Report on Greece"s war debt to England.

In order to arrive at a proposal of such a solution the Treasury firstly base themselves on our population. Such a basis, according to which, our population being 6,300,000 and Italy's 42,000,000, the wealth of Greece or rather her national income and therefore her paying capacity is in respect to Italy as 2 - 13, is quite unfounded as is apparent at first sight. That this contention is unfounded becomes even more apparent when it is remembered that on this basis we shall be made to pay much more than what we should have had to pay if we had come out of the war victorious, on account of the fact that through our defeat our population increased by 1,500,000 refugees. In the second place His Majesty's Treasury take into account the budgets of Greece and Italy in order to find out the respective paying capacity of the two countries. (Revenue of the Italian budget for 1925- 1926 £169,000,000, (Lire 20,500,000,000) and of the Greek budget £19,261,000 (Dr 6,100,000,000 ) Proportion 2.17) This basis is unsound and leads to wrong conclusions. Because owing to our defeat we were compelled to intensify the taxation of the country to the utmost limit and we will therefore pay for our war debt more, in proportion than if we had emerged from the war victorious and had not been made, to press our effort of taxation to the very uttermost point. But even in case the basis put forward by His Majesty's Treasury were to be taken into account again the result would not be such as the Treasury maintain. Indeed when speaking in similar cases of the pay- ing capacity of a country one means the capacity of this country to export abroad annually, from the surplus of its -12-