Letter from Timothy O’Driscoll to Frederick H. Boland (Dublin)
(19)

With reference to the question of the issue of ECA aid on a grant or loan basis, Mr. Gordon of the ECA told me in conversation yesterday that they had put forward a recommendation covering the division of the $150 million which under the amended ECA act had to be by way of a loan. Specific figures were proposed in the case of Ireland, Portugal and Turkey. He said 'of course, as you know last year's division was on the assumption that the ex-neutrals could afford to take loans'.

The ECA felt this year that ex-neutrals could not be treated more harshly than the ex-enemies and in our particular case that being in the sterling area we were not more credit-worthy than Great Britain.

He could not give me the specific figures put forward in our case, but he said that the figure included a substantial grant component. The difference between the total loans to the three countries mentioned and the statutory $150 million, would be made up by distribution over the larger countries, some countries like Greece being on an entirely grant basis.

Sweden which normally would be receiving a loan will in fact be receiving conditional aid as they are granting drawing rights to the full extent of their dollar deficit. Should the revision of drawing rights following the devaluation reduce the drawing rights granted by Sweden the difference would be transferred from conditional aid to loan.