The consequences of the economic crisis that hit the American economy in 1929 did not have a uniform impact in other countries. Greece, which one year earlier, in 1928, had achieved monetary stability, for a while managed to avoid the dramatic effects of the depression that other European countries had suffered. The inflexible policy of defending the drachma, adopted by Venizelos' government, was bearing fruit until Britain left the gold standard. The extent of the interconnection between the Greek economy and the pound sterling was such that the country - along with several others - was obliged to adopt immediate measures.
The Athens Stock Exchange closed indefinitely and the reserves of the Bank of Greece in exchange and gold, which had grown due to speculation, were wasted. Imports began to decrease drastically and the new exchange policy that was introduced was characterized by protectionism, with state intervention prominent. The devaluation of the national currency was accompanied by the compulsory circulation of the drachma, abolition of the exchange market and suspension of paying amortizations and interest on all state loans. The announcement of such measures in the spring of 1932 led the country to a course of economic independence, under the strict control of the state. The Greek reaction to the crisis marked the first attempt to organize the economy on models which were both rationalistic and modernized for the time.