Greek national bankruptcy of 1893
The Greek national bankruptcy of 1893 was declared by the government of the Kingdom of Greece after it was no longer able to meet its payment obligations due to a fall in the price of the main export product and territorial conflicts, as well as subsequent investments.
prehistory
During the Greek Revolution , the provisional government had already issued its first loans in 1824/25. After Greece gained independence, Otto was made king, and in the London Protocol of 1830 the great European powers guaranteed the new state, emaciated by civil war, a loan of 60 million francs . However, as early as 1833 the interest could no longer be paid for this loan. As a result, Greece had lost its creditworthiness abroad for many decades . The establishment of the National Bank of Greece in 1841 did little to improve the capital supply.
The raising of capital
In 1879 the way began to raise new capital. Greece agreed with the old creditors to reschedule debts and decided to tackle overdue reforms of the administration and the army. The servicing of the debt appeared assured. Only a fifteenth of the state's revenue was required for debt servicing. In the following 12 years, six government bonds with a volume of 630 million francs were issued and successfully placed in London, Paris and Berlin. The debt burden rose to a third of the national budget. The government bonds were secured with the revenues of the state monopolies on salt, matches and petroleum as well as the customs revenues of the ports of Piraeus and Patras .
Numerous areas, mostly inhabited by Greek people, wanted to break away from the Ottoman Empire. Failure by Greece to intervene would have meant a bloodbath among the rebels. Since Greece could not hope for the involvement of other powers, it took out loans to finance an intervention. In 1885, loans for armaments were 52 million gold francs. Criticism of the opposition was thrown off by Prime Minister Theodoros Deligiannis with reference to national interests. He resigned in 1886, followed by Dimitrios Valvis and Charilaos Trikoupis , who no longer succeeded in preventing the rise in debt, while at the same time the standard of living fell through cuts until he was voted out of office in 1890. The re-elected Prime Minister Theodoros Deligiannis relied on a strong borrowing, he resigned in 1892. When Charilaos Trikoupis became prime minister again, he was no longer able to service the loans. In December 1893 he declared in a session of the Greek parliament with the historical words "Unfortunately we are bankrupt" ( Greek "δυστυχῶς ἑπτωχεύσαμεν" ) the insolvency. The income from monopolies and tariffs, once agreed as a pledge, were also no longer paid.
Economic causes
The territories liberated from the Ottoman Empire had a greater need for investment than planned, and infrastructure actually had to be created from scratch. For example, in Thessaly (which came to Greece in 1881) the 142 km long Thessalian Railway was built with loans .
Investments in railway lines and road construction did not have the hoped-for effect, however, and at the same time the expenditures in the armaments sector were far higher than planned. The attempt to diversify agriculture and achieve greater independence from the currant export product had not yet borne fruit.
At the end of the 1870s the French vineyards were attacked by downy mildew, and the world market price for currants reached an unusually high level, so that the high income made it easy to service the loans. However, in 1893, France introduced high protective tariffs on currants during a global economic downturn. The French vines had recovered and the French government wanted protectionism to regain the French market share it had lost. The world market price for currants fell to a sixth. Due to the drop in income, the existing loans could no longer be serviced without taking out new loans.
New borrowing for payments to Turkey in 1897
The country had largely recovered from the economic turmoil in the mid-1890s. A Cretan uprising against the Ottoman occupiers led Greece to intervene again in 1896. However, the Ottoman troops had recently been restructured by German military advisors. The insurgents and Greece lost the Turkish-Greek war in 1897 , but were able to prevent the return of their rule on the island by paying enormous reparations to the victorious Turkey. In order to pay for the solution with an international protectorate and an autonomy of Crete of Turkey, Greece had to take out further loans.
However, the creditors only agreed to lend further after the Greek government had promised to repay old debts and agreed to the establishment of international financial control over Greece.
From 1897 to 1900, Greece paid a total of 389 million gold francs to the Ottoman Empire. The Ottoman Empire, which had also been under international (multinational) financial control since 1881, did not directly benefit from the Greek payments, as the credit powers offset these against the debts of the empire.
Until the German invasion in 1941, Greece paid all the agreed interest and repayment installments. According to other sources, in the context of the Great Depression in 1932 there was a partial national bankruptcy after the parliamentary elections in Greece in 1932.
swell
- Korinna Schönhärl: History of a National Bankruptcy. In: FAZ. February 19, 2010, p. 21. (online)
Individual evidence
- ↑ http://www.capital.gr/News.asp?id=942618
- ^ Korinna Schönhärl: History of a state bankruptcy. In: FAZ. February 19, 2010, p. 21. (online)
- ↑ Heinz Richter, Komnenos Sarante Pyromaglou: Greece between revolution and counter-revolution (1936-1946). European Publishing House, Frankfurt a. M. 1973, ISBN 3-434-00193-X , p. 40.