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Greece From 1909 to World War II
Sources: The Library of Congress Country Studies; CIA World Factbook
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    Eleutherios Venizelos, who became prime minister in 1910, thoroughly revamped Greece's economic and social institutions, although his modernization programs were interrupted by a series of wars between 1912 and 1922. The 1923 Treaty of Lausanne provided for the exchange of Greek and Turkish minorities, dramatically enlarging Greece's population. The institutional reforms of Venizelos, the new skills brought to Greece by refugees from Asia Minor, and increased domestic demand promoted another period of growth and industrialization. At the same time, refugee resettlement in Macedonia and Thrace introduced more productive agricultural practices (see The Interwar Struggles, 1922-36 , ch. 1).

    The last Venizelos administration (1928-32) was another era of modernization in Greece's economic institutions. Financial reform included establishment of the Agricultural Bank of Greece and the Bank of Greece, which replaced the National Bank as bank of currency issue. These institutional changes aimed mainly at improving resource allocation and national policy making; however, they did not make the benefits of economic growth available to wider segments of the population. Widespread poverty persisted despite growth.

    In 1931 the onset of the Great Depression ended Greece's interwar growth, which had not lasted long enough to bring about a permanent improvement in Greek economic structures. Greece had continued to depend to a large extent on agricultural exports and emigrant remittances for its foreign exchange. The decline of international trade and incomes in the 1930s hurt the Greek economy by reducing its foreign-exchange earnings. A new period of economic stagnation, together with persistent urban poverty, stimulated sharp class conflicts that fostered the growth of Greek communist militancy, widespread labor unrest, and finally the imposition of a fascist dictatorship in 1936.

    The Nazi occupation and plunder of Greece between 1941 and 1944 devastated Greece's economy and suspended the foreign trade and agricultural output on which it depended heavily. The Nazis also forced the Greek treasury to pay huge amounts of "occupation expenses," which caused hyperinflation when new money was printed to meet the obligation. The stratification of wealth caused by hyperinflation and black markets during the occupation seriously hindered postwar economic development.

    Data as of December 1994

    NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece From 1909 to World War II information contained here. All suggestions for corrections of any errors about Greece From 1909 to World War II should be addressed to the Library of Congress and the CIA.

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Revised 10-Nov-04
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