I think that the answer, such as it is, is to be found in Churchill’s own account, ‘Triumph and Tragedy’, published in 1953.
Background: By early 1944, the British were concerned about Russian post-war policy in the East. British policy was based on the assumption that post-war cooperation with the USSR in Europe was possible and desirable. In January, 1944, Pravda alleged that the British were planning a separate peace with Germany. The problem of Poland – the nature of the government and the Eastern border – was causing serious discord between Britain and the USSR.
The USA was pre-occupied with elections, and Churchill [who had the Polish government-in-exile on his doorstep] was tending to conduct personal diplomacy over Poland. This diplomacy was unsuccessful in that the Polish government was refusing to agree a post-war border at the Curzon Line, and the cession of Lvov, Vilna and Konigsberg. Churchill more or less gave up making efforts to deal with the matter in the early part of the year.
In May, Churchill asked his Foreign Office for an analysis of “the brute issues between us and the Soviet Government which are developing in Italy, in Roumania, in Bulgaria, in Yugoslavia, and above all, in Greece . . . Broadly speaking the issue is : are we going to acquiesce in the Communisation of the Balkans and perhaps of Italy? ... I am of opinion on the whole that we ought to come to a definite conclusion about it, and that if our conclusion is that we resist the Communist infusion and invasion we should put it to them pretty plainly at the best moment that military events permit. We should of course have to consult the United States first.'
On May 5, Eden told the Soviet ambassador that Britain was willing to let the USSR “take the lead” in Romania, if the USSR agreed to support British policy in Greece. The ambassador came back with an agreement to this proposal, but asked if the USA had been consulted. The USA had not been consulted. The British ambassador in Washington was then instructed to consult the State Department, to see if the US would agree to the British making, in the future, the suggestion that, in fact, they had already made. The British ambassador was instructed to add various sugar coatings to the pill, including that the matter merely reflected the military situation, would not affect the three power decisions at the peace conference, and that the British were not “carving up the Balkans into spheres of influence”, or excluding the US. However, the British were effectively doing exactly what they denied they were doing, and had hidden from the Americans the fact that it had already been proposed. The US Secretary of State was reported as being unhappy with the ambassador’s message. Churchill rushed to send the President a message as a kind of band-aid, stating, at last, that “we had already suggested to the Russians a practical arrangement”. The US State Department was thus now on open notice that the British were attempting something of which the Americans had, in earlier discussions, disapproved – the effective carving up of South Eastern Europe. The State Department duly expressed serious concern. Churchill then, rather feebly, attempted to make the British ambassador understand that there was no question of spheres of influence but “…someone must be playing the hand…” The American President, in due course, responded with a guarded disapproval, making the obvious point that a temporary military arrangement would be likely to affect other arrangements, and suggesting “ … consultative machinery to dispel misunderstanding and restrain the tendency towards the development of exclusive spheres.” Churchill then protested to the President, and suggested that his plan be given a three months’ trial on the express understanding that the British were not suggesting “… any post-war spheres of influence.” While the President agreed, he raised his concern that the British had acted without consulting him. In June, the Russians referred Churchill to the American doubts and indicated that it would deal directly with the USA.
Effectively, by his deceptive behaviour, Churchill had cut himself out of the loop. The Russians then sent a mission to Greece, ignoring British protests, and, in August, invaded Romania. The Romanians started surrender negotiations and, in September signed an armistice with the Soviet High Command as representative of the Allied Powers. Without notice to the allies, Bulgaria was then invaded by the Russians and surrendered. Hungary tried to surrender but the Germans prevented this: the Russians then invaded Hungary. The Warsaw insurrection led to a division between the British and Russians over support for the Poles. The insurrection went down to defeat with only limited allied support, the principal issue being the Russian preference for its unassisted armed defeat of the German army in Poland, followed by the placing of its own puppet government in power.
The British realised that the USSR was not going to share control in areas where its army defeated the Germans and their proxies. Churchill knew, correctly, that the American State Department was now very suspicious of British intentions in Southern Europe. A German collapse was possible any time. Churchill suggested that he visit Moscow, and arrived on October 9 1944.
The Percentages Agreement: Before any discussions took place, but [Churchill implies] with the American ambassador apparently present, Churchill stated to Stalin that he wanted them to settle affairs in the Balkans. The Russian armies were in Romania and Bulgaria, he stated, where the British had interests, missions, and agents, and he did not want them to get at cross-purposes in small ways. And he specifically offered ninety per cent “predominance” in Romania in return for the British ninety per cent “of the say” in Greece, and they could go fifty-fifty in Yugoslavia. As the translation was being made, Churchill passed to Stalin the piece of paper with the percentages written on it, and Stalin agreed in the way you describe. It is not stated whether the American ambassador saw the contents of the note. Presumably, the records in the State Department or the Harriman papers will confirm whether Harriman was actually privy to this exchange. [My remote location and tenuous internet connection make checking this difficult.]
Churchill then says in his history that, in the following silence, while the paper lay in the centre of the table, he made the following statement: “Might it not be thought rather cynical if it seemed we had disposed of these issues, so fateful to millions of people, in such an offhand manner? Let us burn the paper.” Churchill reports Stalin as saying: “No, you keep it.” This exchange is inconsistent with the gloss that Churchill places on the agreement.
In his history, Churchill then states: “Of course, we had long and anxiously considered our point, and were only dealing with immediate war-time arrangements. All larger questions were reserved on both sides for what we then hoped would be a peace table when the war was won.” At no point does Churchill indicate that, at this first meeting, he made any such proviso to Stalin. Nor does he state that he defined to Stalin what he meant by the percentages, and nor did Stalin ask. And if his gloss on it is to be credited, why would it appear cynical? Why would the paper be fateful to millions of people? Why would it be necessary to burn it? Contrary to his usual habit, Churchill does not give any account of the discussions with Eden and others leading up to the writing of the note.
Churchill states that he and Stalin then sent a joint message to the American President “… on our first talk.” It includes the following single statement on what had transpired over the Balkans: “We have to consider the best way of reaching an agreed policy about the Balkan countries, including Hungary and Turkey. We have arranged for Mr. Harriman to sit in as an observer at all meetings where business of importance is to be transacted…”.
The next day, Churchill’s private note to Roosevelt stated that it was necessary to get a common mind with the Russians about the Balkans to prevent civil war breaking out and, he stated: “I shall keep you informed of all this, and nothing will be settled except preliminary agreements between Britain and Russia, subject to further discussion and melting down with you. On this basis I am sure that you will not mind our trying to have a full meeting of minds with the Russians.” And Churchill sent a note to the President’s confidant, Harry Hopkins, stating that the British had so many bones to pick with the Russians over the Balkans that he wanted the discussions to be “… a deux in order to be able to talk more bluntly than at a larger gathering. I will cable the President about this in a day or two. Will you very kindly show this to him?” My interpretation of Churchill’s account is that he was trying to make space for his gloss on what had taken place, and that he was not being frank with the Americans. Avoiding the State department channel for the latter message gave him space to later brief Roosevelt according to the public interpretation he wanted put on what had occurred, while leaving him the opportunity to be frank about his action if it became necessary – if he was ‘caught out’. Again, I have been unable to see if there was, indeed, any later briefing of the Americans on the agreement. Churchill does not quote any later briefing to the Americans on the agreement.
The day following passing over and ticking of the percentages paper, the British and Soviet Foreign Ministers met, and further bargaining took place over the percentages in Hungary, Bulgaria, Romania, and Yugoslavia. Molotov eventually said that what he meant by his percentage figures for Bulgaria, [figures then being disputed by the British] was that he meant that until the German surrendered, Allied control would be shared, but under Russian direction. Once the Germans surrendered, all three allied powers would share control directly. Eden agreed to this understanding. This would appear to be consistent with Churchill’s description of the agreement.
It was during this horse-trading going on elsewhere, that Churchill began to have more pressing second thoughts about how a percentages agreement [and his piece of paper] would appear to the outside world. He drafted a letter to Stalin “… stating our interpretation of the percentages which we had accepted across the table.” He did not send it, but nevertheless, quotes it in full in the history “… only as an authentic account of my thought”. This self-corroboration is Churchill at his most unconvincing as a witness to history.
The self-interpretation is a long one and I refer you to it. He insists that everything agreed is preliminary to a final victory conference, and intended to deal with immediate emergencies. “These percentages which I have put down are no more than a method by which in our thoughts we can see how near we are together, and then decide upon the necessary steps to bring us into full agreement. As I said, they would be considered crude, and even callous, if they were exposed to the scrutiny of the Foreign Offices and diplomats all over the world. Therefore they could not be the basis of any public document, certainly not at the present time.” And there is more in this vein, and an insistence that the Americans must later approve the degrees of interest. Churchill’s final attempt to gloss his action is a note to his ‘colleagues at home’. In this note, he explains that “ … the system of percentages is not intended to prescribe the numbers sitting on the commissions for the different Balkan countries, but rather to express the interest and sentiment with which the British and Soviet Governments approach the problems of these countries…”. Churchill translates the high percentage figures as ‘leading role’ and the “numerical symbol 50-50” in Yugoslavia as meaning joint action by the two victors. He ends the note by describing the system as a broad disclosure of “feelings” of the two powers to be subject to a final settlement.
The only other relevant matter is the eventual way in which Churchill interpreted the Moscow agreement when the British intervened militarily in Greece to suppress the communist insurgency. In his account in the history, Churchill says that he had obtained Russian abstention at the Moscow meeting “at a heavy price,” but that Stalin never objected to British actions, while a storm of protest over British interference arose in America. On a couple of other occasions, he complains about the failure of the Soviet Union to honour the agreement but does not give any more useful interpretive comment. The Russians later used the agreement to restrict the British and Americans in the occupied countries.