International financial control in Greece 1898–1978

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As International Financial Control ( Greek Διεθνής Οικονομικός Έλεγχος Δ.Ο.Ε. Diethnis Ikonomikos elenchos DOE ), the activities of the International Finance Commission is Greece indicated that lasted 1898-1978.

Historical background

The history of Greece's external debt

During the struggle for independence from the Ottoman Empire, Greece took out loans abroad for the first time in 1824/25. Since 1826 these debts could no longer be serviced in the middle of the war. With the establishment of the Greek nation-state in 1830, the guarantee powers England, France and Russia then took over the guarantee for a further loan in the amount of 60 million francs, which the Rothschild bank issued in three installments until 1839. When Greece was no longer able to service its foreign debts from 1843, it was blocked from new loans on the European stock exchanges.

It was not until 1878, in the context of the Berlin Congress, that an agreement was reached with the creditors of the old debts. That is why Greece could now raise money abroad again. In the years 1879-1891, a total of seven foreign bonds were issued with a total volume of approximately 630 million francs. The money was used for infrastructure projects, e.g. B. the railway construction, but also used for the reform of the military and debt service.

The bankruptcy of 1893

Due to the global economic crisis from 1891, the deterioration in the exchange rate of the drachma and the collapse of the raisin price on the world market, Prime Minister Charilaos Trikoupis had to admit the insolvency in 1893 . The amortization was discontinued, the interest payments reduced to 30% of the agreed interest. An agreement with the foreign creditors was initially unsuccessful.

After the defeat in the Greco-Turkish War in 1897, Greece had to pay reparations to the Ottoman Empire in order to achieve the evacuation of occupied Thessaly. For this purpose it was urgently dependent on a further foreign loan. The great powers assumed the guarantee, the terms of which were negotiated in Athens from October 1897 to January 1898. A loan of 151.3 million gold francs was agreed . As a result of this loan, in addition to the reparations to be paid to the Ottoman Empire totaling 93.9 million francs, the existing debts of 31.4 million francs and the Greek budget deficit for 1897 of 22.5 million francs as well as the Costs for issuing the loan (fees, broker, etc.) of CHF 3.5 million are covered. In return, Greece had to accept the establishment of an international financial control to ensure the servicing of its old and new debts.

International Finance Commission

In order to guarantee the repayment of the debts and to monitor the Greek payment behavior, the income from the state monopolies for tobacco, salt, matches and cigarette paper, from port duties and the stamp duty were withdrawn from the Greek government's order and placed under the control of the International Finance Commission. The confiscation was carried out by a Greek management company under their control. The old and new foreign debts were serviced from the income.

The commission consisted of diplomatic representatives from Great Britain , France , Germany , Austria-Hungary , Russia and Italy . After the First World War, Great Britain, France and Italy remained in the Commission.

The commissioners had diplomatic status . They had extensive control powers, in particular the right to have all books, invoices etc. presented to them and to visit the collection agencies and institutions whose income was pledged. However, the commissioners had no formal rights to influence Greek politics: They could only propose reforms of the financial administration, but not force the Greeks to do so.

In 1928, high inflation led to disagreements between the Commission and the Greek government about the conversion and the amount of the annual amounts to be paid. An international court of arbitration ruled in favor of Greece with regard to the conversion, but increased the annuities by 20% due to inflation.

Financial control had a stabilizing effect on Greek public finances in the first decade. However, the Greek state mainly financed its military armament and military ventures to enlarge its national territory in the First World War and then in the Greco-Turkish War 1919-1922 . When this ended with the disaster of the Asia Minor catastrophe , Greece was overwhelmed by accepting over a million refugees. Under the direction of the League of Nations , another bond with a volume of £ 12.3 million was issued, with debt servicing also being placed under international financial control.

Up until the 1930s, 35% of the Greek government's revenue went into debt servicing in this way. The invasion of the German Wehrmacht in 1941 initially ended the work of financial control. After the Second World War it was of little importance. However, it existed until 1978 when the Commission's Athens office closed.

literature

Individual evidence

  1. ↑ Chatziioannou, Maria Christina: War, Crisis and Sovereign Loans: The Greek War of Independence and British Economic Expansion in the 1820s . In: The Historical Review / La Revue Historique . tape 10 , 2013, p. 33-55 ( ekt.gr ).
  2. ↑ Levandis, John Alexander: The Greek Foreign Debt and the Great Powers 1821-1898, New York 1944, pp. 29–54.
  3. ↑ Schönhärl, Korinna: Financiers in rooms of longing. European banks and Greece in the 19th century, Göttingen 2017, pp. 214–225.
  4. ^ Schönhärl, Korinna: Fighting the Financial Crisis in Greece: The Privileged Company to Protect Production and Trade in Currants (1905) as International Bank Cooperation . In: The Historical Review / La Revue Historique . tape 10 , 2013, p. 107-134 ( ekt.gr ).
  5. ↑ Ali Coçkun Tunçer: Sovereign Debt and International Financial Control The Middle East and the Balkans, from 1,870 to 1,914 . 2015, p. 100-122 .
  6. ↑ a b Financial Control . In: Meyers Großes Konversations-Lexikon . 6th edition. Volume 6, Bibliographisches Institut, Leipzig / Vienna 1906, pp.  570–571 .
  7. ^ Helmut Coing : National Debt Administration, International . In: Hans-Jürgen Schlochauer (Ed.): Dictionary of international law . Second edition. Verlag Berlin 1962, ISBN 3-11-001032-1 , Volume 3, p. 340, books.google.de
  8. ^ A b Susanne-Sophia Spiliotis: Tran-territoriality and national demarcation; Constitutional processes in Greek society and approaches to its fascist transformation, 1922 / 24-1941 . P. 64, books.google.de
  9. ↑ Michael Cox: Empires, systems and states: great transformations in international politics . Cambridge 2001, p. 28, books.google.de
  10. ↑ Schönhärl, Korinna: Bis repetita non placent. Greek financial control in the 19th century and today . In: ibf paper series . 2017 ( ibf-frankfurt.de [PDF]). Until repetita non placent. Greek financial control in the 19th century and in the present ( Memento of the original from December 1, 2017 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / www.ibf-frankfurt.de
  11. ↑ Michael Waibel: Sovereign Defaults Before International Courts and Tribunals . Cambridge 2011, p. 44, books.google.de
  12. ↑ Olga Christodoulaki, Jeremy Penzer: Bonds on the London Stock Exchange, 1914-1929 . (PDF; 910 kB)
  13. ↑ Protocol relating to the settlement of refugees in Greece of September 29, 1923 (PDF; 25 kB)
  14. ↑ Diplomatic correspondence between the Greek and French government  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (PDF)@1@ 2Template: Dead Link / www.doc.diplomatie.fr  
  15. ↑ Giannis Siatras: Διεθνής Οικονομικός Έλεγχος: 112 χρόνια από την (προηγούμενη) επιβολή του! In: eurocapital.gr