RENEGOTIATION OF THE GREEK BASE AGREEMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89M00699R002201810006-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 27, 2016
• Document Release Date: March 28, 2012
• Sequence Number: 6
• Publication Date: November 1, 1987
• Content Type: SNIE

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Director of
Seer-
Central
Intelligence
Greek Base Agreement
Renegotiation of the
Special National Intelligence Estimate
SNIE 29.1-87
November 1987
Copy 2 7 5
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the. Defense Intelligence Agency, the National Security
Agency, and the intelligence organization of the Department of ,State.
Also Participating:
The Deputy Chief of Staff for Intelligence, Department of the Army
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SNIE 29.1-87
RENEGOTIATION OF THE
GREEK BASE AGREEMENT
Information available as of 19 November 1987 was
used in the preparation of this Estimate, which was
approved by the National Foreign Intelligence
Board on that date.
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CONTENTS
Page
KEY JUDGMENTS .............................................................................. 1
DISCUSSION ........................................................................................ 3
Why Renegotiate Now? ....................................................................... 3
The Strategic Importance of US Bases in Greece .............................. 3
Which Facilities Are Covered? ........................................................... 3
The Negotiating Environment ............................................................. 5
Greek Domestic Affairs .................................................................... 5
International Factors ........................................................................ 7
Greek'Goals in the Negotiations .......................................................... 11
How Will the Greeks Approach the Negotiations? ............................ 12
ANNEX A: Chronology of Greek Bases .............................................. 17
ANNEX B: Referendums Past and Future ......................................... 19
ANNEX D: A Summary of Current Basing Agreements .................. 27
ANNEX E: Party Representation in the Greek Parliament .............. 29
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KEY JUDGMENTS
Athens will agree ultimately to a new base agreement allowing the
United States to retain facilities in Greece. Three factors all but compel
the Greeks to do so: security against the perceived Turkish threat, the
need for US military assistance, and the significant economic benefits
derived from the US presence.
Greek attitudes in the negotiations will be driven by fears of
Turkey and domestic political considerations. Papandreou will have to
balance the need for a continued US presence-as a deterrent to
possible Turkish aggression-with considerable domestic opposition,
particularly on the Greek left, to the US military presence. He must also
satisfy critics on the right, who will demand that he drive a hard
bargain.
The domestic environment has changed since the 1983 negotia-
tions. Although Papandreou is again the key player, he will be weaker.
His party is sliding in the polls
The principal variables, however, are the promised national referen-
dum on US bases and the prospect of national elections, which must be
held by June 1989. We are not likely to know the timing and sequence
of these two events for some time; Papandreou will make those
decisions in the light of domestic politics and progress of the negotia-
tions.
A perceived threat from Turkey will be Greece's paramount
external concern in the negotiations:
- In Greek eyes, the US presence provides a deterrent against
Turkish attack and a means of preventing a further US tilt
toward Turkey politically and militarily.
- Greece will seek assurances against the perceived Turkish
threat
Greece needs the United States-not only for the vital security
relationship, but also for the economic advantages accrued through
security assistance, investment, and tourism. Whatever his personal
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reservations, Papandreou appears convinced of the importance of the
US presence. His only real bargaining chip is his ability to threaten
closure of the US bases:
- The Greeks will almost certainly not demand the closure of all
US bases, but they may push for a symbolic closure of Helleni-
kon, since its proximity to Athens makes it highly visible.
- There is no indication that Greece will demand "dual flagging"
or conversion of the bases to NATO command.
- Unforeseeable events-such as Papandreou's death or a new
crisis in the Aegean or Cyprus-would fundamentally alter the
negotiating environment in ways impossible to predict.
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DISCUSSION
Why Renegotiate Now?
1. The 1983 Agreement on Defense and Economic
Cooperation (DECA) between Greece and the United
States will expire on 31 December 1988. Article XII of
the Greek text of the DECA states that the agreement
terminates after that date (the US text uses the word
terminable). The agreement requires notification of
termination within five months of expiration and
allows the United States 17 months to vacate the
facilities. The Greek Government has already infor-
mally signaled the United States of its intention to
terminate and negotiate a new agreement, instead of
extending the current agreement. Formal notice of
termination could be given in July 1988. Unless other-
wise agreed, the bases would have to be completely
withdrawn within 17 months of termination, that is,
by 31 May 1990 if a new agreement has not been
reconnaissance of the Soviet fleet in the Medi
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reached.
The Strategic Importance of US Bases in Greece
2. The United States has a continuing interest in
maintaining military facilities in Greece. The first
bilateral defense agreement was signed in 1953, when
Greece entered NATO, and there has been a US
military presence ever since. Geography makes Greece
the ideal location for Air Force
cargo and passenger links to the eastern Mediterra-
nean, Middle East, and Southwest Asia and for naval
operations in the eastern Mediterra-
nean and Aegean, backstopping defense of the Turkish
Straits. Soudha Bay in Crete affords a sheltered,
deepwater harbor large enough to meet Sixth Fleet
needs, central to the eastern Mediterranean and re-
moved from civilian activities.
3. Greek basing of US forces and activities contrib-
utes to the security of NATO's southern flank. It
provides NATO regional connec-
tivity within the Allied Forces Southern Europe
(AFSOUTH) area of responsibility
defense of NATO lines ot communica-
tion in the Aegean and eastern Mediterranean, and a
visible reflection of NATO's commitment to the re-
gion. US air and naval stations
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Which Facilities Are Covered?
4. There are four major facilities in Greece that are
covered by the DECA. These facilities serve primarily
US defens __]needs:
- Hellenikon Airbase, located adjacent to the inter-
national airport in Athens, supports a variety of
US and NATO operational, logistic administra-
tive, require- 25X1
ments in Greece and the Middle East. The US
Air Force's Military Airlift Command (MAC)
supports US forces in Greece through Hellenikon 9 )( I
provid- 25X1
ing en route support to strategic airlift operations
during regional contingencies. Wartime contin-
gency plans call for stationing of NATO rapid
reaction aircraft at the airbase.
- Naval Support Activity, Soudha Bay, Crete,
provides storage facilities for US petroleum, oil
and lubricants (POL), and for US munitions. The
United Kingdom and Greece also use this facili-
ty. The airfield supports extended maritime pa-
trol operations in the eastern Mediterranean and
serves as the primary divert field in the eastern
Mediterranean for carrier-based tactical aircraft.
- Iraklion Air Station, Crete,
on the threat of hostilities in the Middle East. It
also provides advisory support for US reconnais-
sance missions conducted in the region.
Naval Communications Station, Nea Makri,
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north of Athens, provides command and control, 25X1
operations, logistic, and administra- 25X1 ''I
tive communications support to US naval forces
and commanders afloat in the Mediterranean,
Black, and Ionian Seas and the Persian Gulf. It
also provides weather and safety broadcasts for
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Figure 1
The Strategic Importance of Greece
Rom:
Yugoslavia
evastopol,
Sea I Soudha` Bay
lydkliop
Soviet rri~~sv~
Mediterranean
Squadr?n
2. Proximity to
Middle East
Syrii
*Damascus
Caspian'\
Sea
Baghdid*
Iraq
Boundary representation is
not necessarily authoritative.
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5. US use of military facilities in Greece has gener-
ally been justified as furthering NATO objectives.
However, the United States several times has request-
ed use for out-of-area purposes. Greece granted per-
mission to use the facilities to resupply Israel in 1967
but turned down a request for similar use in 1973.
Recently, Greece has expressed concern about the use
of Soudha Bay for refueling US and West European
warships on the way to the Gulf.
The Negotiating Environment
Greek Domestic Affairs
6. There have been three sets of bilateral defense
negotiations with Greece since the fall of the junta in
1974. This will be the second round with the Pan-
Hellenic Socialist Movement (PASOK) government of
Andreas Papandreou. Though still considerable, the
level of anti-Americanism in Greece, which was en-
gendered by a perception of US support for the junta,
is no longer the dominant public issue that it was; and
Papandreou has softened his campaign promise to
eliminate the bases from Greek soil. Thus the negotiat-
ing atmosphere is different from that in 1983; in
particular, Papandreou has been weakened by a series
of scandals and by the unpopularity of his economic
austerity program.
7. The Papandreou government retains a parlia-
mentary majority, albeit somewhat smaller than at the
time of the 1983 negotiations. In the 1981 and 1985
elections, PASOK achieved its majority with the coop-
eration of the Communist Party (KKE) and indepen-
dent leftists. It will almost certainly seek similar
support in the next election. Papandreou is compelled
by electoral imperatives to maintain his leftwing
support. Although Greek confidence in political par-
ties has declined and though Papandreou's popularity
is beginning to slip, a recent poll showed that Papan-
dreou remains the most popular politician in Greece.
8. Impending Elections. The most important ele-
ment of the Greek negotiating environment may well
be the prospect of national elections, which must be
held by June 1989. The best predictions are that
Papandreou will wait until the spring of 1989 to call
the election, but nothing would prevent his calling a
snap election at any time. He is likely to manipulate
the negotiating process to produce political advantage,
even to the point of appearing to have broken off the
talks. He appears convinced, however, that retaining
the US bases is to Greece's advantage, particularly as a
guarantee against the perceived threat from Turkey.
9. Elections always have been fairly close between
New Democracy and PASOK and are likely to be even
closer the next time around. Papandreou probably can
keep the PASOK left wing behind him-they have
nowhere else to go-but he probably worries about
retaining centrist voters. The latter essentially want a
base agreement, but want tough terms regarding
Greek security interests.
10. Referendum. As his chosen means of finessing
his 1981 promise to eliminate the US bases, Papan-
dreou promised in a speech to Parliament last May to
put any agreement to a popular referendum. By
obtaining popular consent for the agreement, the
Prime Minister hopes to mute objections from the left
wing of PASOK and the Communists, who are unalter-
ably opposed to the bases. Papandreou is clearly
counting on the conservative New Democracy Party
for support in the referendum and probably believes
he can sway sufficient numbers of PASOK voters to
achieve a majority. The timing and form of the
referendum is up to Papandreou. He also has an-
nounced that any agreement would be submitted for
review to a special PASOK committee.
11. Papandreou has several options for timing the
referendum and the general election. It is impossible
to predict which he will choose; that decision will
probably be made only after the negotiations are
under way and he has a sense of how they are going
and how they mesh with his own political agenda. One
option is to hold the referendum and call a general
election soon thereafter, using the spillover of a poten-
tially successful referendum campaign to his benefit in
the election. Another is to hold them simultaneously,
or even call the election a referendum itself. A third
option is to suddenly call off the negotiations, declare
them unsuccessful, and take advantage of leftist satis-
faction with this eventuality to win a majority in snap
elections. With a renewed majority in his pocket,
Papandreou might be inclined to reach agreement on
the bases, objections from the left notwithstanding.
This option would obviate the need for a referendum.
12. Public and Party Opinion. Greek public opin-
ion about the bases is divided and tends to reflect the
way the question is put. A May 1987 poll held in the
greater Athens area shows that only 40 percent of the
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Figure 2
Steps Toward an Agreement
14. In order to wirt a referendum, Papandreou must
capture centrist votes and maintain broad support
within PASOK. In October 1987 only 58 percent of
PASOK supporters wanted the bases to stay if this
were in the national interest. Interestingly, 67 percent
thought that in the end the bases would stay.
Greek
initial of
agreement
Submission
to popular
referendum e
Greek
parliamentary
approval
US
initial of
agreement
respondents supported retention of the US bases.
However, when the bases were associated with Greek
national security, 63 percent favored keeping them. In
October 1987, the same pollster found that only 48
percent of respondents in the greater Athens area
wanted the bases to stay even if they served Greek
national interests.
13. Among the various political parties, there is also
division of opinion on the bases. The conservative
opposition New Democracy is generally supportive of
the bases, but in the proposed referendum it would
face the dilemma of supporting a major Papandreou
foreign policy accomplishment or voting against a US
presence it otherwise supports. The KKE, is absolutely
opposed to the presence of US bases and cannot be
expected, even for tactical reasons, to support any
negotiated agreement.
15. Role of the Military
has the same concerns over national security issues and
the threat from Turkey as the political leadership; it
will probably encourage driving a hard bargain, but
will support the principle of continued US military
presence.
16. Greek Elites and the Bases. There is no signifi-
cant part of the Greek polity that unreservedly accepts
the bases. Relations with the United States still suffer
from the 1967-74 colonels' regime and the 1974
Cyprus invasion by Turkey. Political conservatives are
generally supportive of the idea of a US military
presence, but the nationalistic feelings that run high
throughout Greek society dictate that even this sup-
port must be couched in terms of Greek national
interest, rather than overall alliance strategy against a
Warsaw Pact threat. Greeks generally have a personal
regard for the United States; many have relatives who
have emigrated here. Greek businessmen might see the
retention of the bases as an indication of faith in
Greece. Yet, in general terms, there is no strong
internal Greek constituency for the continued US
presence.
17. The Role of Papandreou. What must be borne
in mind is that Papandreou will be the ultimate
political arbiter on the Greek side. Although the
negotiators may have some latitude in tactics, the final
outcome will be decided by the Prime Minister.
18. Domestic realities have compelled Papandreou
to moderate his policies, particularly in the economic
arena. To appease the left wing of his own party as
well as the Communists, on whom he relies for
electoral support, Papandreou turns to rhetorical ges-
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19. Economic Situation. Economic factors will
loom large in Greek considerations. In support of the
bases, the United States spends approximately $100
million per year in Greece, including salaries of Greek
employees, local purchases of fuel and other commod-
ities, and rent payments. Greece's public external
debt, as of 31 December 1986, is approximately $18
billion. While direct earnings from the bases offset
only a tiny fraction of the total debt, indirect earnings
from coproduction schemes and other monies injected
into the economy by the US military presence also
provide the Greeks badly needed foreign exchange.
probably worry that earnings from US tourism-
estimated at $300-400 million per year-would be
affected adversely by a reduction of the US base
presence.
20. Greek unemployment is officially estimated at
287,000, as of 31 December 1986, 7.4 percent of a
total labor force of 3.9 million. The loss of about 1,000
jobs at DECA installations would have an insignificant
impact on unemployment, though it might become a
political factor if economic conditions deteriorate,
making the potential impact of the loss of jobs and
income an issue with labor groups, many of whom are
PASOK supporters.
21. Security assistance provided by the United
States significantly assists in Greek military modern-
ization. The Greek military depends on US security
assistance for, modernization, using the monies to
purchase new equipment while reserving domestic
funds for operations and maintenance. The adminis-
tration requested $435 million in Foreign Military
Sales (FMS) credits for FY 1988; $343 million was
allocated for FY 1987. Although recent Bank of
Greece figures estimate that Greece's net borrowing
may hit zero for 1987, Greece cannot self-finance
military purchases from its existing reserves. The
Greeks may request concessional FMS credits or even
Military Assistance Program (MAP) grants; however,
Greek per capita income is too high to qualify for
concessional FMS. A lack of financing limits Greece's
commercial alternatives for military purchases.
International Factors
22. The facilities provide the Greeks psychological
security vis-a-vis perceived threats from Turkey and
the Warsaw Pact. Although there are no US combat
units stationed in Greece, the proximity of Sixth Fleet
units and the ability of the bases to support US,
NATO, and Greek national forces provides tangible
reassurance of US and NATO commitment to the
defense of Greece against the Warsaw Pact. The role
of the bases in countering the perceived Turkish threat
is less clear-cut, but the Greeks presumably calculate
that the presence of the bases contributes to US
interests in restraining Turkish attacks.
23. PASOK's foreign policy aims at projecting
Greece as a bridge between Europe and the Third
World. Greece has expanded ties to much of the Arab
world and has attempted to align itself with the Third
World on many issues. Retaining the US military
presence would, therefore, represent a degree of con-
tradiction in Greek policy;
24. Greece and Turkey. A perceived threat from
Turkey is overwhelmingly the most important deter-
minant of Greek foreign policy. Greece claims that,
after 1973, Turkey initiated an openly expansionist
policy in the Aegean Sea and has refused international
arbitration in the dispute. Moreover, long-continued
intercommunal strife in Cyprus has heightened ten-
sions between Greece and Turkey. The 1974 Turkish
intervention in Cyprus, coupled with the fall of the
junta, magnified Greek mistrust of Turkish intentions
and solidified the perception that the gravest threat
comes from Turkey. More recently, Greek-Turkish
relations were severely strained by the Aegean crisis
last March, in which Greece sent its fleet to sea to halt
Turkish exploration of the disputed Continental Shelf.
25. Greek-Turkish relations will vary between tol-
erable and bad, independently of a DECA agreement.
Periodic episodes of heightened tension, such as oc-
curred last spring, are generally followed by periods of
increased contact between the political leaders. At
present an exchange of letters between Papandreou
and Turkish Prime Minister Ozal is keeping the
relationship on an even keel, and Papandreou has
opened a dialogue with the Turkish Ambassador in
Athens on such issues as the Persian Gulf situation
26. Greece and the Warsaw Pact and Moscow.
Greece views the military threat from the Warsaw
Pact as serious but latent, lacking the immediacy of
the perceived threat from Turkey. The Papandreou
government has increased contact with its Balkan
neighbors, especially Bulgaria, and has joined in a call
for a Balkan nuclear weapons free zone. A "security"
agreement with Bulgaria and related consultations, for
example, during the Aegean crisis of last March,
reflect the Papandreou government's more neutralist
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position, stressing independence from NATO and the
West. Tactically, it also had the advantage of compli-
cating Turkey's military planning.
27. Papandreou also has improved PASOK ties to
the Soviet Union, and the Soviets have been working
with PASOK and Greek peace groups to promote
opposition to the bases. The Soviets have cultivated
Papandreou and his party to the detriment of their
relations with the KKE. This has been a calculated
political move, in which the Soviets see PASOK as a
more promising vehicle for the promotion of Soviet
foreign policy interests than the KKE, which is unlike-
ly to have any significant role in the Greek Govern-
ment.
28. NATO. The Greeks place a self-serving empha-
sis on their country's geostrategic importance to
NATO as a link in the defense of NATO's southern
flank. Greece feels betrayed, however, by NATO's
unwillingness to take sides to guarantee her security
from the perceived Turkish threat. Greek-NATO rela-
tions are a virtual hostage of Greek-Turkish relations.
29. A basic tenet of PASOK's program was to
withdraw Greece from NATO entirely. (Greece had
withdrawn from the integrated military structure of
NATO in 1974, but partially reintegrated in 1980.)
Papandreou has not put this policy into effect, but he
and his ministers have often played to the Greek left
and the Third World by differentiating Greek policy
from that of the alliance at NATO ministerial meet-
ings, often embarrassing the organization. The other
NATO members understand the strategic necessity of
keeping Greece in the alliance and, should negotia-
tions deteriorate seriously, could be counted on to
support negotiation of an agreement that would keep
Greeks might initially press for explicit security guar-
antees of protection from Turkish military action
against Greece and even for inclusion of an item on
Cyprus. The United States has always categorically
rejected explicit inscription of security guarantees and
a ratio of Greek to Turkish security assistance in a
DECA. Greek demands heretofore have been met by
assurances of US interest in balanced military assis-
32. Greece knows that the United States has, in the
past, rejected such specific inclusions and has no
reason to expect something different in these negotia-
tions. The arguments that Greek-Turkish relations are
better handled bilaterally and that Cyprus is not a
bilateral Greek-US issue are likely to be accepted by
the Greek Government in the end, but much of the
private discussions and Greek public play of the
negotiations will probably revolve around these issues.
33. Security Assistance. Winning explicit reference
in the DECA to the unofficial 7:10 ratio of security
assistance to Greece and Turkey will probably be a
Greek goal again in these negotiations, as it was in
1983. Greek attachment to this ratio might dissolve,
however, if there appears to be a realistic prospect of
Congress deeply cutting Turkish assistance or if the US
accommodates Greece in other related areas.
34. Greece also will seek continued substantial
amounts of security assistance. Accumulated FMS
credit allocations were used to pay for the recent F-16
purchase. However, Greece will face increasing diffi-
culty in the next few years in repaying FMS debt
incurred in the F-16 buy and may demand concession-
al FMS credits or MAP grant assistance.
the existing US presence intact.
30. European Community. Papandreou came to
office in 1981 pledging to hold a referendum on
European Community (EC) membership, with an eye
to withdrawing from the Community. Ironically, Pa-
pandreou now sees domestic prestige value in Greece's
turn in the EC presidency, June-December 1988, and
may trade on that prestige to hold elections during this
period.
Greek Goals in the Negotiations
31. Greek goals will be to serve Greek national
security objectives, principally to ensure continued
restraint of Turkey's perceived aggressive intent and to
limit continued US security assistance to Turkey while
ensuring security assistance adequate to finance con-
tinued modernization of the Greek military. The
35. The Greek demand for specific weapons sys-
tems will be keyed to matching those that the United
States provides to Turkey and maintaining a balance
in the Aegean. For instance, under the Southern
Region Amendment, Turkey received 40 F-4E air-
craft. Both Greece and Turkey were offered older F-4
C/D aircraft. The Greeks complained that they want-
ed F-4Es, arguing that such a transfer was necessary to
maintain balance in the Aegean.
36. Reduction or Closure of the Bases? Papan-
dreou's 1981 campaign promises, his subsequent in-
temperate rhetoric and his pledge to begin the negotia-
tions from a zero base notwithstanding, the Greeks
almost certainly will not demand the closure of all the
bases in Greece. Papandreou may disagree philosophi-
cally with the presence of the US military in Greece
and see domestic political costs in it. Nevertheless, he
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appears convinced of the importance of the US pres-
ence in countering the Turkish threat and of the need
for continued US security assistance.
37. The Greeks may claim, however, that closing or
significantly reducing operations at one or more bases
may be politically necessary in selling an agreement to
the public. Hellenikon Air Base, located in a Commu-
nist-dominated suburb of Athens and the venue of
longstanding labor problems with the Greek employ-
ees, is the most likely candidate. However, the Greeks
can be expected to look carefully at all the US bases.
38. The Greeks are certain to watch US base negoti-
ations with Spain closely, especially the Spanish de-
mand for withdrawal of a US F-16 wing from Torre-
ion Air Base, which the Greeks feel closely parallels
Hellenikon. Both bases are politically sensitive because
of their proximity to the capital city and draw an
inordinate amount of attention to the US presence;
other US bases in Greece are remote from major
population centers and cause less turmoil. However,
the Greeks feel a real security need for a US presence
that the Spanish do not. Should US force reductions
occur in Spain, the Greek side will come under
significant pressure to match these.
39. Greek Control of DECA Bases. There is no
indication that the Greeks will demand giving US
bases the appearance of joint or NATO defense instal-
lations, with Greek commanders, nominal Greek con-
trol of the installations, and "two flags" flying. The
Greeks have in the past rejected this type of close
identification with the US military presence, prefer-
ring to maintain an image of grudging acquiesence in
a temporary tactical necessity. In response to a US
offer (as was made in 1983), however, the Greeks
might be inclined to consider it as an option, in order
to increase restrictions on the bases.
41. Duration. In line with PASOK's commitment to
the eventual removal of the US bases from Greece,
Papandreou may push for a more definitive duration
clause in the new DECA. The Greeks considered the
duration clause in the 1983 DECA a strict timetable
for terminating the US presence. The Greek side may
initially demand a similar definitive timetable this
time to emphasize that its ultimate goal is to end the
US presence.
How Will the Greeks Approach the
Negotiations?
42. Greek negotiation plans are fluid. Although
Papandreou may have a general plan of where he
wants to go and what is politically acceptable to him
and the left, there are contradictory indications of how
long he is willing to string out the negotiation process.
If those specific plans become evident, they will be so
only after the negotiations progress and Papandreou
can judge their impact on his own political agenda.F
43. Papandreou has said that the negotiations will
begin at a "zero base," as if the bases do not exist. This
is effective in putting the best face on the negotiations
for the Greek public and defines the key element of
strength Papandreou sees in the Greek position. In
view of its need for security support from a major
power and for assistance in procuring and financing
military equipment, Greece needs the United States,
and virtually its only bargaining chip in the security
relationship is an ability to threaten closure of the US
bases.
44. Another element of strength in the Greek posi-
tion is the Greek lobby in the United States. Although
the lobby is less supportive of the PASOK government
than it was of earlier conservative regimes, Papan-
dreou may well count on Greek-Americans to press for
US acceptance of security guarantees against Turkey
and to palliate the negative effects of some of the
stronger US bargaining points-reductions in security
assistance and increased assistance for Turkey.
45. Papandreou has hinted that he will conduct
"parallel negotiations," leaving the technical matters
up to the negotiating team while reserving political
issues to himself. This is compatible with Papandreou's
style of governing and his need to keep a finger on the
political pulse. It will mean, however, that the Greek
negotiator will have limited freedom of action and
authority-and that the negotiating process will re-
main stalled for long periods while Papandreou waits
for a propitious moment in domestic politics to pro-
duce apparent movement on the bases. Moreover, the
technical negotiations are likely at some point to arrive
at an impasse that only can be resolved with Papan-
dreou outside the negotiating process.
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46. Papandreou can use the base negotiations as a
unique issue in his electoral strategy. He needs to
balance the left's distrust of his more moderate policies
by demonstrating Greece's independence of US influ-
ence; with the right he must balance distrust of his
socialism and his "neutrality within the alliance" with
responsible actions that maintain Greek security ties to
the West. The base negotiations contain both risks and
opportunities to placate both sides.
47. It is the center that Papandreou needs to win
elections, but he needs also to forestall leftist defec-
tions from his own party by appearing tough with the
United States. He may be tempted at some point to
"terminate" the negotiations and call snap elections,
hoping thereby to retain needed leftist votes. With a
renewed majority, he presumably would be able to
resume talks and reach an agreement.
48. Unpredictable events, however, may force an
alternative scenario. An unexpected crisis with Turkey
over the Aegean or Cyprus, for instance, would en-
hance the value the Greek Government attaches to the
US military presence. However, it might trigger a
public reaction that Papandreou could not control and
limit his options, reducing the likelihood of reaching a
satisfactory base agreement.
What Leverage Does the United States Have?
49. US interest in maintaining its military presence
in Greece does not mean that the Greeks have an
overwhelming advantage in negotiating. The United
States has significant points in its favor at the outset of
the negotiations. Probably most important is that the
bases provide a de facto guarantee against the threat
Greeks perceive from Turkey. The perceived US
commitment to restraining Turkey is heightened by
the presence of the bases. Further, the risk of involving
US personnel in any military action against Greece is
seen as a deterrent to aggressive Turkish plans. A
concomitant point is that a reduction of US activity in
Greece would mean an increase in US activity in
Turkey and, if only in Greek perceptions, an even
greater shift toward Turkey by the United States.F_
50. Another significant point is that US security
assistance and US-origin equipment are important to
the maintenance and modernization of Greek military
forces. The Greek military likes and is dependent on
US equipment. Although the Greeks also have French,
German, and coproduced equipment, the bulk of
army and air force equipment has been provided by
the United States. Greek military leaders and techni-
cians are trained in the United States on US equip-
ment and are familiar with US doctrine
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51. US security assistance allows the Greeks to
modernize and maintain their forces at a level beyond
their own means. Financing for military purchases is
not available from other sources, and US assistance
eases the foreign exchange burden of military expendi-
tures. Although Greek coproduction schemes with
third countries may inflate Greek pride, the economic
burden of self-reliance in defense-and the degraded
quality of major end items-would be difficult to 25X1
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52. The Greeks want to develop their indigenous
defense industry. Western technology is necessary for
them to continue on this track. Greek military and
defense experts are convinced of the technological
superiority of US and Western equipment.
53. A final point in the US favor is its ability to
count on pressure from NATO allies to get Greece to
accede to a continued US presence. Removal of the US
bases or significant curtailment of their operations
would entail the loss of real capabilities and force a
reassessment of the existing distribution of the Europe-
an defense burden. Moreover, Greece's shedding a
major part of its contribution to the alliance would
place in question the commitment of member states to
could put pressure
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54. A perception that Greece was being obstreper-
ous might also rebound against Greek interests in other
European forums. Greece wants to prevent Turkey's
attaining full membership in the EC, and an unhelpful
attitude on the bases might hinder that objective. F 25X1
Implications for US Negotiators
55. The conduct of the negotiations will flavor
Greek-US bilateral relations for some time to come.
There is no reason to believe that the negotiations will
permanently sour the relationship, but a confronta-
tional episode will put a certain edge on it. (s NF)
56. A US attempt to influence Greek public opinion
would quickly be seen as such and would be counter-
productive. For better or worse, the Greek Govern-
ment will bear the responsibility for shaping Greek
public opinion. (s NF)
57. The outcome of the negotiations will have only
limited impact on the unsteady Greek-Turkish rela-
tionship. To the extent that it assures the Greeks that
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the region, and to the extent that the Greeks are
mollified by the deterrence offered by the bases, that
relationship can be strengthened. These negotiations
alone will not lead to a rapprochement. Indeed, they
could exacerbate Greek-Turkish tensions if Papan-
dreou resorts to extreme nationalistic rhetoric in selling
the agreement to the Greek public.
58. Greece's status in the NATO alliance will be
reaffirmed by a successful conclusion of the negotia-
tions; Greece will be seen as a more trustworthy
partner in the alliance. However, this is not a Greek
priority, and Papandreou will continue to differ loudly
with NATO and the United States whenever he feels
the political situation warrants.
59. The US negotiators must bear in mind the
following:
- Although the Greeks will be able to control the
timing and progress of the negotiations-and for
political reasons of their own they may be in-
clined not to be in a hurry-both the United
States and Greece know that the bases are in the
Greek interest, at least for the time being.
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- Greece will want the outcome of the negotiations
to reflect its concerns about out-of-area opera-
tions and may seek restrictions.
Negotiations that attempt to establish a conver-
gence of views between the United States and
Greece will be counterproductive; Greece, al-
though less blatantly anti-American than in the
past, still chafes under close identification with
the United States.
Papandreou's intent to conduct "parallel negotia-
tions" at the political level, leaving the technical
questions for the present negotiations, under-
scores the fact that he is the ultimate arbiter and
that the negotiators have no policy responsibility.
Above all, domestic political considerations will
be paramount in Greek calculations.
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October 1953
April 1967
1973
July 1974
February 1975
July 1977
October 1980
January 1981
October 1981
December 1983
November 1987
ANNEX A
Chronology of Greek Bases
Greece joins NATO.
US-Greek military facilities agreement authorizes construction, de-
velopment, use, and operation of military facilities for NATO plans;
subsequent technical arrangements for individual bases uses this
agreement as a basis.
Colonels' coup overthrows civilian government.
US Sixth Fleet gains home port at Elevsis.
Junta falls; Greece withdraws from NATO military command.
Renegotiation of 1953 agreement begins.
Greek Government initials accord, but does not seek parliamentary
approval.
Greece partially reintegrates into NATO military command.
Negotiations resume on US military presence.
PASOK government is reelected.
Present DECA enters into force.
New DECA talks begin.
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ANNEX B
Referendums Past and Future
Papandreou in Trouble
Greek Prime Minister Papandreou's 24 May 1987
announcement that he would place the results of US-
Greek negotiations on the Defense and Economic
Cooperation Agreement (DECA) before the Greek
people in a referendum came in the wake of eight
months of political troubles for his Panhellenic Social-
ist Movement (PASOK):
- Municipal election losses in October. The Com-
munists withheld their support in protest of
PASOK's decision not to change the electoral law
in their favor, precipitating PASOK's surprising
losses in Greece's three major cities-Athens,
Piraeus, and Thessaloniki.
- Poor economic forecast. A two-year austerity
program, begun in 1985, made a dent in infla-
tion-which dropped from 19.3 to 16.8 percent
in 1986-but the resulting 8-percent drop in
workers' real income has sparked fierce protests
from all quarters. This opposition is bound to
intensify since the government has announced
that it will fall well short of its goal of reducing
inflation to 10 percent in 1987.
- Political scandals. A wave of political scandals
this fall exposed corruption among PASOK-ap-
pointed public officials, government-controlled
corporations, and high-level PASOK party func-
tionaries. Although most of the various scandals
did not touch Papandreou himself, public airing
of PASOK's dirty laundry hurt the party's image.
- Dispute with the Church. In March 1987, Pa-
pandreou moved to fulfill an old campaign
promise to seize over 300,000 acres of Church
land for redistribution to Greek farmers. In
addition, the bill submitted to Parliament called
for greater government involvement in Church
administration. Papandreou-who no doubt
hoped to garner support from farmers and left-
ists-was probably surprised at the amount of
opposition rallied by the Church against these
moves. Although PASOK's parliamentary major-
ity passed the bill, the controversy raged for
nearly a month.
Nationalist feelings united Greeks behind Papan-
dreou when the Aegean dispute with Turkey brought
both nations to the brink of war in late March. We do
not believe Papandreou staged the incident with Tur-
key to gain domestic political points, but he certainly
took advantage of the opportunity to strike a tough
posture that won him public acclaim. Although the
resulting euphoria was short lived, it may have under-
lined for Papandreou that foreign policy issues have
traditionally brought him support. In fact, polling
suggests that PASOK's political strength is dependent
more on foreign than on domestic policies.
This may explain why Papandreou responded to a
second wave of public scandals in May by apparently
pulling the referendum idea out of his hat. The
dramatic announcement-coupled with his call for a
parliamentary vote of confidence-enabled Papan-
dreou to seize the political initiative from the conser-
vative opposition and to once again set the agenda for
political discussion in Greece.
The referendum idea, nevertheless, was probably
not a spur-of-the-moment inspiration. Dealing with
the bases has no doubt been on Papandreou's mind
since his meeting with Secretary Shultz in spring 1986
in Athens. As early as fall, the Greek press speculated
that Papandreou would call a referendum on the
The referendum, while serving short-term political
needs, also could solve some of Papandreou's longer
term problems:
- Strengthens his negotiating position. Papan-
dreou will be able to raise the spectre of the
referendum to try to force the United States into
concessions. He can claim the referendum will
not pass unless Greek conservatives can see US
economic concessions, leftists are satisfied Greece
has been given tighter control over the bases, and
all Greeks believe their strategic balance with
Turkey has been ensured.
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Allows him to "spread the blame" for this
apparent policy reversal. Popular approval for
any DECA he negotiates will help Papandreou
deal with objections from PASOK's left wing,
which will almost certainly remind him of his
promises to remove the bases; he will be able to
claim he is merely obeying the "will of the
people. "
and negotiate a new deal. Without ND backing, the
referendum could have difficulty passing.
Opposing the referendum could hurt ND's credibil-
ity, but the conservatives might seek to portray a
PASOK-negotiated DECA as too weak a deal for
Greece. Defeating Papandreou's DECA referendum
could be used to force early elections. ND could then
campaign on a promise to return to the negotiating
The History of Greek Plebiscites
Papandreou may have been inspired by the three
referendums that have been held in the last 20 years
with the aim of providing public approval for contro-
versial programs:
- 29 September 1968. Less than a year after the
junta took over, a new constitution was promul-
gated and ratified by popular vote. Heavy police
pressure to turn out the vote, and perhaps to
influence how people voted as well, ensured that
the constitution was approved by 92 percent of
the voters.
- 29 July 1973. After Papadopoulos declared
Greece's Third Republic on 1 June 1973, a
referendum was held to confirm the decision.
Some 78 percent of the population voted to
abolish the monarchy.
-8 December 1974. Following the restoration of
democracy in 1974, the Greeks reaffirmed their
earlier decision to get rid of the monarchy in a
referendum that endorsed Greece's being a re-
public by some 70 percent.
Papandreou's current referendum, nevertheless, has
a unique spin. It will be the first referendum on a
specific policy; the other three were decisions on how
Greece was to be governed. This idea is much closer to
the referendum on EC membership that Papandreou
called for during his days in opposition and later
dropped. He may also have been inspired by the
recent Spanish referendum on NATO.
New Democracy: To Support or Not To Support
Papandreou is almost certainly counting on the
backing of the conservative opposition New Democra-
cy (ND) party to pass the referendum, but he may be
miscalculating. ND has long supported the US pres-
ence in principle; it did not, however, support the text
of the 1983 DECA negotiated by PASOK. Therefore,
in a referendum on the specifics of the negotiated
agreement-which is what Papandreou has pro-
posed-ND may advocate abstention or even opposi-
tion, hoping perhaps to pick up the pieces afterward
table with a new, tougher bargaining stance.
Framing the Question May Be Crucial
Public opinion polls show increasing acceptance of
the US bases since 1983, but a majority still appear to
favor closing them. Those in favor of keeping the bases
have increased from 28 percent in 1983 to 40 percent
in May 1987. Opposition-"go in a few years" plus
"go immediately"-has declined from a high of 72
percent in April 1984 to 51 percent in 1987, the lowest
level in five years.
If it can be demonstrated that dismantling the bases
would harm Greek security, however, a majority
would probably vote for retaining them. When asked
what the government should do if closing the bases
would weaken Greek security, support for retaining
the bases increased from 57 percent last year to 63
percent this year. Winning a bases referendum, there-
fore, is likely to depend on successfully linking them to
Greek security.
Papandreou's recent public pronouncements on the
bases indicate that he understands this connection
between security concerns and potential support for a
new DECA. He has insisted that any agreement must
address Greece's "national interests''-that is, must
ensure Greek security against the "Turkish threat." He
has also publicly stated that the US presence in the
Aegean is crucial for ensuring the balanced power in
the region.
Outlook
On the positive side, Papandreou's call for a refer-
endum on the DECA implies that he intends to
negotiate a new agreement and to publicly support
maintaining a US military presence in Greece. But
Papandreou's call for a referendum, though politically
shrewd, is also very risky-both for him and for the
United States.
For one thing, he will be under even more pressure
to drive a hard bargain. Now that he has essentially
acknowledged his willingness to continue the US mili-
tary presence in Greece, Papandreou will have to
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prove he still "stands up to the Americans" and that he
is driving a hard bargain with Washington. The
United States, therefore, is likely to remain a promi-
nent target in his speeches about the international
scene in general. Moreover, the Greek Government
will react even more vocally to "offenses" from Wash-
ington, as it did in recent responses to the US de-
marche about an alleged deal between Greece and
Abu Nidal. In short, to ensure public approval for the
new DECA, Papandreou will have to demonstrate that
he is driving a hard bargain with the United States.
Beyond that point, the crystal ball gets a little
fuzzier. Although before the recent falling out over
Abu Nidal Papandreou indicated a willingness to
begin procedural talks on the DECA, we believe he
has long intended to postpone the actual negotiations
and the referendum as long as possible. The next
national election must be held by June 1989, and we
think Papandreou will be reluctant to go to the polls
early unless he is certain of success. For one thing, he
probably wants to ensure that he is still in
office when Greece attains the EC presidency in mid-
1988. Since few politicians would choose to face the
electorate twice in two years, Papandreou may well tie
the referendum closely to this election, holding it
immediately before, simultaneous with, or even after
the election
Ultimately, he may not actually hold a referendum.
Papandreou could finesse his promise to hold a refer-
endum in a number of ways, most probably by
declaring the next national election a de facto referen-
dum on his performance in the DECA negotiations.
The negotiations need not even have concluded in
order for him to do this. Indeed, he could argue that
reelection would improve his bargaining position. Such
a move does have a precedent in Greek history: in
1977, during an especially tense time in Greek-Turkish
relations and a critical stage in Greece's application for
EC membership, Prime Minister Karamanlis called an
election, claiming that such crucial decisions could
only be taken by a government armed with a fresh
mandate.
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ANNEX D
A Summary of Current Basing Agreements
Turkey
In Turkey, the United States has access to airfield
installations
The initial five-year term of the US-Turkey
agreement, which was to end on 18 December 1985,
was renewed for another five years on 16 March 1987.
Ankara suspended the renewal this spring following
US Congressional resolutions critical of Turkey. The
agreement, however, remains operative on a year-to-
year basis until the renewal is ratified by the Turkish
Government. Both in 1980 and 1986, the United States
pledged to exert its "best efforts" to obtain defense
support for Turkey in accordance with mutually
agreed programs. In 1986, the United States also
promised to try to extend the Southern Region
Amendment for transferring surplus US military
equipment to Turkey on a yearly basis.
Spain
The United States concluded an agreement with
Spain in 1982 for US rights and access to extensive air,
naval, and support facilities. The executive branch
pledged its "best efforts" to continue to obtain funding
at the then current level of $400 million FMS and $12
million ESF. The agreement has a nominal termina-
tion date of 1988 but is automatically extended on a
year-to-year basis unless one party notifies the other
six months in advance of its intention to terminate the
agreement.
In a joint communique issued in December 1985,
the United States and Spain agreed to begin negotia-
tions on reductions of US forces in Spain, with the
understanding that the Spanish military would take
over those missions no longer performed by US forces.
The major Spanish demand in the first round of
Figure 5
Economic and Security Assistance for
Countries With Basing Agreements
Type of funding
L
ESF
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0
0
0
FMS' 0 FMS'
Turkey
negotiations, which began in July 1986, focused on the Spain
withdrawal of the 401st Tactical Fighter Wing with its
72 F-16 aircraft. The issue remains unresolved at this 500
time.
Philippines
The United States and the Philippines signed a
Military Bases Agreement in 1947 that has been
amended and modified, but never renegotiated. The
agreement, as modified, gives the United States access
until 1992 to seven bases and facilities. The United
States agreed to consult the Philippine Government
before initiating combat operations other than those
falling under US-Philippine Mutual Defense. In June
1983, the United States agreed to provide $900 million
in compensation for 1985-89.
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ANNEX E
Seats Percentage of
Vote
Pan-Hellenic Socialist Movement 161 45.8
(PASOK)
2 Splinter of New Democracy.
b Name change for old Communist Party of Interior.
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1. This document was disseminated by the Directorate of Intelligence. Because of the
sensitive nature of some source material reflected herein, this copy is for the exclusive
information and use of the recipient only.
2. This document may be retained, or destroyed by burning in accordance with applicable
security regulations, or returned to the Directorate of Intelligence.
3. When this document is disseminated overseas, the overseas recipients may retain it for a
period not in excess of one year. At the end of this period, the document should be destroyed
or returned to the forwarding agency, or permission should be requested of the forwarding
agency to retain it in accordance with IAC-D-69/2, 22 June 1953.
4. The title of this document when used separately from the text is unclassified.
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Secret
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