The last Venizelos government increased foreign borrowing, in order to materialise its development policy. Between 1928 and 1932 the foreign debt increased from 27,8 billion drachmae to 32,7 billion and the deficit in the balance of trade was a menace to the reconstruction of economy.

In 1932 the servicing of the foreign public debt had reached 20,3 million dollars annually. The servicing of the private foreign debt on the other hand, absorbed 9,7 million dollars. The total sum was equal to 81,08% of the country's exchange returns. That was the highest percentage in the entire central and southeastern Europe. The pressure of foreign loans was permanently expressed as a crisis of available exchange on the one hand and as a crisis in public finance on the other. This double crisis brought about the stoppage of foreign payments and the bankruptcy of 1932.

The year 1932 was also a milestone of change in the economic policy that was in effect since 1922. As the historian Kostas Kostis pointed out, "... the economic policy of the Liberal Party could be summarised as an endeavour of constant borrowing, in order to materialise the major, productive works that would allow the Greek economy -and especially the agricultural sector- to overcome the demographic problem and increase the country's productivity". This policy was revised after 1932 due to circumstances.