Greek Bankruptcy of 1893

In 1893, the Greek government, led by Prime Minister Charilaos Trikoupis, declared that it could no longer pay the interest on its foreign debt. Trikoupis was a modernizer who had borrowed heavily from foreign lenders to build roads, railways, ports and other infrastructure, and to strengthen the army and navy. In the early 1890s, however, the price of currants, Greece's main export, collapsed after French vineyards recovered from a disease that had boosted demand for Greek produce. At the same time, much of the government's income went to paying debts. When Greece could not obtain new loans, Trikoupis told parliament, with the famous words that are still quoted in Greece today, Unfortunately, we are bankrupt. The default damaged Greece's reputation with foreign creditors and contributed to Trikoupis's political downfall. Four years later, after Greece's defeat in the war of 1897, an International Financial Commission was set up by the great powers to supervise part of Greece's finances and make sure foreign lenders were repaid. The episode was often recalled during Greece's debt crisis more than a century later.