What Recent Greek History Reveals About the Debt Crisis (2024)

Greece is the cradle of European civilization, but is it even in Europe?

The answer might seem obvious: The country is on the European landmass, of course, and it’s part of the European Union—for now at least. But the question has been fraught, and the answers have been unstable, contingent, and hedged since before the advent of the modern Greek state in the 19^th century. The ongoing negotiations that may ultimately decide Greece’s EU membership are just the latest attempt to find an answer.

If you look at old maps of Europe, the Balkan Peninsula is included, but it’s labeled as Turkey. That’s because there was no independent Greece from the time of the Roman conquest of the country until the 1820s; some parts of modern-day Greece were under Ottoman control into the 20^th century. Greek-speaking Ottoman subjects anchored their identity to religion and the Orthodox church, rather than to national identity, and thought of themselves more as Roman than as Hellenic, Molly Greene, a professor of history and Hellenic studies at Princeton, told me. Their cultural center would have been not now-dusty Athens but cosmopolitan Constantinople.

To the north and west, however, European thinkers were fascinated with classicism and had begun to venerate the example of Greek antiquity, while also developing the new concept of nationalism. Greek-speakers who traveled to and lived in Europe—merchants and students—began absorbing these ideas. Philhellenes helped foster a movement toward Greek independence, resulting in the 1820s revolution that ultimately freed Greece from Ottoman rule. Some Western Europeans, most notably the English poet Lord Byron, went off to fight for the cause.

The revolution worked, culminating in international recognition of a new Greek state in 1832. It also successfully planted Hellenism as the nation’s foundational myth, reorienting Greek speakers toward a national identity centered on the glory of antiquity.

Almost immediately, problems began to emerge.

“[Europeans] had these exalted ideas—‘We’re going to run into Agamemnon and Pericles’—and they were disappointed by the Greeks,” Greene said. “There’s Europe and then there’s Europe, and this wasn’t the right Europe.”

That translated into the actual Greeks being cut out of their own government. There would be no immediate reprise of Athenian democracy. With nascent independent Greece in chaos, European powers gathered in London and installed a king—Otto, a Bavarian prince transplanted—and set limitations on the Greek military.

“Across the Balkans, but particularly in Greece, which staggers under the burden of never being able to live up to Ancient Greece, [there is a] dual relationship with Europe,” Greene said. “The Great Powers were instrumental in helping to secure independence for Greece from the Ottoman Empire, and at the same time turned around and made it clear [Greece was] not going to be a European state on the same level.”

The history of Greek national default is inextricably tied to this troubled relationship with Europe. As some commentators have noted, the country has been in default for roughly half of its existence as an independent state. The pattern is more complicated than just a repeated failure to pay debts. It’s a recurring vicious cycle of foolish lending by European creditors and profligate mismanagement by Greeks going back nearly 200 years. The country’s first default came during the course of the independence struggle, when rebels couldn’t pay back European loans made to fight the war. The Great Powers made more loans in 1832 when King Otto was installed; in 1843, a coup forced him to submit to constitutional limits, and Greece defaulted again.

During the Crimean War of the 1850s, the Greeks sought to ally with the Russians, seeing in them a more stable ally than Britain and France (in a historical parallel to overtures from Athens to Moscow over the last few weeks). The gamble failed and Western European navies occupied Greek ports. Greene, who is currently teaching a course in Thessaloniki, said she’s seen Crimean War-era cartoons circulating on social media recently, featuring Britain leading Greece around by the ear.

In the late 1870s, Greece paid off its sovereign debt and once again had access to foreign markets. It promptly overborrowed and defaulted again in 1893. In response—this will sound familiar—foreign creditors created an “International Committee for Greek Debt Management” to force reforms and oversee Greek debt. (Greece’s most recent default before June 2015 came in 1932, amid the international Great Depression.)

The relationship between Greek borrowers and European lenders might seem like an obviously toxic symbiosis, but each side has found an attractive alternative culprit in the Ottoman Empire. Greek textbooks assign hefty blame to the hated Turks for stifling Greek nationalism and education, a claim that is both anachronistic—nationalism is a relatively recent invention—and untrue, according to Ottoman experts I spoke to. “If the Ottomans did this to them and it’s so bad, why haven’t they overturned it since they got independent?” said Carter Findley, distinguished professor of history emeritus at Ohio State. “They’ve had 185 years to fix their problems, and they haven’t done it.”

Many reporters, for example, have repeated a claim that tax-shirking was a patriotic gesture in Ottoman Greece, a way to resist Istanbul’s authority. It is true that an inability to effectively enforce tax laws has drained the Greek government of revenue, but Ottoman historians also looked skeptically on the claim. The later Ottoman government relied on tax farming: A would-be local tax collector would pay an upfront fee to the sultan in return for the rights to collect taxes in an area. Such a system might encourage rapacity in taxation, and that might create an ingrained resistance to taxes, but it’s tough to lay that at the sultan’s feet.

One barrier to more effective taxation is that Greece has no land registry. Jean-Claude Juncker, the president of the European Commission, has blamed this on the Ottomans as well, but other Ottoman territories did have land registries; in fact, the old central registry building still stands in central Istanbul.

This sort of Ottoman-bashing serves a double purpose for Western Europe: It both displaces blame from Europe’s role in Greece’s default and rhetorically nudges Greece toward the periphery of Europe, as if Greece’s history as part of the Islamic East undermines the country’s claim on full membership in the European community. This is not a new trope, nor has the United States been immune from writing off the people of the Balkan region of which Greece is a part as creatures of emotion rather than reason, probably not fit to run their own affairs. In a 1993 New York Review of Books essay, George Kennan, the grand old man of American diplomacy, wrote that little had changed between the Balkan Wars of the early 1910s and the present, and that “no particular country or group of countries” could subdue the Balkan region’s “excited peoples” or “hold them in order until they can calm down and begin to look at their problems in a more orderly way.”

One can see the persistence of stereotypes about Greece in the debate today. Many Greeks protest that they are unfairly portrayed as lazy and greedy, particularly in the German media, where Greek demands for debt relief have been met with derision. (French economist Thomas Piketty has cheekily pointed out that Germany’s position is hypocritical, since it has been a major beneficiary of international debt relief.) Past Pew surveys of Europeans have found that while almost all Europeans believe that the Germans are the hardest-working and least-corrupt nation in the EU, a majority think the Greeks are the laziest, which is the sort of impression that—true or not—might prejudice European negotiators in discussion with Greece. Germans sometimes protest that the Greeks share the same stereotypes, but the same Pew numbers show Greeks think they’re the hardest-working. (To their credit, they recognize that they are dangerously corrupt.)

European Stereotypes

In light of this history, Greene viewed this past weekend’s referendum, in which Greek voters overwhelmingly rejected a bailout package from European creditors, partly as an expression of Greek voters’ anxieties about their place in Europe.

“The people who voted yes are very invested in the idea of staying in Europe,”
she said. “There’s long been a feeling in Greece that, ‘We missed the boat, we came under Muslim rule, this prevented us from being European. We’ve finally been accepted into the European club and we must stay in Europe.’”

But more than 60 percent of voters expressed some of the same resentment against overweening Western European hegemons that their ancestors did in 1832, and 1843, and 1854. “For the people who voted no, it was, once again, we’re being pushed around by other European countries as though we’re not a part of Europe.”