Great Eastern Crisis

The war is referred to differently in various languages of the peoples involved in it due to differing sociocultural backgrounds. In Serbo-Croatian and Turkish, the war is likewise referred to as Velika istočna kriza ("Great Eastern Crisis") and Şark Buhranı ("Eastern Crisis") respectively. However, the occasionally used Turkish name Ramazan Kararnamesi ("Decree of Ramadan") refers specifically to the sovereign default declared on 30 October 1875 in historiography while 93 Harbi ("War of 93") refers to the Russo-Turkish War (the year 1293 of the Islamic Rumi calendar corresponding to the year 1877 on the Gregorian calendar).

Background

The state of Ottoman administration in the Balkans continued to deteriorate throughout the 19th century, with the Sublime Porte occasionally losing control over whole provinces. Reforms imposed by the European Great Powers did little to improve the conditions of the Christian population, while at the same time managing to dissatisfy a sizable portion of the Muslim population. The Ottoman province of Bosnia suffered at least two waves of rebellion by the local Muslim population, the most recent in 1850. The Austro-Hungarian Empire consolidated after the turmoil of the first half of the century and sought to reinvigorate its longstanding policy of expansion at the expense of the Ottoman Empire. Meanwhile, the nominally autonomous, de facto independent principalities of Serbia and Montenegro also sought to expand into regions inhabited by their compatriots. Nationalist and irredentist sentiments were strong and were encouraged by Russia and its agents.

Ottoman economic crisis and default

On 24 August 1854, during the Crimean War, the Ottoman Empire took its first foreign loans. The empire entered into subsequent loans, partly to finance the construction of railways and telegraph lines, and partly to finance deficits between revenues and the lavish expenditures of the imperial court, such as the construction of new palaces on the Bosphorus strait in Constantinople. Some financial commentators have noted that the terms of these loans were exceptionally favourable to the British and French banks (owned by the Rothschild family) which facilitated them, whereas others have noted that the terms reflected the imperial administration's willingness to constantly refinance its debts. A large amount of money was also spent for building new ships for the Ottoman Navy during the reign of Sultan Abdülaziz (r. 1861–1876). In 1875, the Ottoman Navy had 21 battleships and 173 warships of other types, which formed the third largest naval fleet in the world after those of the British and French navies. All of these expenditures, however, put a huge strain on the Ottoman treasury. In the meantime, a severe drought in Anatolia in 1873 and flooding in 1874 caused famine and widespread discontent in the heart of the empire. The agricultural shortages precluded the collection of necessary taxes, which forced the Ottoman government to declare a sovereign default on its foreign loan repayments on 30 October 1875 and increase taxes in all of its provinces, including the Balkans.

Uprisings and wars in the Balkans

The decision to increase taxes for paying the Ottoman Empire's debts to foreign creditors resulted in outrage in the Balkan provinces, which culminated in the Great Eastern Crisis and ultimately the Russo-Turkish War (1877–78) that provided independence or autonomy for the Christian nations in the empire's Balkan territories, with the subsequent Treaty of Berlin in 1878. The war, however, was disastrous for the already struggling Ottoman economy and the Ottoman Public Debt Administration was established in 1881, which gave the control of the Ottoman state revenues to foreign creditors. This made the European creditors bondholders, and assigned special rights to the OPDA for collecting various types of tax and customs revenues.