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Greek-Yugoslav (con)federation or Balkan Union was a political concept during World War II, sponsored by the United Kingdom, and involving the Yugoslav government-in-exile and Greek government-in-exile. The two governments signed an agreement pushing the proposal ahead, but it never got beyond the planning stage, due to opposition from within certain factions of the Yugoslav and Greek governments, and the real world events (primarily the opposition from the Soviet Union). The proposal envisioned the creation of a confederation of Greece and Yugoslavia.
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Background
Greece and Yugoslavia were occupied by Nazi Germany, and formed governments-in-exile in London.
Establishment of this union was the first step of the British "Eden plan". Its final aim was to create a central-eastern union friendly to the west. The next step was to include Albania, Bulgaria and Romania into a Balkan Union. The last step was planned to be folding of the Balkan Union with a central European federation formed by Hungary, Czechoslovakia and Poland. The first step was restricted to only Yugoslavia and Greece because those were the only countries that supported the Allies.
Agreement
The Greek and Yugoslav governments-in-exile negotiated the conditions of the agreement until the end of 1941. The agreement was signed by Slobodan Jovanović and Emmanouil Tsouderos on the ceremony held in British Foreign Office, presided by the British minister of foreign affairs Anthony Eden. It was explicitly stated in the agreement that both Yugoslav and Greek governments looked forward to accede other countries of the Balkans to the Union., quoted in Wheeler (1980, pp. 157–8) Although caution was advised with revealing the hope that Bulgaria and Romania would join this union, on 4 February 1942 Eden stated in the House of Commons that the treaty signed between Yugoslavia and Greece was definitively going to be a basis for the establishment of the Balkan confederation.
Union
The Greek-Yugoslav Confederation was to have been a first step toward a larger Balkan Union, which would also have included Albania, Romania and Bulgaria. Encouraged by the British Foreign Office, together with the Polish-Czechoslovak confederation, they were to form a West-aligned organization of states between Germany and the Soviet Union. The Greek and Yugoslavian governments-in-exile signed an agreement on January 1942 in which they agreed to form a political, economic and military union, with the motto "The Balkans for the Balkan People". Their governments would not be unified, but there would be much coordination between their respective parliaments and executives. Their respective monarchies were to be unified with the marriage of King Peter of Yugoslavia to Princess Alexandra of Greece. The union was to be finalized after the war.
The marriage of Peter and Alexandra proved to be a problematic move, and reduced support for the union from their respective governments-in-exile. On the international scene, the confederation was received favorably by Turkey, but opposed by the Soviet Union, as Joseph Stalin saw no need for a strong and independent federation in Europe that could threaten his designs to expand the Soviet sphere of influence to East and Central Europe. In 1942 British government decided to support Josip Broz Tito's forces instead of the Chetniks in Yugoslavia and rejected the Eden plan as unworkable. In 1944 the British withdrew their recognition for the Royal Yugoslav government, and recognized the communist Yugoslav National Committee of Liberation of Ivan Subasic, subordinate to Tito. As the war ended, Yugoslavia shifted towards the communist camp, and Greece suffered from a civil war. With little support for the confederation from any existing powers, it was never realized, although it was briefly entertained in the form of a communist federation by some regional communist leaders shortly after the war.
Alternative plans
By the end of 1944 Yugoslav Communist Party began the development of alternative plans for establishment of a Balkan Federation. Because Churchill and Stalin agreed that Greece would be in the Western sphere of influence such plans had to exclude Greece.