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An Italian general, Tellini, had to supervise the sorting out the borders between Greece and Albania. Tellini was killed.For that reason, an Italian leader, Mussolini, defended Tellini and blamed the Greek government for the assassination. He demanded the Greek government to pay compensation and to execute the assassination. In the meantime, he bombed and invaded Corfu.
On the other hand, in Greece, they didn't know who the killer was, so they asked the League for help.
The League of Nations proposed to condemned Mussolini’s actions, but also made Greeks pay compensation and the money to be held by the League and, the minute they found the killer, they would give the money to Italy.
Yet Mussolini, was not happy with the proposal. He was against it. He insisted that this dispute had to be settled by the Council of Ambassadors instead of the Council of the League.
Mussolini, would probably have failed if the British and french had stood together. Instead, the French backed the Italians, and the British supported the Greeks. In the end, Mussolini got his way and the Council of Ambassadors made the final ruling. The Greeks had to apologise and pay compensation directly to Italy and on 27 September, Mussolini withdrew from Corfu.
The murderers were never found, they suppose that the Greeks killed him because of favoring the Albanian side. But actually it was never proved. The League was criticised after this incident because the border between Greece and Albania was never solved and that led to this crisis.
The League was tested again after two years. In October 1925, Greek troops invaded Bulgaria after an incident in the border in which some Greek’ssoldiers were killed.
The secretary-general of the League acted, calling a meeting of the League Council in Paris. The League demanded both sides stand their forces down and Greek forces withdraw from Bulgaria.
Britain and France back the League judgement. The League sent observers to assess the situation and judge in favor of the Bulgarians. Greece had to pay $45,000 in compensation and was threatened with sanctions if it did not follow the ruling.
Greeks obeyed, they did complain that there seemed to be one rule for the large states and another for the smaller ones. Also the incident was seen as a major success for the League and many observers seemed to forget the shame of the Corfu incident as optimism about the effectiveness of the League.