Debt , Financial Crises and International Supervision in Modern Greece: Causes and Consequences
Call for Papers
We plan to organize a workshop and a conference on the causes and consequences of debt and financial crises in modern Greece.
We invite contributions from macroeconomists and economic historians that would help shed more light on the following issues:
The main causes of debt and financial crises in the 19th, the 20th and the 21st centuries. We shall focus on the crises of 1893, 1932 and 2010 and shall concentrate on both domestic and international causes.
The response to the crises, in the form of the imposition of internationally controlled programs of adjustment of fiscal and monetary policy in Greece.
The results of these programs in terms of the ability of the country to service its debt and the resulting output loss (and unemployment).
The time span and the conditions under which Greece eventually returned to international capital markets.
The role of international institutions and the international monetary system.
We plan to hold an initial one day workshop in October/November 2014 and a final conference in the spring of 2015. The proceeds of the final conference will be published in a special volume in English and/or Greek.
Interested researchers are invited to submit proposals for papers by 1 July 2014.Although the main focus is on Greece, we also welcome contributions from scholars working on other countries.
Since the proclamation of independence, the Greek economy has remained closely tied to the global economic system, seeking access to international capital markets. Financial autarky was not a realistic option. Thus, Greece sought to encourage international trade, and develop economic institutions and a monetary system that would be compatible with the requirements of international financial markets.
Already in 1824 and 1825 the first two loans of independence were concluded in London, in order to fund the war of independence. The inability to service these onerous loans after independence stained the credibility of the Greek state in international capital markets for several years, and the only way Greece could secure new loans was through guarantees by the protecting powers, namely, Britain, France and Russia.
Greece adopted the international monetary system of the period from the outset, first a silver standard and then (a form of) bimetallism. It concluded new international loans and later founded the National Bank of Greece, along the lines of the Bank of England. It promoted exports, mainly of agricultural products, so that it could finance the necessary imports.
After the default of 1893 and the defeat in the war of 1897 with Turkey, the stewardship of the Greek fiscal, monetary and financial system was transferred to its foreign creditors, through an International Financial Audit Committee (The IFC) which forced Greece to adjust its fiscal policy and pursue a policy of appreciation of the drachma, as a prerequisite for admission to the gold standard.
When in 1910 the drachma became part of the international gold standard, the best days of this international monetary system were already behind it. The system collapsed with the outbreak of World War I, but Greece, with the help of currency restrictions, maintained the semblance of the gold exchange standard until 1919.
With the escalation of the Asia Minor campaign it became impossible to remain in the gold exchange standard. Foreign creditors refused to provide new loans and the option of monetary financing and forced loans from the public was the only one available.
After a long period of monetary and political instability, foreign creditors –this time in collaboration with the League of Nations-once again forced Greece to adjusted its economic policies and seek participation in the interwar international gold-exchange standard. They linked this obligation with the establishment in 1928 of an independent central bank, the Bank of Greece. This did not stop Greece from defaulting again in 1932.
The final episode is the debt crisis of 2010 and the default of 2011, in the form of the PSI. Greece was again forced -under a novel type of supervision- to adjust its economic policy, and has since experienced the deepest and longest recession in its post World War II history.
Ioanna Sapfo Pepelasis
Associate Professor of Economic History
Department of Economics
Athens University of Economics and Business
+30-210-8203-336 Email: email@example.com
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