ABSTRACT
It is interesting to consider the early British reaction to Metaxas’s dictatorship as this is reflected mainly in the dispatches of Sydney Waterlow, the British Ambassador in Athens, in 1936–37. The ambassador was reporting mainly on what he referred to as the ‘Metaxas reform’, or the Social–Economic ‘New Deal’ under Metaxas. One notes here the apparent initial success of Metaxas in impressing foreign diplomats in Greece with the reformist thrust of his regime, as this could be detected in his new legislation. Thus Waterlow reports about new laws in the New Year (January 1937), barely six months after Metaxas’s assumption of dictatorial powers, to burden the state budget with an annual charge of 500 million drachmas for poor relief over and above funds already reported ‘as having been allocated to social assistance’; the money to be raised by supplements to postal and telegraph charges, to stamp duties, tobacco duty, playing cards and lotteries. The government argued that the structure of the taxation system was not being changed; the new law simply credited the budget of the Ministry of Public Assistance (of which the Department of Health was an Undersecretariat) with the proceeds of these supplementary charges up to a total of 500 million drachmas. Thus Metaxas’s promise, Waterlow concludes, ‘to finance his New Deal without fresh taxation has not been broken’. 1 There were those, however, who argued that the new charges were a form of indirect tax, but the retort of Metaxas to these critics was that it was a levy on human weakness, viz., smoking and gambling, and announced a Budget surplus for fiscal 1935–36 despite a bad harvest. Waterlow did report the fierce opposition of the Bank of Greece to these measures, ‘which taken in conjunction with the rearmament programme and the country’s inevitably heavy commitments for the importation of cereals from abroad, must impose a severe strain on the stability of the currency,’ suggesting that Metaxas’s New Deal was incompatible with sound finance. He also observed that contrary to the recommendation of the Financial Commission of the League of Nations, Metaxas was raising public expenditure instead of reducing his State Budget, leading to unease among foreign creditors and disagreement among his government ministers as to the best way of raising money for the New Deal. 2 Those who believed it ought to be extracted from the rich endangered Metaxas’s political position, further aspirations and objectives. On this point Waterlow remarks that Metaxas was ‘not … actuated merely by demagogic motives’. Developing an overweening confidence in his powers as an administrator, ‘he sincerely believed (without, in my opinion, much justification) that he can reform and inspire the public services to such a degree that they will be able to spend large sums to the enduring benefit of those whom, in conversation with me, he now calls “my people” – or the poor – his new constituency? And it must be admitted that much has been done to help the poorer classes.’
