World War I

Immediately after the start of World War I a fundamental dispute between King Constantine and Prime Minister Eleftherios Venizelos erupted over the question of Greece's participation in it. The King, an honorary field Marshal in the German army married to the Kaiser's sister, favored the Central Powers, whereas Venizelos strongly supported the Entente. The royalist government formed in December 1915 maintained Greece's neutrality but followed policies, which led to friction with the Entente. In August 1916 a group of pro-Venizelos officers ("National Defense") staged a coup against the royalist government in Thessaloniki. Here Venizelos established a provisional government with its own army in Northern Greece.

The King was forced by the allies to leave the country in 1917. Venizelos became once again prime minister of a unified Greece, which entered the war against the Central Powers and their allies, Bulgaria and Turkey. Venizelos's support of the Entente cause was rewarded with the Treaty of Sevres, which granted to Greece West Thrace and part of East Thrace, as well as the provisional administration of the city of Smyrna in Asia Minor.
The city was occupied by a substantial Greek force protected by allied warships. Turkey's humiliating defeats in the Balkan wars and in World War I, coupled with the occupation of Smyrna, acted as catalysts for a revival of Turkish nationalism under the leadership of Mustafa Kemal Ataturk. The Greek government, encouraged by philhellenic statements of British Prime Minister Lloyd George and others, launched a military campaign in inland Asia Minor. Weakened by lack of supplies as well as by a deterioration of the political and military situation at home, the Greek forces could not resist Kemal's massive counter offensive in August 1922. They withdrew to the coast in disarray evacuating Smyrna. The Turkish invasion of the city was accompanied by the massacre of some 30,000 Greeks and Armenians. Smyrna was burned down and thousands of refugees flooded into the Aegean islands and mainland Greece.

The bitterness of defeat and the ensuing political upheaval led to the King's abdication and to the execution of six politicians and army officers court martialled on charges of high treason. The Asia Minor Catastrophe, however, had a much broader, deeper impact on both short-term and long-term political, social and economic developments in Greece.
With military dictatorships and weak democratic governments succeeding each other, with a continuous clash between royalists and republicans, with an economy severely hurt by debts and the repercussions of continuous entanglements in wars, of political instability and the burden of the gigantic refugee wave from Asia Minor and other regions under Turkish rule, Greece was faced with the specter of collapse. Venizelos's comeback in 1928 marked the beginning of a new period of national reconstruction and regeneration. The fresh entrepreneurial spirit injected into the economy by refugee industrialists and merchants as well as the distinctive contribution to the country's cultural life by refugee writers and artists were significant factors to this effect.

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