Two Sticks and One Carrot: Public Debt and the International Financial Commission in Greece 1854-1859

Abstract

The present article constitutes a contribution to the monetary and financial history of Greece by introducing to a wider audience the Financial Commission that was established in the late 1850s following the longstanding lack of payment by Greece on its foreign loans. The port of Piraeus was twice blockaded in the 1850s and the removal of the occupying armies was conditional on the establishment of a Financial Commission. The paper is oriented around a neglected primary document of Greek financial history, the final report of the Commission that was appointed between 1857 and 1859 and was composed of the representatives of the governments of Britain, France and Russia. The paper examines how creditors ascertained how much to demand when repayment difficulties arose and created pressure to secure their own policy objectives in the region.