Reports of a new Entente loan to Greece

The British chronology of the war records under 20 July 1916, or 7 July by the Julian calendar used in Greece, that the Greek government concluded a new loan with the Entente powers for £800,000 sterling, and refers back to the loan of November 1915. At the exchange rate of the time this was about 20 million francs. In the studies and documents examined, however, among them the British official history of operations in Macedonia, the debates of the House of Commons and the documents of Greek diplomacy published after the war, it has not been possible to find any trace of such an agreement. What is certain, on the other hand, is that in the summer of 1916 relations between Athens and Paris and London clearly improved, and that Greece urgently needed money.

An empty treasury

Since September 1915 Greece had kept 24 classes of reservists under arms, and their upkeep was swallowing the state’s revenue. On top of this came crowds of refugees from Turkey, Bulgaria and Serbia, high prices and unemployment, while customs duties and other receipts were dwindling, because the Allies were restricting Greek trade ever more tightly. The government of Stefanos Skouloudis looked for money wherever it could. At the turn of 1915 and 1916 it secretly negotiated a credit of 40 million marks in Berlin, and in April 1916 the Germans opened another for the same sum. The Entente was less generous. When Athens asked for an advance of 150 million francs, the French prime minister, Aristide Briand, declared at the beginning of April that after the Greek refusal to let the Serbian army pass through the country’s territory it was out of the question. Skouloudis replied that Greece had not asked for money in return for violating its neutrality, but because its military and financial exhaustion could not be a matter of indifference to the Allies.

A new government, new relations

The change came in June. Under the pressure of the blockade, Athens accepted the note of the protecting powers, and the government was taken over by Alexandros Zaimis, who was regarded as a friend of the Entente. Georgios Rallis became minister of finance. The Allies suspended the blockade, and the new government ordered demobilisation, which in time was also to reduce the treasury’s expenditure. Two days before the date in the chronology, on 18 July, the Parliamentary Under-Secretary at the Foreign Office, Robert Cecil, refused in the House of Commons to disclose the details of the note and the Greek reply, but declared that relations with the present Greek government were regarded as satisfactory. In line with the Allies’ practice so far of paying out or withholding money depending on the attitude of Athens, financial help for a friendly cabinet would therefore not have been at all surprising.

Where does the sum come from?

The sum in the chronology nevertheless raises doubts. Exactly £800,000, or about 20 million francs, is mentioned earlier in connection with French advances to the government of Eleftherios Venizelos. According to the British yearbook Annual Register, by March 1915 France had paid Greece advances amounting to exactly £800,000. Venizelos himself, in April 1916, recalled in a confidential message to the French foreign ministry that in January 1915 France had given him 20 million, stipulating that he should not count on further help. It is possible, therefore, that in July 1916 the Allies really did grant the Zaimis government an advance of that amount. It cannot be ruled out, however, that the authors of the chronology confused it with the earlier French advance.

The question of money returned at the beginning of September 1916, when the Bulgarians were already occupying eastern Macedonia. Zaimis then sounded out London and Paris on whether the Allies would give Greece the money and equipment needed for a possible entry into the war on their side. Before the matter had ripened his government fell, and Greece sank into the National Schism.