German loan for Bulgaria
- Category:
- Diplomacy
- Date:
- 3 February 1915
- Author:
- Łukasz Skowroń
- Tags:
- Bulgaria, Germany, economy, neutrality
The British chronology of the war records under 3 February 1915 that the government of Bulgaria had negotiated a loan of 3 million pounds sterling in Germany, or about 75 million francs. This was not, however, the first German money for Sofia. Sources disagree as to whether it was a new loan or an advance or further tranche of the large credit that Bulgaria had taken out in Germany just before the outbreak of war. Some works mention the payment of an instalment of 150 million from that credit.
The loan of July 1914
Bulgaria had emerged from the Second Balkan War defeated and in debt. The government of Prime Minister Vasil Radoslavov also sought money in France, but the talks with Paris came to nothing. In July 1914 the loan was granted by a consortium of German banks led by the Berlin Disconto-Gesellschaft. It amounted to 500 million gold leva (the lev was then equal to the franc), paid out in two series of 250 million, for 50 years at 5 per cent. The terms were harsh. The German consortium received the right to build a port at Porto Lagos on the Aegean and a railway leading to it, and to take over the state coal mines at Pernik and Bobov Dol. Ratification in the National Assembly took place in mid-July amid scandal, with shouting and brawls by the opposition, and its legality was questioned for a long time afterwards.
Money and politics
Bulgaria declared neutrality, but its government and Tsar Ferdinand I leaned towards the Central Powers from the start. Both sides courted Sofia. The Entente promised gains in Thrace and “just” acquisitions in Macedonia, but Serbia and Greece did not want to give the Bulgarians what they wanted most. Germany, meanwhile, could offer something more tangible: money, which the empty Bulgarian treasury desperately lacked. Berlin hoped that paying out further sums from the July loan would allow it to influence Sofia’s policy. The Western press of the time even wrote that Germany had made payment conditional on a promise that Bulgaria would attack Romania if Romania attacked Austria-Hungary. We have not been able to confirm this rumour.
The echo in Athens
The news of the loan made the greatest impression in Greece. Less than two weeks earlier the Prime Minister, Eleftherios Venizelos, had proposed to the King that Bulgaria’s participation in the war on the Entente side be bought at the cost of ceding Kavala to it. Now he concluded that Bulgaria had already bound itself to the Central Powers, and gave up hope of reviving the Balkan League. The Entente governments, after a moment of alarm, nevertheless still believed that Sofia could be bought with a better offer, and continued talks with it for several more months.
German money did not immediately decide Bulgaria’s choice. Radoslavov negotiated with both sides until the summer of 1915. In the end, in September 1915, Bulgaria concluded an alliance with Germany and Austria-Hungary, and in October it attacked Serbia.
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(04)The same battle, people or subject.
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