The economy -The army

ndronikos II inherited an Empire that exhibited many symptoms of decay. Its weakness was particularly manifest in the area of the economy, on which the military, political and social sectors all depended. The continuous efforts exerted by Michael VIII to counter the aggressive plans of the Latins against Byzantium, resulted in the depletion of the Empire's funds. The army of mercenaries the Empire had to support, constituted an unbearable burden for the tax-payers, so that it became necessary to drastically reduce the military forces. The cavalry was limited to three thousand men, while the fleet was almost completely dismantled.

Having broken up the fleet, the state was obliged to depend on the navy of Genoa, towards whom Andronikos II showed particular favour. In an attempt to make up for the deficiencies in defence, the Emperor sought to placate the enemies of the state by paying them annual subventions, while to alleviate the state's desperate financial situation, he proceeded to take drastic measures, reducing the tax privileges of the great landowners, increasing taxation and introducing a new tax to be paid in kind, the "sithokrithon" ("wheat and barley" tax). By these measures he managed to increase the income of the state to 1,000,000 hyperpyra. In spite of the fact that this was a very small amount in relation to the income from taxation during the previous centuries, it was too much for the small and medium taxpayer. The situation was aggravated by the debasing of the Byzantine coinage, which raised prices and made the position of the lower classes even more untenable.

The general weakness of the state resulted in heightened social conflict and encouraged centrifugal tendencies which, however, must not be related to similar tendencies in the West. An effort on the part of Andronikos II in 1296 to bring about reforms in the judicial system did not meet with the expected result.