The cost of military operations was high, if we take into
acount post-war expenses (compensations, pensions etc.),
the burden of which stretched out much further in time than the end of the conflict itself.
The outbreak of the First World War affected Greece directly, even before participation was agreed. The Greek army mobilized as early as 1915, at a considerable
cost to Greek economy.
The National Schism and participation in the war made the cost colossal. These expenses were covered by state income, chiefly, that is, by
taxation, domestic and external loans, while suspensions of payments came into effect
during the wars. Despite these economic debts,
the military victories and the great territorial expansion created
a favourable economic climate. Investments and deposits increased, while
the relative stability of the drachma and balance between internal and foreign trade
were maintained.
On account of the war effort, the poor state of the country's finances
and the general disorganization caused by the
National Schism, the Allies consented to the so-called Allied credits.
Immediately after the end of the war the issue of war indemnities was raised.
As concerns the damages caused by the Allies through their operations in Macedonia,
an almost trivial sum was awarded. Practically speaking, these indemnities
were incorporated in to the obligations of the defeated countries,
mostly Bulgaria, Germany and Austria-Hungary, to the Greek state.
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