Economic Exploitation and Social Consequences of the Axis Occupation of Greece 1941–1944

by Eleni Stefanaki (Panteion University, Athens)

This essay aims to introduce and emphasise the main issues arising in Greece after the tripartite occupation and especially the German occupation. We will try to focus on the social and economical condition of Greek society. What was the state of society after the occupation by the Third Reich? How did the Greek community react? How did the occupation influence the economy of the country?

After the completion of military operations that culminated in the fall of Crete in May 1941, a tripartite occupation was imposed by Germany, structured in German, Italian and Bulgarian administration zones. The German occupation zone comprised the most strategically important areas: Athens, Thessaloniki, central Macedonia, certain Aegean islands and Crete. The Bulgarian army occupied Eastern Macedonia and Western Thrace, except for land within the Evros prefecture which remained under German control. The Italians occupied all other territories.1 The Italian occupation zone may have been territorially larger, but it was less important economically and strategically. “New Order” was imposed on occupied countries, which meant German political authority, restriction of all freedoms, plundering, and the persecuting and extermination of Jews and other “undesirable” population groups.2

All sectors of the economy in Greece, natural resources and domestic production including custom houses, warehouses, stock-keeping units, commercial and industrial inventories were requisitioned. The German and Bulgarian military used the natural resources and agricultural products of the country for their own subsistence, or even shipped them to the Axis forces in Africa. Moreover, Greece was forced to pay the occupying forces large sums in order to provide for their needs.3

Furthermore, the national currency was devaluated to the point of being practically replaced by gold. In 1941 occupation costs reached 40% of the GDP and one year later 90%. The government, in order to meet these “obligations”, kept printing increasing amounts of money. This practice contributed to the rise of inflation which reached extraordinary heights by the time the country was liberated.4 The Greek economy had collapsed.

In Rome, on 14 March 1942, the Italian-German Financial Summit ended with the signing of the agreement on occupation loans by Gunther Altenburg and Pellegrino Ghigi, representatives of the German and the Italian side, respectively. The agreement was announced to the interested party, Greece, nine days later. It stated as retroactive effective date January 1, 1942, and according to it the Greek government undertook the obligation to make monthly payments of 1.5 billion drachmas for occupation expenses, equally apportioned between the Italian and the German occupying forces. Expenses included “all expenses pertaining to war waged within the occupied country or to which the latter constitutes a starting-point”.5 This loan was odious, given the unsound economic situation of the country both before and during the war. In 1943, Germany started receiving small amounts while the Greek government still paid its monthly dues.6 “The General Secretary of the Ministry of Finance estimated at that time that the per capita burden was five times larger than France’s… The embezzlement of state funds had tremendous inflationary repercussions.”7

The fall in production as well as income (not only in the case of the poor, but also concerning the middle and upper social strata which lost their deposits to high inflation), unemployment, the disruption of imports, the rise in demand for goods, were all consequences of the aforementioned practices and made the occupation period even harder to bear for the people of Greece.

The first grave consequence of the above was the disruption of food supply for the general population. Pre-war Greece depended on sea routes for supplies, and the situation became dire because of the British naval blockade, imposed for military reasons.8 Since the supply of food and other products by sea route was impossible and the occupying forces had not adopted a supply scheme that would be fair to both their troops and the populace, the issue of nutritional needs remained an unresolved problem until the end of the occupation. The occupying forces, the British and the exiled Greek government blamed each other for the famine.9

The requisition of public and private supplies by the Germans must have been the most important factor behind the famine that broke out during the winter of 1941–42, with a devastating mortality rate.10 The famine continued throughout the whole of the occupation period, affecting different areas at different times.11

The famine was a consequence of the disruption of food supply. Its intensity varied in degrees differing in relation to the local economy of each area, the unequal distribution of aid, difficulties in communications with the rest of the country, and the destruction left behind from the military operations.12 Urban areas and arid islands suffered the most. In Northern Greece the effects of the famine became apparent after the rise of the Resistance movement. The combination of the above factors determined which part of the population suffered the most. In urban centres, unemployed workers were the first to be affected. Employees were better off, but from 1943 onwards, with inflation rising and the food crisis worsening, this group also felt the repercussions of the famine crisis. As for the rest of the country, the main difference on this issue was due to the urban and rural population.

In May 1941, the situation in Athens, Piraeus, Chios and Syros became dire. Under those circumstances, a plea was made to the British and American governments for food supplies to be sent to Greece.13 This initiative did not bear fruit. By December of the same year the famine had reached its peak; there were reports of hundreds of dead bodies lying in the streets of Athens. Food reached the capital city sparingly. Travel routes were monitored, and no one could travel without permit, for which an application had to be submitted days before, and most people could not afford the price of tickets for boats and trains necessary for travelling in search for food.

Soup kitchens were in regular operation by the summer of 1942. For a long time they did not contribute much, since the daily ration provided only one third of the calories needed for human survival. The only aid provided by Britain arrived in the spring of 1942 under the auspices of the Red Cross. Food supplies reached Greece on neutral-country vessels via Turkey. The famine was recorded as one of the worst humanitarian tragedies in Second World War.

The Greek industrial sector suffered under the New Order imposed by the occupying forces. Many factories were closed down or dismantled, and parts of them were transferred to Germany. The rest operated under German control. A typical example was the Shell Company, forced to sell their facilities to the Germans under threats of requisition. In addition to the mines that were closed, all the work that was necessary for their maintenance also came to a halt, causing many of them to be destroyed completely. The Germans took control of most mines and factories such as Lokris Nickelion.14 Thus the German Reich received 616,300 tons of precious metals per year, while the Wehrmacht received more than 2,800,000 cigarettes from eleven major Greek tobacco factories on a daily basis. At the same time, the number of Greek workers in forced labour in Germany reached 16,000 in September 1944 either through requisition or contractual agreements.15 Crete was the first Greek province to experience requisition of labour.

Greek agriculture suffered a major blow. During the occupation, farmers refused to cultivate the land in order to hand over their crop to occupying forces or the puppet collaborationist government, even less so when the monetary reward would lack any real value. Under those circumstances, and given the rising inflation, producers and peddlers preferred to withdraw from markets and reap great profits by re-entering them later.16 Given the failure of the mandatory crop collection scheme, in order to deal with the food supply problem in urban areas, it was suggested in July 1941 that a barter scheme be implemented which involved payments in products whose monopoly was in the hands of Greece, such as soap, olive oil, salt and matches. This effort failed too, since the black market became more organised as time passed.

Black-marketers traded hand to hand, secretly, in coffee-houses, barber-shops, pharmacies, law firms, notary offices and in various spots in big cities. Gradually, the black market, which had started as a desperate effort of the people to secure access to staple foods, transformed into an organised trading scheme managed by few wholesalers, industrialists etc., and brought about enormous change in the social and economic structure of Greek society.17 Food trade somewhat improved as a result of the growing external aid which was already permitted under the auspices of the International Red Cross. Hence, gradually, from April 1942 onwards, Swedish vessels transported Canadian wheat.

Exports were conducted on the basis of offsetting transaction arrangements. The German military command requisitioned all exportable goods which were later bought by German merchant companies at rates dictated by the German occupation authorities. For all that, payments were never made.18

As we mention above, transportation was very difficult, not only because of security measures and expensive fares, but also because of the infrastructure had been destroyed. Sabotage operations carried out by the Resistance as well as the deliberate destruction of infrastructure by withdrawing German forces left the road network of Greece completely in shambles by the end of the war. The railway network suffered the greatest damage. It is indicative that more than thirty bridges were destroyed, a fact that created grave difficulties at the transportation network in the countryside. The list of destroyed bridges includes those on the rivers Brallos, Asopos, Gorgopotamos, Pineios, two bridges on Axios, three on Gallikos, Barabarobasis, Koulouras, and others.19

Road surfaces had been almost completely destroyed by the heavy traffic of the military vehicles that belonged to occupying forces. This is why transportation speed dropped and transportation expenses rose; transportation was brought to a halt. The Corinth Canal also suffered significant damage, as the withdrawing German troops blew it up. Destruction in total: 80% of railway stations, 90% of bridges, 30% of tunnels, 80% of engine rooms, 60% of water supply facilities, 50% of station buildings, 97% of the Piraeus-Athens-Peloponnese Railway (SPAP), 90% of port facilities, 70% of the merchant fleet tonnage, 45% of fishing vessels, 74% of cargo vessels, and 94.5% of passenger ships. In addition, roughly 100 archaeological sites were damaged; 26 excavations were performed, and more than 50 museums or archaeological sites were plundered.

The organised resistance of the Greeks from 1942 onwards came as a natural consequence of the above. Emerging resistance groups aimed first to liberate the country and secondly to establish democracy and a new civil order based on social justice and welfare. The largest group was the National Liberation Front (EAM), the most successful resistance organisation. Just as its creation was announced, scores of people rushed to join it. In the following months EAM was in conflict with the National Republican Greek League (EDES). EDES was a resistance organisation too, but it was directed by the British and with passage of time lost its liberating character. A significant contribution to the resistance was also made by the United Panhellenic Organisation of Youth (EPON), whose members were mainly students.

Greek opposition to the occupation assumed the form of organised strikes. They were joined by employees of the Bank of Greece, administrative services, and hospitals and also unemployed citizens and many young people. In April 1942, the employees of the Athens Telegraph Service went on strike. The strike spread throughout the public sector and lasted until April 22, when the occupation government accepted the various demands of the strikers (salaries, working conditions).20 On September 22, at Korais Square, the offices of the fascist organisation ESPO21 were bombed. On February 27, 1943, the funeral of eminent poet Kostis Palamas took place; it turned into a major demonstration against the occupiers. In March a demonstration was organised by EAM, with a turnout exceeding 7,000 people.22 The largest demonstration in occupied Greece and the large protest in occupied Europe occurred on July 22, 1943. Then the citizens voiced their complaints about the atrocities of the Bulgarian occupation and the economy, and production came to a standstill.23

Finally, effects of the occupation on society should undoubtedly include the loss of human lives. Through investigations carried out in 1943–1944 it was estimated that the number of deaths in the whole of the country rose four or five times between December 1941 and March 1942.24 In addition, executions and decimation of the population in certain villages, as well as those of members of partisan groups, contributed to the rise in death rates.

October 12, 1944 was a day of celebration. People flooded the streets celebrating the survival of Nazi atrocities. The Greek resistance had completely achieved its goals. But, on the other hand, on the very day when the occupation ended, plans devised by the Allies and the political parties threw first the capital of Greece and then the whole country into the turmoil of civil strife. The new reality, coupled with financial ruin, a ravaged economy, and social structures constructed during the pre-war period destroyed, thus left Greece suffering even after liberation. A separate chapter in history had begun, though inextricably linked with the occupation and its consequences.


  1.  Violeta Chionidou, Λιμός και θάνατος στην κατοχική Ελλάδα 1941-1944 (Famine and death in occupied Greece), Estia publications, Athens 2011, pp. 28-29.
  2.  On Hitler’s ideology see Ian Kershaw, Ο Χίτλερ, οι Γερμανοί και η Τελική Λύση (Hitler, the Germans and the final solution), Pataki publications, Athens 2011.
  3.  Martin Seckendorf, Η Ελλάδα κάτω από τον αγκυλωτό σταυρό (Greece under the iron cross), Synchroni Epochi publications, Athens 1991, p. 23. (in Greek)
  4.  Chionidou op. cit., p. 67, and N. Maravegias, “How black-marketeers dominated during the occupation”, To Vima newspaper, 24/10/1999 (in Greek).
  5.  “The occupation cost”, Military Press, 1940-1944, issue 49 (in Greek).
  6. Ibid.
  7.  Stavros Thomadakis, “Black market, inflation and violence in the occupied Greece economy”, in I. Iatrides (ed.), Η Ελλάδα στη δεκαετία 1940-1950. Ένα έθνος σε κρίση (Greece in the 1940-1950s. A nation in crisis), Themelio publications, Athens 1984, pp. 117-144.
  8.  Christos Chatziosif, “The Greek economy: battlefield of resistance” in idem, Ιστορία της Ελλάδας του 20ού αιώνα (History of Greece in the 20th century), vol. 2, Vivliorama publications, Athens 2007, p. 196.
  9.  Chatziosif, op. cit., pp. 190, 228-229.
  10.  Chatziosif, op. cit., pp. 219-218.
  11.  Chionidou, op. cit., pp. 19-20.
  12.  Chionidou, op. cit., pp. 48-50.
  13.  Chionidou, op. cit., pp. 32-33.
  14.  Anonymous Mining Company „the Lokris“, one of the first Greek mineral extraction industries, Blog 22/11/2015 and Mark Mazower, Στην Ελλάδα του Χίτλερ. Η εμπειρία της Κατοχής (Hitler’s Greece. The experience of occupation), Alexandreia publications, Athens 1994, p. 51.
  15.  Seckendorf, op. cit., pp. 28-29; Chatziosif, op. cit., p. 189.
  16.  Chatziosif, op. cit., p. 52.
  17.  Thomadakis, op. cit., p. 131.
  18.  Gabriella Ekmektsoglou, “The Greek economy during the German occupation” in History of the Greek nation, vol. 6.
  19.  P. Kourkoumelis, “The restoration of the road and railway network”, Antaios, 1946.
  20., accessed on 22/11/2015.
  21.  National Socialist Organisation: National Socialist and fascist organisation created by collaborators during the tripartite occupation. Wikipedia (in Greek), accessed on 20/11/2015.
  22.  Mazower, op. cit., pp. 138-141.
  23., accessed on 22/11/2015.
  24.  Maria Kavala, “Hunger and survival. Coping with privation in occupied Greece”, in Vasilis Panayiotopoulos (ed.), Ιστορία του Νέου Ελληνισμού 1770-2000: Η Οθωμανική κυριαρχία, 1770-1821 (History of modern Hellenism, 1770-2000: Ottoman rule 1770-1821), vol. 8, Ellinika Grammata, Athens 2003, pp. 51-52.