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HIS DOGUMENT IS THE-PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT)
CONFIDENTIAL
C.P.(51) 98
2ND APRIL, 1951
CABINET
COPY NO. 31
ECONOMIC AID TO YUGOSLAVIA
Memorandum by the Secretary of State for Foreign Affairs and the President of the Board of Trade
At their meeting on 20th October, 1950, the Cabinet considered a memorandum (C.P.(50) 234) by the Foreign Secretary and the President of the Board of Trade recommending immediate measures to avert a collapse of the Yugoslav régime, since its collapse would have the most serious consequences for our defence and foreign policy (C.M.(50) 66th Conclusions, Minute 2). The Cabinet:-
2.
(1) Authorised the grant to Yugoslavia of credits, not exceeding
£5 millions, for the purchase of consumer goods and sterling foodstuffs.
.(2)
(3)
Authorised the Foreign Secretary and the President of the Board of Trade to proceed with the detailed arrangements set out in paragraph 12 of C.P.(50) 234.
Invited the Foreign Secretary, the Chancellor of the Exchequer
and the President of the Board of Trade to consider, in the light of the Cabinet's decision, how the economic and technical missions which it was proposed to send to Yugoslavia could best be organised.
In accordance with paragraph 12(b) of C.P.(50) 234, £3 millions were made available to the Yugoslav Government in November, 1950, for the purchase of foodstuffs and consumer goods. As the United States Government were able to supply food more quickly than we had expected and as the Yugoslavs urged that the supply of raw materials was the more urgent problem, it was decided by agreement between the Foreign Secretary, the Chancellor of the Exchequer and the President of the Board of Trade (see annexed minute from the Parliamentary Under-Secretary of State for Foreign Affairs of the 19th December, 1950) that the remaining £2 millions of the £5 millions authorised by the Cabinet should be used for the purchase of raw materials. Paragraph 3 of that minute forecast a Yugoslav deficit in sterling alone over the next few months of about £2 millions per month and pointed out that our policy of "keeping Tito afloat" would probably require further substantial sums before the activities of our Economic Mission could produce useful results.
3.
The programme for the use of the two credits has been agreed between the Yugoslavs and the Economic Mission, which was set up in Belgrade in accordance with paragraph 12(b) (ii) of C.P.(50) 234, under the leadership9bf8Francis Mudie. The Economic Misage h65 66 87 been examining with the Yugoslav authorities the general balance of payments,
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