The First Century of the Modern Greek State

The economic history of Greece in the nineteenth and early twentieth centuries was characterized by political turmoil, structural deficiencies in public and fiscal administration, frequent bouts of inflation and a poor record in servicing external debt resulting in bankruptcies and, on one occasion, external involvement in setting fiscal and monetary policy. Throughout, Greece was dependent both politically and financially on the three Great Powers, France, Great Britain and Russia that helped launch its independence and whose help was sought and obtained in the pursuit of national objectives. These objectives were largely achieved, with Greece’s territory and population expanding several times over the first century of its existence. A significant number of Greece’s public sector deficits, bouts of inflation and insolvencies were the result of the repeated wars and armed conflicts in which Greece engaged throughout the first hundred years of its existence against the Ottoman Empire. Others occurred outside war periods and resulted in defaults that were followed by periods of extreme austerity that damaged the economy. As a result, Greece’s per capita income growth was small, perhaps less than 1% per annum over the first hundred years of its existence.