Suez Settlement

The chasm that split Gamal Abdel Nasser from the West more than two years ago in the Anglo-French invasion of Suez was papered over by money last week. The strongman of the Nile, needing written help to withstand the Communists in the Middle East, got set to make an economic settlement with the British. The U.S. has already agreed to sell him 200,000 tons of surplus wheat, and the French have signed a $5,000,000 barter deal with him. The British-Egyptian compromise was worked out by World Bank President Eugene Black, the discreet and yam-voiced international civil servant from Georgia who also helped the Suez Canal Co. settle with Nasser last spring.

Windfall from the West. Gene Black played the role of honest broker so well that at week's end the first representatives of Her Majesty's government to appear in Egypt since 1957 descended on Cairo. In the final moments of bargaining, the British did not get quite all they hoped for. Knowing how much his own back-bench Tories hate Nasser, Prime Minister Harold Macmillan had pressed hard to get Nasser first to release two Britons jailed as spies at the time of the Suez affair. In the end, Macmillan decided that he could not hold out for a side matter.

Agreement was reached on the key financial points: 1) Britain would unfreeze Nasser's $210 million sterling balances; 2) Egypt would turn back $87 million of them to pay for British properties seized at the time of the Suez landings; 3) Cairo would abandon its bill against Britain for Suez war damage, and the British would waive their claims for equipment seized by the Egyptians from the once great British base at Suez.

The agreement, giving hard-pressed Colonel Nasser a financial windfall that might ease his heavy dependence on Moscow, was perhaps one result of the Communist offensive against Nasser in Syria and Iraq that the Russians may not have expected. Nasser has belatedly begun to move against the Communists. He has arrested several hundred of them in Syria and Egypt, including some Egyptian newsmen, though this news has significantly not appeared in the Egyptian press.

If Nasser now seems to be privately alert to entrapment by Communists, there are some who suspect his motives. Israeli intelligence insists that Communist activities, at least in Egypt and Syria, are not nearly so serious as they have been made to seem, that in fact Nasser is using the Communist threat as 1) an excuse to put down honest Syrian disillusionment at the way the United Arab Republic is working out, and 2) a bogy to frighten Westerners so they will make up to him.

Waterfall from the East. Nasser himself is again playing both sides, as the game of "positive neutralism" requires. Last week no fewer than four Premiers called on him. Italy's Premier Amintore Fanfani, the first top Western statesman to visit Cairo in two years, was there to argue a special Italian affinity for Arabs. Ghana's Kwame Nkrumah passed through; Lebanon's new Premier Rashid Karami dropped in to mend fences; and East Germany's Otto Grotewohl made a formal call on Nasser. Afterwards Grotewohl announced that the two countries, while not generally recognizing one another, would establish "consular relations." West Germany, true to its insistence that it will break off relations with any nation that recognizes Communist East Germany, sent its ambassador over to ask Nasser what was going on. Nasser's aides denied that the boss had promised East Germany anything of the kind.

Until a few weeks ago. the energetic West Germans had hoped to get in on the construction of Nasser's beloved Aswan Dam by offering him $50 million to help build it. Then Bonn for the first time learned about a vital clause in Nasser's December agreement with Moscow. The Russians had demanded and apparently got a veto over all contracts for the first section of the project--building a cofferdam, dividing the Nile around the site, etc. Asked Izvestia sweetly: "Do they [the West Germans] wish to make commitments on the second section of the dam five years beforehand?" In other words, Nasser is stuck with the Russians exclusively at the dam site until 1964, and they can work like beavers if they want to or sulk like turtles. Question: Where does this leave Nasser if the Russians decide to do more than mildly regret his campaign against Arab Communists?

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