The battle between Athens and Brussels goes back much further than the Eurozone.

By Nicholas G. Karambelas, Politico

With the next round of national elections coming up Sunday, Greek voters are casting around for a new champion to defend them against European bankers following the left-wing SYRIZA Coalition’s abrupt concessions last spring. But the Greeks have been without an effective champion for far longer than most people realize. Many critics trace what Greece is going through today—debt crisis, infighting, panic, economic devastation and above all the manipulation of the nation’s fate by larger European powers—to the start of the Eurozone a decade and a half ago. In fact these problems go back nearly two centuries to the very beginnings of the Greek state, which was founded in 1830. Earlier this year Alexis Tsipras, the leader of the SYRIZA Coalition, gave his acceptance speech as prime minister at the University of Athens standing directly below an image of King Otto, a Bavarian prince imposed on Greece in 1832 by the European powers of Great Britain, France and Austria Hungary, with an assist from Russia, to protect their interests. It is hard to escape the symbolism of that image—of Tsipras and Otto in the same picture. The history of King Otto’s curious reign, and Tsipras’ massive problems today in facing down the European institutions, have many discomfiting parallels.

Just as they were in 1830, Greece and its economy are still being controlled by the European Powers although now in the form of the European institutions, which are in turn controlled by Germany. And just as in the time of King Otto, when the European Powers sought—and largely exercised—political and geopolitical control over Greece, today, under the terms of the bailout to which Greece had to agree in July it once again faces the prospect of conceding a significant measure of national sovereignty to the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). The ultimate source of this pressure? Germany, once again.

It hardly seems possible that so little has changed, when so much else has. The seminal event in modern Greek history is the War of Independence, which began in 1821 against the Ottoman Empire and ended in 1830 with the establishment of the Greek state. For geo-strategic reasons, Great Britain enthusiastically supported Greek independence. Inspired by the poet, Lord Byron, prominent friends of Greece, referred to as philhellenes, formed the London Greek Committee to encourage the British government in this policy. To prosecute the war, the Greeks needed funds to support their military. The Greeks obtained two loans from a London banking house. Because of the obvious risks of default, the loans were secured by all of the revenues and all of the national property held by the Greeks and of Greece once it was independent.

Upon independence, the Greek leader and soon-to-be first head of the Greek state, John Kapodistrias, formed a republican democracy, a rarity in that era. But even before the Greek state was formally established, Kapodistrias had to stop repaying the loans. Great Britain, France and Russia offered to guarantee another loan as long as Greece could obtain a loan from the private sector—which Greece did, from a French banking house. The lenders established a board of control, with no Greek representation, which disbursed the funds as it saw fit again without any Greek participation. The board ended up manipulating the operation of loans to the advantage of the lenders and contrary to the interests of Greece. It was eventually dissolved after it was vocally criticized by British philhellenes.

But there was another problem: In those years a republican democracy was anathema to the European Powers. Under the London Convention of 1832 Great Britain, France, Bavaria and Russia became the guarantors of Greek independence and, consequently, overseers of the Greek state. As guarantors they considered themselves entitled to create a Greek government in their own image. They chose a 17-year-old member of the extended European royal family, Prince Otto of Bavaria, to be king. Approved pro forma by the Greek National Assembly, Otto arrived in Greece aboard a British warship along with a retinue of German administrators and mercenaries. A council of German administrators approved by the guarantor European powers effectively governed Greece. It took control of the state finances, which included paying back the independence war loans for the benefit of the French banks and guarantor European Powers.

Although his reign began with optimism, King Otto’s German administrators were tyrannical and arbitrary. Also, because of the onerous repayment terms of the independence war loans, the Greek economy was already in a deep depression when Otto became the king. King Otto and his German administrators wielded near absolute power. The Greek people finally demanded that his power be limited. Contemporary accounts report that a crowd of people gathered in front of the king’s palace demanding a constitution. Otto reluctantly agreed. The Constitution of 1844 established Greece as a constitutional monarchy and by the standards of the mid-19th century, it was a liberal document. Unfortunately, Otto acted almost immediately to undermine it, but he did do one thing that was popular. The European Powers demanded that Greece agree to terms requiring a surplus from which the loans would be repaid and that certain customs revenues be assigned directly to the lenders for repayment. Otto rejected these demands and suspended payments. His German administrators advised him that he must stay in the good graces of the European Powers and agree to the demands. Instead, Otto fired his German administrators.

Things got even more complicated when repayment of the independence war loans became intertwined with international issues arising from the Crimean War. Greece sought to ally with Russia, its fellow Orthodox nation, against Great Britain and France. Because he supported Russia and the suspension of repayments, King Otto lost the support of Great Britain and France. At the same time, despite having stood up to the European Powers, he lost his domestic support because of his ill-conceived efforts to undermine the constitution. His reign was further compromised by the fact that he was unable to sire an heir and his refusal to convert to the Greek Orthodox religion. Although he never formally abdicated, King Otto departed from Greece in 1862 just as he had arrived 30 years before, aboard a British warship.

Under the authority of the London Convention of 1832, the guarantor European powers sought another candidate for the Greek crown. The European powers adopted the policy of Queen Victoria, monarch of the preeminent power of the day, which was to place family members who were related to her and to each other on the thrones of Europe so that any international crisis could be handled as a family matter. (Fortunately for Queen Victoria, she did not live to see a family spat turn into the First World War).

This time the guarantor European powers appointed to the Greek throne a prince of the Danish royal house who fit the Victorian policy perfectly. His sister was married to the Prince of Wales, who became King Edward VII of Great Britain, and his wife was a family member of the Romanov dynasty and a first cousin of Czar Alexander III. He was crowned George I in 1863, assuming the role of a true constitutional monarch by remaining above the parochial and pedestrian machinations of the Greek politicians. It was a policy his descendants did not necessarily follow.