Not Just Another Recession
Why the Global Economy May Never Be the Same
THE last three years have witnessed the signature of a series of agreements between Greece and the other states of the Near East. As Mr. Venizelos has said, "the signature of the Græco-Rumanian pact of March 21, 1928, inaugurated the conclusion by Greece of a series of treaties of friendship and arbitration with her other neighbors."[i] There followed the pacts of friendship with Italy, Jugoslavia, Czechoslovakia, Poland, Austria, Hungary, the United States, Spain and -- most important of all -- Turkey, which the Greek Minister of Foreign Affairs, Mr. Michalakopoulos, declared to "surpass, in point of contents, even the historic pact of Locarno." Thus Greece has achieved the difficult task of being in friendly relations with members of opposing groups of states -- with Italy, Hungary and Turkey on the one hand, and with Jugoslavia and Czechoslovakia on the other. Her position may be described as that of a friend of both combinations, a satellite of neither. Similarly Bismarck, while making his country the ally of Austria-Hungary and Italy, took care to conclude a treaty of insurance with Russia, the ally of France. That Athens should be simultaneously on friendly terms with Rome and Belgrade is a triumph of diplomacy; that Athens should warmly embrace Angora is a miracle, worthy of the centenary of Greek emancipation.
The ground had been carefully prepared beforehand for the visit of Messrs. Venizelos and Michalakopoulos to the Turkish capital. At the first Balkan Conference, held in Athens last October, the Turkish delegation made an excellent impression on all observers; and on the occasion of the inauguration of the Greek centenary the Turkish Minister, for the first time in history, attended the official service on Independence Day. On June 11, 1930, an agreement was signed at Angora, settling the questions which had arisen out of the Lausanne Convention for the Exchange of Populations, and which had embittered the relations between the two countries since 1923. By this agreement Turkey recognized as "established" at Constantinople all the Greeks resident there, "whatever the date of their arrival," and Greece similarly recognized as "established" all the Moslems resident in Western Thrace -- the respective Turkish and Greek territories exempted from the compulsory exchange arranged at Lausanne. Both governments abandoned all claims for the value of the properties formerly belonging to the "exchangeables," as anything like an accurate valuation of them had been found impracticable; but the Greek Government agreed to pay £440,000 to the Moslems not liable to be exchanged as compensation for their properties which had been requisitioned for the use of the Greek refugees. Defending this settlement, Mr. Venizelos said in the Chamber on June 17: "Our historical struggle with Turkey, which has lasted for so many centuries, must be considered as definitely terminated. The two countries sincerely accept their present frontiers. They cherish no ambitions of territorial aggrandizement and devote themselves to their internal reconstruction." Ismet Pasha made a similar declaration in the Turkish Assembly.
Thus there was no obstacle to Mr. Venizelos's visit to Angora, whence he returned (as he told the present writer) with the consciousness of having "accomplished a great work," a work, as he added, which was "the first result of the Balkan Conference." The treaty of neutrality, conciliation and arbitration, the convention of commerce and navigation, and the protocol on the parity of naval armaments annexed to the first-named document should make October 30, 1930, a red-letter day in Græco-Turkish history. The two contracting parties pledged themselves "to enter into no political or economic combination directed against either of them," to submit eventual disputes between them to arbitration, to grant to one another commercial facilities, and "to order, acquire, or construct no naval unit without six months' previous notice to the other party." By these acts Greece and Turkey have furnished an example to some bigger and more advanced nations, accustomed to look upon the Balkans as "the cockpit" or "powder-magazine" of Europe.
On the base of a monument at Budapest there is engraved an apothegm of the Italian Premier that "peace treaties are not eternal." No one supposes that they are; nevertheless the causes of friction between Greece and Turkey, which produced the wars of 1897, 1912-13 and 1917-22, have disappeared with the disappearance of the Greeks from Asia Minor and of the Turks from Macedonia and Crete, and with the substitution of the Turkish Republic for the Ottoman Empire. Broadly considered, Greece is now Greek and Turkey is now Turkish, and both countries have much more to gain by the intensive cultivation of their present territories than by the extension of them at the cost of bloodshed. As has been proved by the Refugee Settlement Commission, whose labors terminated at the end of 1930 with the return of Mr. Charles Eddy to America and of Sir John Hope Simpson to England, the exodus of the Greek refugees from Turkey has made Macedonia a "promised land," capable in time of supplying Greece with grain. Just as Bismarck, after 1871, declared that he would "wage no more wars," but devote himself to internal problems, so the former Cretan insurgent and joint author of the Balkan League against Turkey has set himself in this, his fifth Premiership, the task of reorganizing Greece.
The position of Greece as both a Mediterranean and a Balkan state renders it imperative for her to be, if possible, on good terms with both Italy and Jugoslavia. The Jugoslav frontier near Ghevgheli is only 48 miles from Saloniki, and Jugoslavia is a large and well-armed country. Unfortunately, the previous alliance was formally denounced in 1924 on the occasion of the Bulgarian Minorities' protocol, and the arrangement concluded in 1926 was unpopular in Greece and was never ratified by the Greek Chamber. In 1929, however, Mr. Venizelos and his Minister of Foreign Affairs, Mr. Karapanos, succeeded in making fresh arrangements with their neighbor to the north. Mr. Karapanos on March 17 signed with his Jugoslav colleague at Geneva six protocols, respecting the "Serbian Free Zone" in the port of Saloniki, created in 1923, which provides Jugoslavia with an outlet on the Ægean. One protocol stipulated that the zone should be utilized only for Jugoslav trade, that as it was "an integral part of Greek territory" the Jugoslav flag should not be hoisted there, and that the total number of officials employed there should "not exceed 100." Ten days later, Mr. Karapanos signed at Belgrade a pact of friendship with Jugoslavia, which was ratified by the Greek Chamber on April 4, after a speech by Mr. Venizelos, in which he stated that Græco-Jugoslav relations had "been thereby restored to the cordial position occupied by them before the denunciation of the treaty in 1924." The basis of these relations, he added, was "the recognized principle that Greece should grant to Jugoslavia every possible facility for the free transit of her commerce through the port of Saloniki and Greek territory, while Jugoslavia should renounce all pretensions touching Greek sovereignty or even Greek susceptibility." These measures were not directed against anyone, he stated, but were designed in the interest of Balkan and European peace. Since then Mr. Venizelos has twice visited Belgrade, and Mr. Marinkovitch, the Foreign Minister of Jugoslavia, has visited Athens. Greek business men have been the guests of their Jugoslav colleagues at Belgrade and Bled, and in turn have acted as hosts at Saloniki and Athens. Traffic in the Serbian Free Zone was tripled in 1930.
Some uneasiness, unduly magnified in the press, was caused at Belgrade by the fact (a mere coincidence, as Mr. Michalakopoulos informed the writer) that Count Bethlen, the Hungarian Premier, happened to be at Angora during the Greek visit, and that he and Mr. Venizelos met. The admitted fact that Premier Mussolini had acted as an intermediary between Greece and Turkey (he had signed a treaty of neutrality with Turkey on May 30, 1928) led commentators to suggest, without real justification, that Greece was about to join Italy's protégé, Hungary, in the encirclement of Jugoslavia.
At Belgrade people are apt to see the hand of Italy everywhere -- in Albania, in Bulgaria, in Hungary and in Turkey. Italy is regarded there much in the same light as was Austria-Hungary before the war. One result was the Franco-Jugoslav Treaty of Alliance (November 11, 1927), to which the Italo-Albanian treaty eleven days later may be described as a reply. The execution of several Slovenes last September for blowing up an Italian newspaper office at Trieste created considerable feeling at Belgrade, where it was thought prudent to guard the Italian Legation against possible reprisals. The suggestion that the Vatican should replace the Slovene clergy of Istria by Italians naturally caused further resentment, and incidents continue to occur frequently on the Italo-Jugoslav frontier. This unsatisfactory condition of affairs has made all the more remarkable Mr. Venizelos's achievement of being the friend of King Alexander (of whom he has a high opinion) without being regarded with suspicion by the Italians.
There is a Greek proverb that "one should kiss the hand which one cannot bite." Mr. Venizelos, who is a realist in politics, realized that however much the Greeks might resent the Italian annexation of the Dodecanese and the bombardment of Corfu, Greece was not in a position to "bite" her great western neighbor, and must therefore enter into amicable official relations with her; for nothing is more futile than a policy of pinpricks. Soon after taking office he visited Premier Mussolini, and on September 23, 1928, he signed in Rome a treaty of friendship, arbitration and judicial settlement with Italy. No allusion was made to the Dodecanese, and Mr. Venizelos afterwards declared that no Dodecanesian question existed between the two countries, just as no Cypriote question existed between Greece and Great Britain. This statement caused some dissatisfaction among the Dodecanesians in Athens, but represents the official policy of the Greek Government. When, in 1930, a bust of Xanthos, a prominent member of the famous "Friendly Society" of 1814 and a native of Patmos, was erected by Dr. Skevos Zervos, the well-known Dodecanesian leader, in the "Square of the Friendly Society" at Athens, and the names of not only Patmos but others of "the twelve islands" were inscribed on the monument, they were deleted, and by a delightful Byzantine refinement the noun Patmos was prohibited, but the adjective Patmios permitted. A single iota had saved the Italo-Greek protocol! In January 1929, Signor Grandi, on his way back from Angora, returned Mr. Venizelos's visit on behalf of Signor Mussolini. The Greek Premier again visited Signor Mussolini in Rome in January 1931 on the way home from his journey to Belgrade, Warsaw and Vienna, thus carefully dividing his attentions between members of the two rival groups. Italy, on her part, never loses an opportunity of making herself agreeable to Greece. Italian ships hastened to Corinth after the earthquake of 1928, and when congratulations or condolences have to be offered to the Greek Foreign Office, the Italian Minister is always the first to arrive there. Signor Mussolini is not of the opinion of the French cynic that diplomatists do least harm when they are doing nothing.
The Græco-Rumanian pact of non-aggression and arbitration has much less importance than the treaties with Turkey, Jugoslavia and Italy, because the Kutzo Vlach question, so prominent in Macedonia at the beginning of the century, no longer exists. Wisely, too, the Rumanian Government has abstained from adopting an unfriendly policy towards republican Greece because the ex-Queen of the Hellenes is a sister of the King of Rumania.
Mr. Venizelos told the writer that, having "made friendly agreements" with the above-mentioned states, he "wanted now to do the same with Bulgaria and Albania." With regard to Bulgaria the question is somewhat difficult. The Treaty of Neuilly secured to Bulgaria a commercial outlet on the Ægean, and the Thracian treaty of 1920 stipulated that this outlet should be at Dedeagach. During the negotiations which produced the Treaty of Lausanne the Allied Powers invited Bulgaria to accept this solution and construct a port near Dedeagach. But Bulgaria declined, whereupon the Greek Government made a fresh proposal: to construct a normal-gauge line down the Struma valley from the present Bulgarian railway terminus at Petritch to Demi Hisar, so as to link up Bulgaria with Saloniki, where Bulgarian trade would be allowed to use the Free Zone, formed in 1925, just as Jugoslav trade uses the similar Serbian Free Zone. This offer was not made conditional upon the abandonment of Bulgaria of her right to a commercial outlet at Dedeagach, and Mr. Venizelos stated at Vienna in January that, "if Bulgaria ever decides to demand the enforcement of the clause of the Thracian treaty relating thereto, she will find the Greek Government ready to coöperate in its execution." As regards the question of minorities, that concerns Jugoslavia rather than Greece, because since the voluntary exchange of populations under the convention of Neuilly the Bulgarians in Greece number only 5.1 percent, and that chiefly around Florina. About 80,000 Bulgarians took advantage of that convention to emigrate from Greece to Bulgaria, whither some 15,000 had preceded them during the Balkan Wars of 1912-13. If this remaining minority have no special schools, the Greek Government contends that they have never asked for them but are content to send their children to be educated with the Greeks.
There remain the financial questions which have long awaited settlement by either direct negotiations between the Greek and Bulgarian governments or by arbitration. As soon as these are out of the way, Mr. Venizelos is ready "to sign a pact of amity and arbitration on a very large scale with Bulgaria and to conclude a new commercial convention with her." The British Secretary for Foreign Affairs, Mr. Henderson, in a letter to both his Greek and Bulgarian colleagues suggested that the Hague Tribunal be asked to pass upon the Greek claims for the damage done to Greek property at Anchialos in 1906 (when the persecuted Greeks emigrated from Bulgaria and founded a New Anchialos in Thessaly), as well as upon the claims of the Bulgarian emigrants from Greece (whose statements were submitted at a time when their presentation was overdue). He further advised that the question of the indemnities should be submitted to the special arbitration provided by the Hague agreement of 1930, and that all the other questions should be referred to the arbitration of the neutral members of the Mixed Græco-Bulgarian Commission, completed by the addition of a jurist. The Greek Government, with the approval of all the political leaders, republican and royalist, has accepted the British suggestions, which is all the more satisfactory when it is remembered what hard treatment was meted out to Greece by the League of Nations at the time of the Græco-Bulgarian frontier incident of 1925. But since then there has grown up on both sides a greater desire to minimize differences.
No great obstacle prevents the conclusion of a treaty of friendship with Albania. The only recent difficulty was ecclesiastical -- the expulsion from Albania of the Greek Metropolitan of Korytsa (the representative of the Œumenical Patriarch) on March 2, 1929, and the constitution of an Albanian Orthodox Synod. Against this act both the Œecumenical Patriarch and the Archbishop of Athens protested. But this question has died down, and at the meeting of the Council of the Balkan Conference at Saloniki at the end of January the Greek delegates showed their sympathies with the sufferers of the severe Albanian earthquake. The large strain of Albanian blood in Greece makes it easier for these two races to understand one another, and while few Greeks speak Serb or Bulgarian, many, and those not the least distinguished, can speak Albanian.
If we can accept these indications, then, Greece is well-disposed to all her neighbors. Mr. Venizelos said to the writer that he wished Greece to be the support of peace in the Near East, and he added: "I think the greatest obstacle in the way of Balkan Union is the tension existing between Bulgaria and Jugoslavia." Greece has nothing to gain by war, everything to gain by peace. The intensive development of the territory which she has acquired since 1913, the making of roads, the drainage of the Struma and Vardar valleys, and the sewerage of Athens form a less romantic but more practical program than the mirage of Byzantium or Asia Minor. But Jugoslavia and Bulgaria have more serious grounds for dispute than have Greece and Bulgaria. Serbian Macedonia contains a larger number of Bulgarians than does Greek Macedonia, and the Bulgarians complain loudly of the Jugoslav administration there. On the other hand, the repeated attempts made by Bulgarian komitadjis upon the railway which unites Greece with "Europe" (always upon Jugoslav territory), the assassination of General Kovatchevitch at Shtip and of the legal adviser of the Governor of Skoplje, and the bomb explosions at Pirot, Kriva Palanka and Strumica have enfuriated Belgrade and made its relations with Sofia very difficult.
In these disputes between Jugoslavia and Bulgaria, as in those between Bulgaria and Greece, the British and French Governments have amicably intervened at both Sofia and Belgrade; but Italy was conspicuously absent. Belgrade considers her to be the supporter of Bulgaria (just as Italy regards France as the champion of Jugoslavia), and the marriage of King Boris with Princess Giovanna has, of course, given further ground for the feeling. Surrounded as Jugoslavia is by a chain of states which either, like Italy, contain Jugoslav minorities, or like Bulgaria, Albania and Hungary are interested in their kinsmen living in her territory, her obvious policy is to conciliate some if she cannot conciliate all. It is also the interests of the civilized world that she should do so, for no one wants a second Sarajevo.
At the Balkan Conference in Athens an Albanian delegate remarked that, if the Balkans had been the powder-magazine of Europe, the Great Powers had provided the powder. When the war eliminated Austria-Hungary and Russia from the Balkan peninsula, it was hoped that it would now belong exclusively to the Balkan peoples. But such has not been the case. If no Great Power possesses Balkan territory, as Austria-Hungary once held Bosnia and the Herzegovina, Italy and France both intervene in Balkan questions, and have (with the exception of Greece and Rumania) practically divided up the peninsula into Italian and French spheres of influence. Regardless of the experience of their predecessors, which showed that whatever foreign state interferes in the Balkans will in the end be sure to burn its fingers, they each have their pet Balkan states, pampered and encouraged not so much for their own good as in the supposed interest of their respective backers. The danger of an explosion is not decreased by the natural jealousy between "the two Latin sisters" and by the fact that one of them after the war incorporated within its frontiers a very considerable Jugoslav minority, while the other regards the high military qualities of the Jugoslavs as a valuable asset in the event of a domestic row in the Latin family.
Happily for her, Greece stands aloof from the embarrassing and compromising patronage of any Great Power or group of Powers. But, as mistress of Saloniki, in which the Serbian Free Zone is situated, she would be placed in a difficult position by a war between Italy and Jugoslavia, when it might be to the interest of the latter to try to import war material through the Free Zone and over the Greek railway into Jugoslav territory. But, as Mr. Kaphandares remarked during the debate upon the proposed Græco-Bulgarian arbitration on February 10, the amicable intervention of Great Britain therein, supported also by France and Italy, is a hopeful sign that the Great Powers, who "not long ago were only occupied in developing spheres of influence over the small Powers, are now exerting their moral force to promote closer coöperation rather than division." This new tendency is not confined to the Great Powers; for Greece on a smaller scale has shown not merely theoretically but practically that she wishes to make her contribution to the pacification of the Near East -- a region which, in this respect, has lately given a lesson of civilization to some more civilized parts of the world.
[i]Messager d'Athènes, April 17, 1930. Other quotations in the text are for the most part taken from the same newspaper.