Constantine, widely seen as pro-German, had been deposed and forced into exile in 1917 after a power struggle with Venizelos over the king’s unwillingness to bring Greece into the world war on the side of the Allies. Moreover, Constantine’s wife was Kaiser Wilhelm’s sister. He had gone to school in Germany, held honorary rank in the German military, and though he had insisted on Greek neutrality in World War I, he showed a decidedly pro-German tilt: When French troops landed near Athens during the war, the Greek Army fired on them.

If Constantine was restored to throne, the Allies icily informed Athens, financial aid to the country would be cut off. The message was clear, and the outcome inevitable: The beleaguered Greeks, militarily overextended and woefully dependent on the Allies for financial support, clearly would have no option other than bowing to their creditors’ demands.

But in a proud, impractical and stirring exercise of national sovereignty, the country thumbed its nose at the Allies. Constantine returned to the throne that December. Angered, France and Britain set up a financial blockade, withholding loans that been promised during the world war and that remained payable to the Greeks. The United States also reneged on loans. The drachma lost much of its value. Greece was isolated.

Desperate, the country’s finance minister sought to solve the debt problem by ordering citizens to literally cut their bank notes in two — one half represented half the face value of the currency, the other was considered a loan to the Greek government to pay for the war. One half of a 50-drachma note became worth 25 drachmas, and the other half became a loan to the government, redeemable as a bond.

In August 1922, the Turkish nationalist army delivered a crushing blow, defeating the Greeks in the Anatolian interior. Smyrna was retaken on Sept. 9. The modern republic of Turkey was established as more than a million ethnic Greeks were forced out of Anatolia, effectively ending 3,000 years of Greek presence in Asia Minor.

Refugees swarmed into Greece, raising the population of the destitute nation by 25 percent to nearly five million people. There was little food and medicine. Men, women and children died of disease and starvation by the thousands. Homeless refugees slept in the streets of Piraeus, Athens and Thessaloniki.

The flood of impoverished people had an immense impact on Greek social and political life. The government was forced to borrow more money at high interest rates, further ravaging the nation, and slums and shantytowns sprung up as the new arrivals sought shelter. Anger and alienation (often expressed in rembetika music — the so-called Greek blues) fueled a new radicalism and permeated Greek political discourse through the 20th century. It continues to this day.