Nazi occupation of Greece

[bigjarofwasps]

1941

February

Secret transportation of the Bank's gold reserves to its branch in Herakleion, aboard the destroyers "Vasilissa Olga" and "Vasilefs Georgios".

22 April

King George II, the Prime Minister Emm. Tsouderos, and the Governor and Deputy Governor of the Bank of Greece, ?. Varvaressos and G. Mantzavinos respectively, flee Athens heading for Crete.

27 April

The Germans occupy Athens.

May

Amendment of the Bank's Statute, stipulating that the Bank will be considered as based at the headquarters of the official Greek Government abroad.

23 May

The fall of Crete marks the country's total occupation by German, Italian and Bulgarian troops. Each of the three occupation forces circulates its own currency unit: the Reichsmark, the Mediterranean Drachma and the Bulgarian Lev. Adventurous efforts to transport the gold reserves to a safe country. Flight of the country's leaders to Alexandria.

June

Relocation of the Bank's Administration and gold to Cairo.

July - August

The gold is transported to Pretoria.

1 August

Reinstatement of the drachma as legal tender.

19 September

The Governments of Italy and Germany appoint commissioners at the Bank empowered with the exclusive right to conduct the monetary and exchange rate policies. Requisitions, appropriations of the national product and mandatory offer to the occupation forces for purchase in inflationary money.

22 September

The Bank's Administration and the Greek Government arrive in London.

November

Starvation of the civilian population. The situation is aggravated further during the winter of 1941-42. The daily death toll from starvation exceeds 100.

December

Advances amount to 3.5 billion drachmas per month. Uncontrollable inflationary pressures. On the initiative of the British Government, an ad hoc inter-alliance committee is set up, to record war damages and post-war needs. Greece is represented by K. Varvaressos.

1942

January

Occupation expenses amount to 6-7 billion drachmas per month.

June

Occupation expenses rise to 200 billion drachmas per month.

July

A German financial committee, headed by Hermann Neubacher, arrives in Athens to solve the monetary problem.

1 December

Compulsory use of securities in all transactions, aimed at limiting currency in circulation.

1943

November

Emergence of hyperinflation. Transactions based on barter. Occupation authorities funnel English gold pounds and French gold twenty-franc coins into the Athens money market. Conference in Atlantic City, USA, for the founding of an inter-alliance organisation, the UNRRA.

December

Gold becomes the only medium of exchange and store of value.

1944

1-22 July

At the international conference in Bretton Woods, New Hampshire, 44 nations agree to establish the International Monetary Fund and the World Bank. Greece is represented by K. Varvaressos.

18 October

The expatriated Government returns to Greece. Speech by Prime Minister G. Papandreou at Syntagma Square, Athens, celebrating the country's liberation.

3-9 November

The Greek Government, the Bank of Greece and British experts agree on an economic stabilisation programme.

10 November

The country's fiscal and monetary system collapses. Inflationary bulge at full blast.

11 November

Launch of the new drachma, equivalent to 50 billion old drachmas.

1945

8 January

Failure of the stabilisation programme. Resignation of the Bank's Co-Governor and reinstitution of the rank of Deputy Governor.

1 April

UNRRA aid to Greece.

8 May

End of the war in Europe. Germany surrenders to the Allies.

4 June

Second stabilisation attempt: the Varvaressos Programme.

31 July

President Truman signs the Bretton Woods Agreement Treaty.

August

Confrontation between K. Varvaressos and private sector agents.

2 September

K. Varvaressos resigns from his position as Vice-President of the Government. Abandonment of all stabilisation efforts. September marks the beginning of a period of monetary anarchy, mass strikes, social upheaval and intense political crisis, which lasts until December.

December

Conference of the victors in Paris to determine war reparations. Greece is granted only 152.7 million US dollars (in kind) as compensation, instead of the 15.7 billion US dollars it had claimed.

[bigjarofwasps]

Material damage was enormous, to Greece's transportation by land and sea, to railroad stock, harbors, airports and factories, that were used during the occupation, and were destroyed, just before the retreat of Nazi forces. Material losses amounted to hundreds of $billions. In addition, in March 1942, the Nazis "forcibly borrowed" 10,530,120 gold sovereigns from the Central Bank of Greece, as an interest-free loan. The value of that loan today, with 3% interest amounts to a hefty $17 billion. The damage to Greek economy, to the educational system, with elementary and middle school buildings requisitioned for stationing troops and military supplies, and disruption of Health Care delivery, were enormous.

[bigjarofwasps]

" ... disruption of communications. Inflation continued to accelerate . The only currency to retain confidence was the gold sovereign , which had been shipped into Greece in large quantities by the British authorities to finance resistance activities ... Greece under its control. Although PEEA was careful not to claim that it constituted a rival government, it clearly posed a threat to the government-in- exile, whose influence within Greece ... "

" ... told him to go to Greece - he would like it. He went and stayed. He held the post at the university until his death a few years ago. Greece was in the throes of rampant inflation ... mattered was the gold sovereign. Anything worth buying would be paid in gold sovereigns. One went to the Bank of Greece laden with bank notes and changed one's drachmas into gold. I recall ... "

[bigjarofwasps]

" ... himself up economically, recalled that he had worked for payment in English gold sovereigns, which used to be a common medium of exchange in Greece. As soon as he was able, he converted these extremely vulnerable ... same phrase with which a shepherd expresses the incorporation of stolen sheep into his flock. Given that gold sovereigns were long a popular medium of exchange, "turning them into money" is as impenetrable ... "

" ... Chetniks, EDES had no desire to make a bad occupation worse by attacking the Axis."" Greece was far less susceptible to disintegration and hence revolution than was Yugoslavia, a second cause ... causing inflation to soar, a problem that worsened as SOE began to flood the country with gold sovereigns meant to underwrite resistance activity. With the harvest reduced by as much as a third ... "

" ... French Revolution which Napoleon claimed to champion, and particularly upheld the legitimacy of the deposed sovereigns. They declared that they were not fighting against France, but against the preponderance which Napoleon exercised . The allied ... gold sovereigns, known as 'the cavalry of St George' from their design of George and the dragon, played the same role as the Persian king's gold archers in city-state Greece ... "

" ... transfer to his credit at the Westminster Bank, Foreign Branch Office, London, 3,000 gold sovereigns, which were the subject of this action. In August 1939, the plaintiff contracted to supply 500 ... Roumania to the Greek Army and other business. In October 1940, Italy declared war on Greece. German troops began to gather on the Roumanian frontier, and Germans in civilian clothes ... "

" ... Londos' sister in Kolonaki. There, Londos would send them dangerous, and coveted, gifts: gold sovereigns and even fresh fish. It seems that despite George's earlier misgivings ... Greece. When the mild remonstrances of Tsouderos in London were brushed aside, George and Kanellopoulos became furious. These were enemy countries; Bulgaria was even one of the three occupying powers ... "

[bigjarofwasps]

" ... spring of 1942 he had actually received 24,000 gold sovereigns from the British to take to the hills; but he only departed that summer after exasperated SOE agents threatened to denounce him to the Axis ... case both British and German. EDES was also notorious for its lack of administrative cohesion. SOE commented on Zervas's `disregard of even elementary organisation' and noted that `he hopes for the best ... "

" ... political hearing, and he was not to know that, after a brief interdepartmental spat, the Foreign Office had vetoed any SOE plans to utilise him. Even assuming that he could recruit an Albanian Legion, the British ... failure in raising a revolt would largely have depended on `St George's cavalry': the quantity of gold sovereigns in his kitbag. The British Government essentially ignored him while trying ... "

" ... spring of 1942 he had actually received 24,000 gold sovereigns from the British to take to the hills; but he only departed that summer after exasperated SOE agents threatened to denounce him to the Axis ... case both British and German. EDES was also notorious for its lack of administrative cohesion. SOE commented on Zervas's `disregard of even elementary organisation' and noted that `he hopes for the best ... "

" ... clandestine radio in Athens in the spring of 1942) SOE tried to turn him into a mercenary, offering him 24,000 gold sovereigns (worth $200,000 at the time) to take ... "

" ... debated as a political issue. It was later made to appear in some quarters as a sinister reflection of SOE's atti- tude to the Greek King that it took such prompt action to assist ELAS ... operation was one of some confusion. They parted on good terms with Ares, giving him 250 gold sovereigns, and a letter to the EAM Central Committee, a mysterious entity which they were anxious to reconnoitre ... "

" ... printed money, causing inflation to soar, a problem that worsened as SOE began to flood the country with gold sovereigns meant to underwrite resistance activity. With the harvest reduced ...

[mariner]

Arthur Paton, who has died aged 88, won an MC in North Africa with the 11th Hussars before being recruited by the Special Operations Executive to supply the Greek resistance movement.

Early in 1942, Paton had a chance meeting at the Long Bar of the Gezira Club in Cairo with a major in Intelligence who was looking for a Russian-speaker whom he could trust; Paton was interviewed by SOE and taken on.

He narrowly escaped a mission to blow up oil supplies in Azerbaijan, considered to be suicidal, and was posted to Istanbul. Paton knew the city well and was dispatched to the Bay of Fethiye in southern Turkey with the cover story that he was an Oxford geologist. His job was to try to stop the export of chrome, an important steel-hardener, to the Germans, and he persuaded the manager of a French mine to slow up production, not an easy task considering that the directors in France were pro-Vichy.

Paton also prevailed upon a ship-owner to scuttle his cargo of chrome outside the Bosphorus, promising him that the British would buy him a Liberty ship after the war, an undertaking which was subsequently honoured, albeit without enthusiasm, by the authorities.

Paton was then posted to Smyrna and, in September 1943, he was running an operation smuggling ammunition, wireless sets and gold sovereigns to the Greek resistance. These were concealed aboard caiques and sent from Cyprus to Egrilar, a small cove in the Cesme peninsular.

The consignments were collected by SOE operatives, many of whom were supplying Paddy Leigh Fermor, Xan Fielding and other Allied agents and resistance groups operating in the islands to the west. One gold sovereign, it was calculated, would keep an agent in Greece for a week. Paton said afterwards that 96 caiques had come over to the Allies from enemy-occupied Greece, and 146 operations were run out of the port of Egrilar.

Arthur William Paton was born on April 8 1916 in Korea, where his father was British Consul. Young Arthur travelled widely, and one of his earliest memories was of skating on the frozen water in Vladivostok harbour.

His earliest education was with a White Russian governess, the daughter of a Tsarist general, and when he went to preparatory school at Hindhead, in Surrey, he was still writing in Cyrillic script. He went on to St Edward's, Oxford, where he was head boy and captained the football, rugby and cricket teams before gaining a scholarship to Christ Church, Oxford; there he read History and played rugby and tennis for his college. At 19, Paton was playing rugby for Harlequins and went on to play regularly for the team.

After coming down, he worked for several months on the Humber production line in Coventry, before joining Burmah Oil. He was on the point of travelling to Burma when the Second World War broke out. Having been commissioned into the 11th Hussars, he took part in the campaign in North Africa.

On December 10 1941, Paton was commanding a troop on patrol near Acroma, south-west of Tobruk, when he came across a bivouac of about 200 Axis infantry supported by eight field guns. He ignored the infantry and charged the guns, putting four of them out of action and killing all but one of the gun crews.

The remaining gun crew opened fire at a range of 500 yards, forcing him to withdraw because he was short of ammunition and because two of his three guns had jammed. The citation for his MC stated that his courage and quick thinking had saved his troop from almost certain destruction.

On another occasion, Paton's three armoured cars were shot up by a German aircraft. Fortunately, the crews were brewing up some small distance away and, with the help of the troop sergeant, who had been a London bus driver, they were able to convert the damaged vehicles into two serviceable ones and returned safely to base.

After the end of the war in Europe, Paton was posted to Ceylon. While he was there he made a journey to the Philippines by flying-boat to deliver a personal message from Mountbatten to MacArthur. Demobilisation was followed by a spell at the Foreign Office, before a fishing business took him to Kenya for four years.

This venture, however, did not prosper, and Paton joined the Bombay Burmah Trading Corporation, then becoming famous through Bill Williams's book Elephant Bill. He arrived in Bangkok in 1951 and lived in a bungalow beside the mill where the teak logs were turned into decks for ships; he subsequently sold some of the timber for use on the Royal yacht, Britannia.

Paton was posted to Wallace Bay, Borneo, a logging port on Sebatik Island. He relished the challenge of making the port profitable and improving the lives of some 2,000 inhabitants. Soon, 12 ships a month were being loaded and schools were being built. Under Paton's supervision, the first cocoa trees were planted, and cocoa became one of the country's leading exports.

His wife taught in the Christian School and, in 1958, he was invited to sit on the Legislative Council of North Borneo and then on the Executive Council.

Paton returned to England in 1965. He was appointed OBE and lived in Sussex. He enjoyed gardening and exploring Europe, North Africa and the Middle East in his motor caravan.

Arthur Paton married, in 1955, Jane Cooper, who survives him with three sons and a daughter.