Ottoman public debt

The Ottoman public debt was a term which dated back to 24 August 1855,[1][2][3][4] when the Ottoman Empire first entered into loan contracts with its European creditors shortly after the beginning of the Crimean War.[5]

The Empire entered into subsequent loans, partly to finance railway construction and partly to finance deficits between revenues and the lavish expenditure of the Imperial court.[6] Some financial commentators have noted that the terms of these loans were exceptionally favourable to the French and British banks which facilitated them, whereas others have noted that the terms reflected the imperial administration's willingness to constantly refinance its debts.[6][7]

The Ottoman government declared a sovereign default on its loan repayments with the Ramazan Kararnamesi (Decree of Ramadan) on 30 October 1875.[6] Six years later, as part of the Muharrem Kararnamesi (Decree of Muharrem) on 15 October 1881, which reduced the overall public debt, the Ottoman Public Debt Administration (OPDA) was established. This made the European creditors bondholders, and assigned special rights to the OPDA for collecting various tax and customs revenues within the Ottoman Empire.[6]


Ottoman Empire

  • In 1875, the nominal public debt was £200,000,000, with annual interest and amortization payments of £12,000,000, more than half the national revenue.
  • In December 1881, the debt was reduced from £191,000,000 to £106,000,000 with the government's concessions to the OPDA.

Republic of Turkey

  • During the Paris Conference of 1925, the Republic of Turkey agreed to pay 62% of the Ottoman Empire's pre-1912 debt, and 77% of the Ottoman Empire's post-1912 debt.[4] With the Paris Treaty of 1933, Turkey decreased this amount to its favour and agreed to pay 84.6 million liras out of the remaining total of 161.3 million liras of Ottoman debt.[4] The last payment of the Ottoman debt was made by Turkey on 25 May 1954.[4]

See also

References and notes

  1. ^ Dünya Bülteni: "Osmanlı Devleti ilk kez dış borç aldı"
  2. ^ Derin Strateji: "Osmanlı Borçları ve Düyun-u Umumiye İdaresi"
  3. ^ Yazarport: "Kırım Savaşı ve İlk Dış Borçlanma (1854-1855)"
  4. ^ a b c d History of the Ottoman public debt Archived 2010-11-25 at the Wayback Machine
  5. ^ Douglas Arthur Howard: "The History of Turkey", page 71.
  6. ^ a b c d Niall Ferguson (2 January 2008). "An Ottoman warning for indebted America". Financial Times.
  7. ^ "Gold for the Sultan: Western Bankers and Ottoman Finance, 1856–1881", by Christopher Clay, London, 2001.