building construction everywhere; new roads were built and old ones refurbished; and hydroelectric stations were built to power new industry. In 1953 the drachma was devalued in order to make Greek products more competitive. Other measures were taken as well to attract foreign capital to Greece. These policies ushered in a new phase of growth in the early 1950s. However, massive dependence on foreign aid came at the price of foreign dependence in international relations.

Civilian Politics Resume

In February 1950, martial law was lifted in preparation for the first general election since 1946. The social upheavals of wartime enfranchised parts of society previously excluded from political participation; women, emancipated in some ways under the PEEA, were to receive the right to vote in 1951. In the election of 1950, no fewer than forty-four parties, most of them centered on individual politicians rather than political principles, contested the 250 seats in parliament. Tsaldaris and the Populists won a plurality of only sixty-two, giving the balance of power to a group of centerright parties: the Liberals, led by Sophocles Venizelos, the son of the former prime minister, the National Progressive Center Union under General Plastiras, and the Georgios Papandreou Party. These three parties agreed to form a coalition government with Plastiras at the helm.

In the election of 1951, called because no stable coalition emerged from the 1950 election, two new organizations appeared. The royalist Greek Rally Party, under Field Marshal Alexandros Papagos, commander of the national army when it defeated the DAG, included a broad spectrum of Greek society and was modeled on the French Rally Party of Charles de Gaulle. The popularity of Papagos, who had reinstated the autonomy of the Greek military during his tenure as its commander, enabled Greek Rally to eclipse the Populists by garnering 114 seats to the Populists' two. The United Democratic Party, a front for the banned KKE, won ten seats although many of its candidates were in prison. Based on their combined 131 seats, the Liberals and the Center Union formed another shaky centrist ruling coalition. At this point, Greece felt the sharp edge of dependency on the United States. Threatening to withdraw aid, the United States ambassador urged that the electoral system be changed from proportional to simple majority representation, a move that would favor Papagos's conservative Greek Rally Party. Politicians reluctantly made the change. The election of 1952 gave Greek Rally 247 of 300 seats in parliament, beginning a decade of dominance by the right. This episode also set a pattern of political parties altering voting laws while in office to ensure future electoral success.

The Papagos administration took advantage of its parliamentary majority to unite conservatives and begin to improve Greece's economic situation. Devaluation of the drachma spurred exports and attracted additional capital from the West. Papagos also improved Greece's international security by joining the North Atlantic Treaty Organization (NATO) in 1952 and by entering the Balkan Pact with Turkey and Yugoslavia in 1953. The latter agreement soon dissolved, however, when Yugoslavia's relations with the Soviet Union improved. Stimulated by Greece's new status as a NATO ally of Turkey, Papagos began negotiations with Britain and Turkey over the status of Cyprus, a British crown colony and the home of the largest remaining Greek population in territory adjacent to Greece. When those talks failed in 1955 amid anti-Greek riots in Istanbul and political violence stirred by the Greek-Cypriot National Organization of Cypriot Fighters (Ethniki Organosis Kyprion Agoniston--EOKA), relations between Greece and Turkey entered three decades of hostility.

The Rise of Karamanlis

Papagos died in office in 1955. During his tenure, an obscure politician, Konstantinos Karamanlis, had risen quickly in the Greek Rally Party. In the Papagos government of 1952-55, Karamanlis was a very effective, although autocratic, minister of public works. When Papagos died, King Paul surprised observers by choosing Karamanlis to form a new government. The forty-eight- year-old Macedonian reorganized the Greek Rally Party as the National Radical Union (Ethniki Rizopastiki Enosis--ERE) and proceeded to hold power until 1963.

During the Karamanlis years, the economy continued to grow by most statistical indicators, although it remained under state control and did not develop in new directions. Growth was especially fast in construction, shipping, and tourism. The state bureaucracy, the largest employer except for agriculture, became bloated, inefficient, and politically entrenched in this period. The service sector was the fastest growing element in the Greek economy. Overall, the standard of living of the majority of Greeks improved markedly in the 1950s in comparison with the sufferings of the previous years. Between 1951 and 1964, average per capita income quadrupled, and prices remained stable.

In the same period, Greeks flocked to cities in numbers unseen since 1900. Athens was the favorite destination of rural citizens seeking to improve their economic position. When the high expectations of Greece's shifting population were not realized, however, the postwar consensus that had supported the right began to crumble.

In foreign relations, the two dominant issues of the immediate postwar era, the Cold War and Cyprus, remained critical for Greece. Karamanlis was firmly convinced that Greece's fortunes lay with the West and that Greece must become "European." Karamanlis wanted to move closer to Europe than membership in NATO alone, so in 1962 he won associate status for Greece in the European Community (EC) with the promise of full membership in 1984. He also established close personal contacts in Washington, receiving an official visit from the United States president, Dwight D. Eisenhower, in 1959. No other United States president visited Greece until 1990.

The other overriding issue of the day was Cyprus. The postwar climate of British decolonization had led to expectations that Cyprus, whose population was 80 percent Greek, might become free to join with Greece. There were two obstacles: Cyprus's strategic importance to Britain and the Turkish population on the island. For Britain, Cyprus had a special role in protecting British oil supply lines from the Middle East. In 1954 Britain's foreign secretary, Anthony Eden, had stated simply that, because of that factor, Britain would never relinquish Cyprus. The sizeable Turkish population on the island meant that Turkey also had a stake in the future disposition of the island, if Britain were to agree to any change in its status.

In 1955 the EOKA campaign of violence and terrorism aimed at disrupting British rule and uniting Cypriot Greeks with Greece. After years of conflict and delicate negotiations, the interested parties finally reached a settlement in 1959. The island would be independent and ruled by a joint Greek and Turkish government formulated roughly according to the size of each population. The president would be Greek, the vice president Turkish. Greeks were awarded 70 percent of seats in parliament, with the Turkish minority holding veto power; 60 percent of the army was to be Greek. Britain retained one airfield and one army base, and Greece and Turkey were able to station military advisers on the island. The three nations jointly guaranteed the security of the island, and each had the right to intervene to defend it. The establishment of even temporary peace on Cyprus was a major accomplishment, but this solution was not popular in Greece.

Electoral Shifts to the Left, 1958-63

Karamanlis's role in compromise talks with Turkey began a process of weakening in the ERE's electoral support that continued into the early 1960s. At the same time, elder statesman Georgios Papandreou's coalition profited from public disaffection with Karamanlis to revive the center-left after decades of suppression.

The first sign of deterioration in the conservative party's position came in the 1958 parliamentary election. The ERE lost seats as the United Democratic Left (Eniea Dimokratiki Aristera-- EDA), ally of the outlawed communist party, gained the secondhighest vote total. Seeking validation of his pro-Europe policies and the Cyprus treaty, Karamanlis asked for new elections in 1961. His ERE party recovered somewhat from the 1958 result by obtaining 51 percent of the vote and 176 seats in parliament. Former Prime Minister Georgios Papandreou and his Center Union, (Enosis KentrouEK ), in association with some smaller centrist parties, finished second with 34 percent of the vote and won 100 seats. The EDA finished third with 15 percent and 24 seats.

The 1961 election was marred by widespread allegations of tampering and corruption. Army and police units, alarmed by the high procommunist turnout in 1958, openly intimidated voters, especially in areas known for their left-wing sympathies. Although Karamanlis likely played no role in the voting irregularities, Papandreou found an issue to rally the people: he charged electoral fraud and demanded that the elections be declared void. When they were not, he committed himself to a "relentless struggle" to ensure free and fair elections in Greece.

Many people had grown weary of the stifling of the left, which had continued since the end of the war. Many leftists were still in prison, internal security forces continued to wield great influence, and advancement in the civil service and the military remained dependent on political affiliation. In short, people were tired of the suppression of personal freedoms. In the early 1960s, political violence increased, as exemplified by the 1963 assassination of EDA deputy Grigorios Lambrakis by thugs connected to the security forces (an event dramatized in Costa Gavras's film Z).

Karamanlis felt his support deteriorating both to the left and to the right.

He clashed with King Paul and Queen Frederika on a number of issues, especially the relationship between the monarch and the military. Karamanlis also became convinced that the power of the military was inappropriate for a democratic state. Once more the constitutional question regarding the role of the monarchy was rising to the surface of Greek political life, and, as in the past, it inevitably involved the armed forces as well. Finally, in early 1963 Karamanlis yielded and tendered his resignation. Upon its acceptance, he went into self-imposed exile in Paris.


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