Chapter 277 Greece Faces Fiscal Deficit
"Your Highness, what do you think our government should do?" Venizelos said.
Since Crown Prince Constantine came to talk to him personally about this matter, he naturally had some plans.
"My opinion is that your government can focus on the agricultural field in the near future," Constantine directly stated his purpose.
"Including the increase in grain import tariffs as you mentioned, a package of policies will be implemented to support the agricultural development of Greece, and strive to achieve breakthrough development in Greek agriculture within one to two years, especially in staple crops."
Greece now consumes about 860,000 tons of wheat per year, of which only 120,000 tons can be produced in Greece, and the rest is solved through imports.
Originally, Greece had a small population and the food it needed was not conspicuous in the international grain market.
But now Greece's population is growing rapidly every year, and as a result, the tonnage of wheat imported each year has also increased sharply, which not only causes a large amount of currency outflow every year, but also increases the risk.
Now, the population of Greece, stimulated by the government's policy of encouraging childbirth, is expected to exceed 10 million in the next few years according to the population growth rate.
Now that the war in Greece is over, after disarmament, Greek society will soon usher in a baby boom.
In this case, for a country with a medium population, the import of major grains is inappropriate.
Venizelos frowned and said: "The way to quickly increase the production of staple food is to directly provide agricultural subsidies to farmers who grow staple food. This will have the most significant effect."
"It's just that the current financial situation of the government, Your Highness the Crown Prince, you also know that it is powerless. The government has no funds, and many tasks are restricted."
Hearing Prime Minister Venizelos mention the issue of funds again, Constantine also felt a headache.
If it weren't for the excessive pressure on the government's fiscal revenue, there would be no need for such a big move on the issue of disarmament in Greece.
In fact, in the Balkans, the military expenditure of each country is not less than half of its fiscal revenue!
Bulgaria has a population of more than four million and maintains a standing army of 500,000 all year round. Judging from this ratio, Bulgaria is completely worthy of its title of "Prussia of the Balkans".
This does not only mean that Bulgarian soldiers are hardworking and resolute, and that officers are smart, capable, brave and good at fighting.
In fact, it also points out the characteristics of Bulgaria's militarism in maintaining its army. Like Prussia, it is not a country that owns an army, but an army that owns a country.
In other words, Bulgaria's fiscal revenue is almost all used to maintain the army!
With a country like Bulgaria as a neighbor, who dares to be cautious?
Therefore, as neighbors, in a defensive mentality, Greece and Serbia actually also spend most of their fiscal revenue on military expenditures.
Just like Serbia, with a population of less than four million, it also supports a standing army of 200,000 people all year round. How good can its financial situation be?
It is said that the big countries in Europe are engaged in an arms race all year round, but in fact, small countries in Europe have no chance to relax.
It is not only the big countries that are under heavy pressure of military expenditure. Small Balkan countries like Serbia, Greece and Bulgaria are also not relaxed. They are also engaged in an arms race.
However, the arms race in the Balkans is not as high-end as that between the European powers. The naval arms race between Britain and Germany, dreadnoughts, battlecruisers and super-dreadnoughts are being built in full swing.
The Balkan countries have a short period of independence (Greece was the first Balkan country to become independent in 1821, and other Balkan countries basically became independent in the late 19th century), and their economic development is backward. The arms race between countries is relatively primitive: crazy military expansion.
Just like the Bulgarian army.
You should know that in 1912, the Greek government's fiscal revenue was only 1.2 billion drachmas; in 1913, due to the impact of the war, fiscal revenue growth slowed down to only 1.3 billion drachmas;
In 1914, Greece began to digest the war dividend, which naturally stimulated economic development. The Ministry of Finance optimistically estimated that revenue may exceed the 1.8 billion drachma mark.
However, military expenditure was 470 million drachmas in 1912; when the war broke out in 1913, military expenditure reached 1.6 billion drachmas; it is estimated that in 1914, this figure will fall back to 800 million drachmas.
Even so, compulsory military service was adopted, otherwise, the military expenditure figure would have to increase by 20 to 30 percent on this basis.
Now that the General Staff has reduced its military forces, the Greek army will still adopt the old style, that is, the basic combat unit of the army, the division, is divided into a lean division and a full division.
The Greek army organization imitates the German system, and each full division has a number of up to 17,000 people.
The number of lean divisions will be reduced to 7,000 or 8,000 people.
Each of the six main divisions has more than 17,000 people, and the military expenditure of each division is as high as more than 30 million drachmas;
In contrast, each of the elite divisions has 7,000 to 8,000 people, and the military expenditure of each division is 18 million drachmas;
The main reason why the new divisions are cheaper is that the soldiers are required to serve in the military, so they do not need to be paid, and their weapons and equipment are not as good as those of the main divisions, which greatly saves expenses!
It's just that the main force is too expensive, Greece can't afford it! Constantine had no choice but to choose to raise enough officers!
According to the current number of Bulgarian army officers and the basic number of 200,000 troops, once the war breaks out, Greece will start a general mobilization. Within two weeks, the Greek army can expand the number of troops by two to three times at any time.
"Now that the war is over, without the huge expenditure of the war, your government can also let go and boldly raise funds." Constantine heard Venizelos mention the problem of financial difficulties again, and said in an encouraging tone.
"Just like the method of issuing treasury bonds, enough funds can be raised in a short time. Now that there is this demonstration, people will be motivated to buy government-issued treasury bonds after realizing the investment function of treasury bonds."
The current fiscal policy of the Greek government is still very conservative. Its attitude towards debt is no different from that of ordinary people. They always want to replace debts as soon as possible.
Unlike later generations, as long as the interest on government debt can be replaced in time, some countries even directly regard borrowing new debt to repay old debt as the main source of fiscal revenue.
"Perhaps the government can be more proactive in dealing with debt issues in terms of finance and regard government debt as a normal situation"
Seeing Venizelos's surprised face, it is obvious that he cannot accept such a positive fiscal policy in his heart.
"Of course, this is also a temporary financial measure to ease the government's fiscal pressure. The government still needs to focus on increasing fiscal revenue." Venizelos nodded thoughtfully, intending that if the government funds are really difficult to cope with in a short period of time, it is not impossible to continue to issue some national debts.
"Bulgaria has transferred the first compensation, 80 million drachmas, to the government's account," Venizelos said.
"In addition, after this war, the government has a lot of land to sell, and the Greek people are still very enthusiastic about buying land. There are also a lot of minerals in Macedonia. Mining rights can be sold to companies in Greece, and it should be possible to raise money in a short time."
Before the outbreak of the Second Balkan War, the financially tight Greek government had already been thinking about Macedonia's land and minerals.
It was just that at that time, people in Greece were in panic. Everyone knew that Greece would soon go to war with Bulgaria to determine the ownership of Macedonia. With the risk of war, naturally not many Greeks really dared to take the risk to buy at that time.
After all, if the Greek army was defeated, the land and property purchased in Macedonia would be wasted.
Now if you want to buy land and minerals in Macedonia, the price is not the same as before.
Now that Greece has won the war and obtained the ownership of Macedonia and Western Thrace, there is no risk at all.
The Balkans have always been the main gold producing area in Europe, and mining can be traced back to prehistoric and ancient times.
Constantine could not remember how much gold reserves Greece had, but it was still exporting gold to China until the 21st century.
Until the end of the 19th century, Greece's economic level was backward in history. In order to make up for the increasing foreign trade deficit year by year, Greece's gold has been in a state of outflow.
The Greek government, which is short of money, has now set its sights on gold mines. It should be noted that after the previous evaluation by mining experts, it was believed that Macedonia and Western Thrace included a lot of minerals, but due to the rush of time, there was no time for large-scale investigation.
Greece is naturally not lacking in gold mining technology. Greek mining companies have been operating in gold mines in Congo for several years.
Oh, the mining industry in this era did not have much technical content. Internal combustion engines were not yet popular, and there were not many machines available. Most of them relied on manpower.
Mining is not a good job. It is labor-intensive and dangerous.
Constantine estimated that the Ottoman Empire did not mine on a large scale before, and there were not enough workers. This was also a reason!
After all, mining is a high-risk job. Bulgaria has a limited population, and few people will recruit miners to do it!
"We will organize people immediately to conduct a large-scale exploration! The five gold mines that are currently being mined were not large-scale before, and there were less than a thousand miners! Our initial plan is to focus on auctioning some mines with simple mining first," said Venizelos.
Ferdinand nodded, and he approved of Venizelos's plan.
Auctioning from easy to difficult is undoubtedly in line with reality, and it also meets the Greek government's goal of raising funds in the short term; recruiting all miners from outsiders can save labor costs to the maximum extent, and mining is a high-risk job, and casualties are inevitable.
The population of Greece is limited, and the life of every citizen is precious!
"Go ahead and do it. I will let the Intelligence Department of the General Staff provide you with convenience. They have a lot of information about the distribution of gold products in Macedonia and Thrace. I hope it can help the government auction those minerals as soon as possible and smoothly," Constantine said seriously.
"Even so, the government will still face a deficit in the short term?" Constantine said uncertainly.
Sighing, Venizelos responded: "Although the war is over now, the impact of the war is still there in a short period of time. Moreover, the government also has a lot of work to deal with, such as the transportation construction problem in Macedonia. Your Highness just now You mentioned the food subsidy issue, the subsidy issue after the army is downsized, the interest on the national debt, the population and childbirth subsidy, the newly annexed Macedonian region, and the school and church issues there also need to be rectified, which is also an expense."
Since the Berlin Conference in 1878, the Balkan countries have set their sights on parts of the European territories of the Ottoman Empire.
The Austro-Hungarian Empire took the lead in acquiring Bosnia and Herzegovina. In order to gain an advantage in the competition for Macedonia, Greece, Bulgaria, and Serbia all extended their tentacles into the Macedonian region, and the governments of the three countries were all aggressive there. Expand your own schools and churches to expand your country's influence in Macedonia.
In this regard, Greece is at the forefront of the other two countries due to its economic advantages.
Since the end of the 19th century, ten percent of the Greek government's fiscal revenue has been used to carry out infiltration work in Macedonia.
In 1886, 309 schools were established in Macedonia.
By 1897, the number of schools built with Greek support had increased to 871.
By the end of 1900, Serbia and Bulgaria each had only more than 200 schools, leaving them far behind the Greeks.
At the same time, Greece, Bulgaria and Serbia all fought fiercely for control of the founding of schools and churches.
This kind of church school is usually organized by the consuls of the three countries and accepts their supervision!
Now that the ownership of Macedonia has been settled and is in the hands of Greece, it is natural that Greece will clean up this mess in Macedonia.
"If circumstances permit, I think the Greek government needs to borrow money from the UK to maintain the precarious financial problem," Venizelos said cautiously, looking at Crown Prince Constantine.
"With the glorious victory in the Balkan War, the Greek government's international credit strength has been raised to a new level. If it doesn't work, we can ask the British government to come forward to guarantee it!
The government's funding gap may be a pressure on the city for Greece, but for those capitalists in London, England, it is a drop in the bucket. "
After thinking for a while, Constantine said without a doubt: "In this case, the Ministry of Finance can contact the banks of various countries to discuss the borrowing conditions. The funding gap this time is too large. Let's see what kind of conditions can be achieved! "