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When news broke two weeks ago of the harsh terms of a new bailout for Greece, many questioned whether the country still qualified as a sovereign state. “Debt colony,” a term long used by Syriza and its supporters, was suddenly everywhere in the press. Even the Financial Times used the language of empire: “a bailout on the terms set out in Brussels,” as a 13 July editorial put it, “risks turning the relationship with Greece into one akin to that between a colonial overlord and its vassal.”
Suggestions like these have invited historical comparison. One parallel that’s been mentioned is that of Egypt during the late nineteenth century. In 1876, as a heavily indebted Egypt approached bankruptcy, the Khedive Ismail Pasha agreed to the creation of an international commission, staffed by Europeans, with oversight of the Egyptian budget and control over certain sources of public revenue. This arrangement, designed to ensure the timely servicing of foreign debts, opened a new and extended period of intensified European intervention in Egypt – the Caisse de la Dette Publique was not abolished until 1940. [continue reading]