Greek economy, 1923-1940

For the student of Greek history, the inter-war period is considered the one that coincided with the beginning of modern economic development. It is the result of a process which began several decades earlier. It is characterized by the quick pace of industrialization, an increase in the numbers of potential workers and the reorganization of the middle classes. The national debt soared to dramatic levels after the Catastrophe as the result of external borrowing. At this time revenues came mainly from the limited export of agricultural products, the profits from shipping and from immigration.
Until the first decades of the 20th century, the public sector remained antiquated in its structure, agricultural processes were carried out using only primitive methods, while the traditional export trade (raisins and tobacco) was slack. Essentially, the crisis in traditional structures began in 1922-23 with the refugees issue, but the internatioanl economic crisis of 1929 acted as a catalyst. The disintegration of the international economic system had a multiple impact on Greece, diverting the course of the country's development from its traditional route.

The new socio-economic imperative, implemented as a result of the state interventionism that began in the mid 1920s, was based on the creation of a local market. Political self-sufficiency was considered an essential pre-requisite for it, both by the government of Venizelos and its successors. The pace of industrial development picked up after 1922 with the arrival of a huge new labour force, while the total economic activity of the country - with the exception of the period 1929-32 - followed a positive course until the eve of the Second World War (1939).