Germany and the United States,, During the 1949-61 period, Portugal
received #370 million worth of aid from the United States of which
#80 million was for economic and #290 million for military assistance.
In 1965 an American journalist reported that since 1959 Portugal
had received #300 million in US military aid. The official figures
for "military^assistance" over the 1962 - 68 period are given as
#33.7 million. However, in,-addition there is an undiscovered
amount of "defence support". West German assistance to be about
#3 million per year. French assistance is confined to long-term
credits (10 - 20 years at 6% interest) to finance military supplies.
Contracts are concluded in co-operation with the French Government
who also guarantees the loans.
In addition to the direct provision of war finance and heavy capital
involvements in bases, the NATO partners further assist Portugal in
the neo-railitary fields of finance and commerce with huge loans and
investments, without which the economy could not possibly stand the
strains of the war. As Prime Minister Caetano himself said in
November I968: "All the military effort overseas has been and
will go on being supported by resources coming from ordinary, income,
which before was largely used to cover development expenses* Now;
we have to face many of the expenses with money obtained by loans."
In other words, as a UN report concluded, foreign loans serve to
finance the military expenditure of Portugal. Similarly, the
huge commercial investments of NATO countries, enticed by cheap
labour and access to cheap materials from the colonies, also help
to prop up the economy and the Government, as do the trade preferential granted by NATO allies in EFTA.
1 In an age when evils of colonial systems
"free world" backing     are universally, or almost, recognised, the
■ ■ ■ ■   significance of Portugal's alliance with
the leading countries of the Western world as a means of legitimising
the regime, cannot be ignored. Their negative attitude to United
Nations resolutions on Portuguese colonialism, for example, provide
a complete vindication of Portugal's policies and must be a source
of encouragement to Prime Minister Caetano. Moreover, with the
trump card of the Azores bases, Portugal is in a strong position
not only to prevent any interference in the overseas territories,
but also, as is becoming increasingly evident, to enlist more
open support for her policies.
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