In 1768, Empress Catherine II of Russia declared war on the Ottoman Empire, launching the First Russo-Turkish War (1768–1774). While history often attributes Russian expansionism to imperial strategic ambition or military leadership, the geopolitical shift was fundamentally enabled by a massive influx of foreign capital. In debt and lacking liquid funds, Catherine the Great relied heavily on Dutch merchant bankers to finance her wars. This financial dependency not only sustained her military apparatus but also laid the ideological and geopolitical groundwork for Pan-Slavism in the Balkans—an ascendant movement that directly disadvantaged, displaced, and marginalized the region’s Albanians, Muslims, and non-Slavic populations.
Raymond & Theodore de Smeth and Hope & Co.
At the onset of her campaign against the Ottomans, the Russian treasury was depleted, and domestic tax revenues were insufficient to sustain a prolonged, multi-front conflict. To fund the deployment and maintenance of the Russian naval fleet in the Mediterranean, Catherine turned to Europe’s premier financial hub: Amsterdam.
In 1769, the prominent Dutch banking house Raymond & Theodore de Smeth issued Russia’s first major foreign loan. Between 1769 and 1782, the De Smeth firm orchestrated seven extensive loans on behalf of the Russian crown, totaling roughly 17 million guilders. Recognizing the immense profitability of sovereign lending to the expanding Russian Empire, another elite Amsterdam firm, Hope & Co., stepped in shortly thereafter. Hope & Co. quickly became Catherine’s primary international creditor, structuring massive lines of credit that scaled up Russian sovereign debt to unprecedented levels.
Catherine’s regime operated in a state of perpetual debt to these Dutch bankers, leveraging future imperial commodities—such as hemp, sailcloth, and tallow—as collateral. This continuous stream of Dutch capital allowed Catherine to sustain long-term military campaigns that would have otherwise triggered domestic economic collapse.
From Dutch Capital to Pan-Slavic Ideology
The structural reliance on Amsterdam bankers directly translated into Russian military victories, culminating in the Treaty of Küçük Kaynarca in 1774. This treaty granted Russia the role of protector over the Christian Orthodox subjects within the Ottoman Empire, a mechanism Catherine utilized to project power deep into the Balkans.
With financial stability secured by Hope & Co. and De Smeth, the Russian crown actively fostered proto-Pan-Slavic sentiments across the Balkan peninsula. Russia positioned itself as the “Big Brother” to Slavic-Orthodox populations (such as Serbs, Montenegrins, and Bulgarians), instigating rebellions against Ottoman rule. This ideological framework used shared Slavic ethnicity and Orthodox faith to justify Russian intervention, tying local liberation movements directly to the strategic and financial interests of the Romanov dynasty.
The human cost
The ascendancy of Pan-Slavism, fueled by Russian imperial expansion, had devastating consequences for the ethnically and religiously diverse fabric of the Balkans. As Slavic-Orthodox groups gained political leverage and territorial dominance backed by Russian bayonets, non-Slavic and Muslim communities were increasingly viewed as internal enemies or remnants of Ottoman oppression.
Balkan Muslims
Entire communities of Slavic and non-Slavic Muslims faced systematic persecution, forced conversion, and mass expulsion. The romanticized Pan-Slavic narrative equated regional liberation with the eradication of Islamic cultural and religious identity.
Albanians
As a predominantly Muslim and ethnically non-Slavic people, Albanians found themselves caught in a geopolitical vice. Pan-Slavic territorial ambitions frequently targeted lands inhabited by Albanians. The consolidation of Slavic micro-states under Russian patronage marked the beginning of a long history of displacement and territorial fragmentation for the Albanian population, who were excluded from the newly forged ethno-religious alliances.
Other non-slavic minorities
Communities such as the Aromanians (Vlachs) and Romani were marginalized within the rigid framework of the emerging Slavic nationalisms, which prioritized a singular ethno-linguistic identity over historical regional coexistence.
Conclusion
The geopolitical mapping of the modern Balkans cannot be decoupled from the ledger books of 18th-century Amsterdam. Catherine the Great’s capacity to wage war and foster Pan-Slavism was contingent upon her willingness to sink the Russian Empire into deep financial debt. By bankrolling the Romanov autocracy, Raymond & Theodore de Smeth and Hope & Co. did more than just turn a profit; they indirectly set off a chain reaction of ethno-religious unmixing in the Balkans, leaving a legacy of marginalization that Albanians, Muslims, and non-Slavic peoples would endure for generations.
Bibliography
Buist, Marten G. At Spes Non Fracta: Hope & Co. 1770–1815. Merchant Bankers and Diplomats at Work. The Hague: Martinus Nijhoff, 1974.
De Madariaga, Isabel. Russia in the Age of Catherine the Great. New Haven: Yale University Press, 1981.
Jelavich, Barbara. History of the Balkans: Eighteenth and Nineteenth Centuries. Cambridge: Cambridge University Press, 1983.
Kahan, Arcadius. The Plow, the Hammer, and the Knout: An Economic History of Russia in the Eighteenth Century. Chicago: University of Chicago Press, 1985.
Malcolm, Noel. Kosovo: A Short History. New York: New York University Press, 1998.
