The economic policy of the 4th of August regime

Metaxas The economic policy of the 4th of August regime

In the texts of the dictatorship of the Fourth of August, and particuliarly in the speeches of Ioannis Metaxas, basic elements of economic perception of the Regime can be traced. The fundamental unifying element in this speculation was the demand for a state-directed economy. Influenced by the model of the “corporation theory” (corporatism), in neighbouring Italy, Metaxas introduced popularist practices and measures, while at the same time he continued to guarantee the role of the -strong in Greece- trade capital. The views though of the dictatorship were characterized by fragmentariness and realism. Apart from the clear condemnation of Capitalism and Communism, the belief in a stable policy, and the absolute priority of the role of state will versus individual benefit, no integrated theory was formulated in its five-year term of office.

The dictatorship attempted to ease off the tension due to accumulated economic problems without any actual success though. In the sector of agriculture delays in paying off interests due to debts emerged, support prices were established for certain agricultural products, while full title deeds were given to refugee farmers for the land they were cultivating. At the same time, in 1938, a ministry of Cooperatives was established, that was organizing the new political model of centralized and directed from above organization of agricultural employment in Greece.

In the sector of paid employment the institution of union contracts, work by rotation, the restriction of the right to dismiss employees, the creation of new closed professions and other measures of a character “benefecial to the people” were instituted, aiming at the restriction of popular pressure and the strike mobilizations against the Regime.

The attitude of the dictatorship in the sensitive field of industry was characterized by the same limitless practicality that had characterized all its practices. The basic criterion in their adoption was not the need to map out a long-term industrial policy but the application of a paternalistic policy following the Fascist models of other European countries.

Greek economy in the period 1936-1940

The establishment of the dictatorial Regime of the Fourth of August and the ensuing change in the form of constitution did not bring about any innovations as concerns the managing of the country’s finance. The policy of the previous period (1932-36) was not questioned and was taken up with certain alterations. Special care was taken by the Regime in the field of agriculture, especially on the matter of production increase with the expansion of credit relations. On the other hand, the economic and political oppression at the expense of working people and producers became more intense, through various forms of financial control and social supression. It is characteristic that in a time where industrial production increased by 179% and the overall economic activity reached 138%, wages increased evidently less.

In the framework of the effort of the dictatorship to exercise a policy beneficial to the people -essentially paternalistic-, the activation of the law concerning “social security” (establishment of IKA-Social Securities Institute), voted in 1934, must be attributed. The sector of agriculture was reinforced with the imposition of security prices on main agricultural products and with the promotion of intensive cultivation. From existing data it is concluded that the dictatorship made the most of its authority to achieve in the first three years a significant increase in the national revenue and the decrease of unemployement as well. Last, it must be noted that a significant part of the national revenue was used for the purpose of armament, preparing defensively the country for the looming Fascist threat.