ABSTRACT
One common feature of the postwar economies of Southeastern Europe was their industrialization from a low prewar base. This chapter follows the route to the final debt crisis from initial reliance on foreign aid and for the Communist regimes on centrally planned investment from state budgets. Foreign aid had begun by 1945 with Western and Soviet assistance in recovering from the damages and shortages left by the Second World War. American aid to both Yugoslavia and Greece, from the United Nations Relief and Rehabilitation Administration shares forward, would amount to US$3.7 billion over the next 20 years, most of it during the 1950s. The rapid rise of foreign debt, along with deficits in current account despite remittances and tourist income, began from 1976. Foreign aid from the United States also supported economic growth in general in Greece and Yugoslavia. Future financing was then left to privatization and revived stock markets, bank credit, and foreign direct investment.
