SPECIAL DISTRIBUTION AND WAR CABINET.

From YUGOSLAVIA.

Decypher. Mr. Campbell (Belgrade)

3rd September, 1940.

D. 2.30 p.m. 4th September, 1940.

R. 12.45 p.m. 5th September, 1940.

No. 655

Your telegram No. 455.

Bulgarian Minister remarks on Bulgarian-Yugoslav relations, and politically his opinion constitutes over-simplification of a complex situation. They should not be accepted without prior critical analysis. It is true, however, that relations remain normally good though Yugoslavia's slight disappointment and anxiety over Axis influence on the Bulgarian Government and Russian influence on Bulgarian population seems now rather paltry.

• 2. [South] Macedonia, here again situation is complex. Italy is at work and perhaps Germany too with (incidentally) no friendly intentions towards Yugoslav unity.

• 3. The Macedonians of South Serbia as distinct from Macedonian leaders outside the country may be divided into three main groups: (1) Ideological Federalists whose spiritual leader is Mihailoff, democratic in outlook but lacking political realise. They tend to idealise Bulgarian people but for the present are generally loyal to Yugoslav State. (2) Communist Federalists, whose goal is a free Macedonia within a great South Slav Federation linked to the Soviet Union. (3) Disconsolate peasantry who resist tax collector, withhold their crops, and remain in a perpetual state of discontent against the Serbs.

• 4. It remains to be seen whether Italian propaganda can rе-awaken among the people a movement for an independent Macedonia, the desire for which at present seemed to be practically confined to Macedonian leaders. In any event it seems that the idea of an independent Macedonia under Italian influence is generally regarded as а poor second best by Macedonian leaders who, it seems, would prefer for the present that Macedonians of South Serbia should continue to belong tо Yugoslavia as loyal citizens subject to grant of increased local autonomy.

• 5. Matter should not therefore be over easy for Italy especially if Yugoslav Government are prepared to conciliate Macedonian national sentiment. This they have not so far been prepared to do and recently appointed Ban of Vardarska Banovina is a reactionary “old Serb” with Federalist ideas which he has been putting into practice with brutal thoroughness. It appears however that the Government have been recently trying to moderate his zeal.