As a Sure Indication of the Disintegration of the State, Tax Revenues in Greece Covered Less Than 6% of Government Spending

Relatively mild in the Protectorate and Slovakia, inflation was a far more serious problem in Belgium, and worse still in Serbia, Croatia and Greece. Hyper-inflation was caused by the government’s inability to raise more than a small fraction of its needs from taxation and the huge increase in the money supply caused by the central bank’s printing of banknotes. By the end of the war, tax revenues in Greece covered less than 6 per cent of government spending, a far smaller proportion than anywhere else, and a sure indication of the disintegration of the state. Gold sovereign prices rose fifteen-fold in the first two years of the occupation and soared again as it neared its end.

Greece stood as a warning of what could happen when occupation economics went badly wrong and when German demands could only be met by printing money. In July 1942 Finance Minister von Krosigk warned Göring that ‘in Greece … a legal market no longer exists, nor a price mechanism which could act as a basis for stabilization and reorganization … If the war drags on, it will be necessary to prevent the countries whose potential we are exploiting, from premature economic ruin.’ A few months later, when the German commissar at the Belgian central bank wrote of dangerous inflationary pressures because of the difficulty of controlling the black market, he highlighted the risk of making ‘a monetary “Greece” out of Belgium’. German administrators did not care too much one way or the other about Greece itself, which they had not really wanted to invade, and whose value to the war effort was minimal, but they knew that the costs for the German war effort of allowing Belgium or France go the same way would be much higher.

—Mark Mazower, Hitler’s Empire: How the Nazis Ruled Europe (New York: Penguin Books, 2009), 272-273.