A depiction of Greece being loaded with British debt The Greek Revolution (1821-1829) was not only born in fire and blood, but also in debt. From its first steps, the rebellious Greece was faced with an insurmountable reality: without money, no revolution can survive. Weapons, supplies, salaries, administration, fleet; everything required cash. And so, almost simultaneously with the national awakening, borrowing was born - a burden that would accompany the modern Greek state from its birth to the present day.
The two large independence loans (1824 and 1825), totaling 2.8 million pounds, were presented as life-saving. In practice, however, they were one of the darkest pages of Greece's economic and political history. Their terms were onerous, the intermediaries numerous, the commissions devastating, and the management – at best – chaotic, at worst scandalous.
Of the second loan of 2 million pounds, signed in London in 1825, only a tiny fraction finally reached Greece. After deductions, amortizations, commissions from bankers and “philhellenes,” dubious ship purchases, and the salaries of foreign officers, the actual amount that benefited the independence struggle was almost symbolic. And yet, the total debt remained intact - and a heavy mortgage on the future of the then new state.
The case of Alexandros Kontostavlos, a banker and politician involved in both loans and in shipbuilding, is emblematic of the attitude of that era. During the reign of King Otto, he was accused of corruption in his ship procurement dealings for the Greek state and was ordered to return the then very substantial sum of 174,000 drachmas. In the end, he never returned anything and was never effectively punished. On the contrary, after Otto was forced to abdicate and flee Greece, he was eventually exonerated and then assumed key government positions, served as Minister of Finance and President of the Parliament, dying rich and distinguished. The message was clear even then: collusion is not only not punished, but is rewarded.
The contribution of some “philhellenes” was equally disappointing. Admiral Thomas Cochrane, with a serious history of stock market fraud, collected tens of thousands of pounds, assumed command of the fleet, carried out adventurous operations with heavy losses and finally left Greece secretly, leaving behind damaged ships and dead men. Despite all this, his name still adorns the streets of Greek cities.
The same pattern is repeated with bankers, military advisors, committees, and mediators. Money intended for the Greek Revolution ended up in private pockets, while the revolutionaries continued to fight almost barefoot. The result? Greece was born with a debt that exceeded 120% of its then GDP - a figure that would seem tragically familiar to Greeks two centuries later.
Many historians, as early as the early 20th century, such as Andreas Andreadis, characterized these loans as essentially illegal: unfair terms, absence of real state sovereignty, extortionate exploitation of a country that was struggling to exist. And yet, the Great Powers never accepted any substantial restructuring or cancellation. Debt became a tool of control.
Since then, history has repeated itself with different protagonists but with the same scenario: loans under King Otto, bankruptcy under Prime Minister Trikoupis, dependencies in the interwar period, post-war borrowing, and during the last debt crisis of 2009-2019 memoranda of understanding, troikas and “institutions.” Greece rarely borrowed to develop; more often it borrowed to survive - and often to pay off earlier loans.
The tragic irony is that the real losers were never the lenders or the middlemen. They were the people. As Bertolt Brecht would say, the hungry man who grabs a bite is stigmatized, while the satiated thief goes unscathed. And so, from its birth, Greece learned to live on loans, but also with deep, structural injustice.
Understanding this history is not just an exercise in memory. It is a necessary condition for one day breaking the vicious cycle. For a state that was born in debt will hardly become truly free if it does not look its debts in the face - not only economic, but also political and moral.
The two large independence loans (1824 and 1825), totaling 2.8 million pounds, were presented as life-saving. In practice, however, they were one of the darkest pages of Greece's economic and political history. Their terms were onerous, the intermediaries numerous, the commissions devastating, and the management – at best – chaotic, at worst scandalous.
Of the second loan of 2 million pounds, signed in London in 1825, only a tiny fraction finally reached Greece. After deductions, amortizations, commissions from bankers and “philhellenes,” dubious ship purchases, and the salaries of foreign officers, the actual amount that benefited the independence struggle was almost symbolic. And yet, the total debt remained intact - and a heavy mortgage on the future of the then new state.
The case of Alexandros Kontostavlos, a banker and politician involved in both loans and in shipbuilding, is emblematic of the attitude of that era. During the reign of King Otto, he was accused of corruption in his ship procurement dealings for the Greek state and was ordered to return the then very substantial sum of 174,000 drachmas. In the end, he never returned anything and was never effectively punished. On the contrary, after Otto was forced to abdicate and flee Greece, he was eventually exonerated and then assumed key government positions, served as Minister of Finance and President of the Parliament, dying rich and distinguished. The message was clear even then: collusion is not only not punished, but is rewarded.
The contribution of some “philhellenes” was equally disappointing. Admiral Thomas Cochrane, with a serious history of stock market fraud, collected tens of thousands of pounds, assumed command of the fleet, carried out adventurous operations with heavy losses and finally left Greece secretly, leaving behind damaged ships and dead men. Despite all this, his name still adorns the streets of Greek cities.
The same pattern is repeated with bankers, military advisors, committees, and mediators. Money intended for the Greek Revolution ended up in private pockets, while the revolutionaries continued to fight almost barefoot. The result? Greece was born with a debt that exceeded 120% of its then GDP - a figure that would seem tragically familiar to Greeks two centuries later.
Many historians, as early as the early 20th century, such as Andreas Andreadis, characterized these loans as essentially illegal: unfair terms, absence of real state sovereignty, extortionate exploitation of a country that was struggling to exist. And yet, the Great Powers never accepted any substantial restructuring or cancellation. Debt became a tool of control.
Since then, history has repeated itself with different protagonists but with the same scenario: loans under King Otto, bankruptcy under Prime Minister Trikoupis, dependencies in the interwar period, post-war borrowing, and during the last debt crisis of 2009-2019 memoranda of understanding, troikas and “institutions.” Greece rarely borrowed to develop; more often it borrowed to survive - and often to pay off earlier loans.
The tragic irony is that the real losers were never the lenders or the middlemen. They were the people. As Bertolt Brecht would say, the hungry man who grabs a bite is stigmatized, while the satiated thief goes unscathed. And so, from its birth, Greece learned to live on loans, but also with deep, structural injustice.
Understanding this history is not just an exercise in memory. It is a necessary condition for one day breaking the vicious cycle. For a state that was born in debt will hardly become truly free if it does not look its debts in the face - not only economic, but also political and moral.
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