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| 1897This is an interesting year that had slipped by me so far. The year in which the Greeks lost a war, gained Crete, lost financial control to an international commission, and increased their resolve to conquer all areas with Greek ethnics. QUOTE The Greek economy of the late nineteenth century had to face serious problems. The modernizing policy of Harilaos Trikoupis and chiefly the major works he had constructed
(railways, the canal at Isthmus of Corinth and so on) had built up a large external public debt that the state could not meet. The bankruptcy of 1893 was a fatal consequence. This terrible plight dramatically burdened the international financial state of the country. The defeat in the 1897 war led to the same result. Greece was compelled to pay war indemnities to Turkey, which put forward immediate payment as a condition for the withdrawal of its troops from Thessaly.
In order to pay this sum (4,000,000 Turkish liras or 95,000,000 golden francs of the time) the Greek state had to raise foreign loans, but world capital markets were not willing to supply new loans, if old credits were not settled. Given Greece's immediate economic needs, foreign creditors and the Great Powers were able to impose on Greece a mechanism of financial control, in order to ensure the payment of the capital and the interest on old and new loans.
From April 1898 the International Financial Control Commission (IFCC) was established in Athens; it was initially termed International Control Commission, but despite the change of name it was known as 'Control'. The commission consisted of six members, representatives of the Great Powers whereas revenues from the monopoly of salt, oil, matches, decks, cigarette paper, tobacco, paper stamps and the tariffs of the port of Piraeus passed under its control. These and other revenues, if the need arose, were disposed of to serve the country's loan obligations, while the Commission had the capacity to intervene in various sectors of the civil services in order to ensure the sufficient and, in time, payment of economic obligations to creditors.
It is worth mentioning that in that same period similar situtations emerged in other Balkan countries, the eastern Mediterranean, and even South America but with looser terms, as control has not been imposed after an international treaty and following the terms of a military defeat Still, in the 1930s, 35% of state revenues were siphoned off to foreign banks. Meanwhile, debts as a percentage of gdp remained the same. The commission continued to have a significant impact on the Greek budget until 1941, when the German tanks rolled in. The office regained a marginal role after the war until 1978, when its office in Athens closed.
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