The effort to resettle refugees after 1922, as well the financial cost of the Asia Minor campaign, inflated the state debt to the National Bank, which was covering the enormous sum in banknotes. The immediate result was a dramatic devaluation of the drachma. What is more, the parlous state of the country's economy grew even worse due to the decrease of migrant and shipping remittances to Greece and the fall in exports. The situation undoubtedly allowed the state to intervene decisively in the area of development, but on the other hand it also encouraged local production. After the events of 1925-26 and the overthrow of T. Pankalos' dictatorship, G. Kaphantaris, minister of Finance for the 'Ecumenical' government, laid the foundations for the policy aimed at stabilizing the drachma. The upgrading of Greece's credit capacity was linked, in his view, with attracting foreign capital, which was essential for the development of the country.
Nevertheless, the attempted purge of public finances met with serious obstacles, especially within certain sections of the National Bank, as it was associated with the creation of a new state institution for managing public money, the Bank of Greece. Competition between commercial banks became intense and the leakage of gold and assets undermined the stabilizing measures of Venizelos' government.
From 1933 on until the eve of the war, capital in Greece was in a state of flux because of the extraordinary increase in the rate of growth. Currency circulation increased and so did bank deposits. Finally, in the area of state expenditure, it is worth noting that the percentage provided for state security was approaching 39% of the country's budget.