The problem regarding Greek currency held abroad was the most serious. Many citizens of Greek origin had savings in branches of Greek banks in many countries around the world. The Greek government argued that all drachmas circulating abroad, either in the possession of individuals or in bank accounts, were being used for purposes of speculation. Smyrna represented a peculiar problem. There were a large number of American firms in Smyrna, and they did not come under the protection accorded to foreigners in Greece proper. In the view of the Greek government, the Greek-occupied sector of Asia Minor had not been annexed to Greece formally, and could only be considered foreign territory for the purpose of the Forced Loan.

In 1926 another Forced Loan was imposed by General Theodore Pangalos; however, it was more limited in its application and much less significant in its international implication.

The novel plan for governments to confiscate funds from banks, attaching their citizens’ bank accounts to meet national moments of financial distress, is an old idea making a return. How many countries will pursue this strategy to supplement their dwindling supply of tax revenues and reduced borrowing capacity? Will history repeat itself?

Cyprus has already considered an outright seizure of a percentage of private monies, labeling this measure a tax to raise desperately needed funds as part of its package of agreements with European Union officials. Vociferous public outrage caused the government to hesitate initially. But a severe monetary crisis forced officials to implement a modified version of their original plan. Just as in the 1920s in Greece, there were significant international implications, repercussions that have begun to reverberate throughout the entire Cypriot economy. Many foreigners, a large number of them businessmen from Russia, will be adversely affected and may opt transfer their businesses and holdings to other countries, amplifying the deleterious effect of the measure.

But Cyprus is not the only country experiencing money woes. Greece, Spain, and Italy--also EU member-states--are similarly grasping for solutions to their difficult economic straits. Money markets and economic experts around the world are watching this situation carefully to analyze the outcome of Cypriot action and its effect upon their own economies. Will the EU urge these countries to undertake similar measures? And with the federal debt of the United States growing exponentially--no plans for serious cost cutting in sight--could Americans, too, experience similar seizures as interest rates rise and the national debt becomes unbearably overwhelming?