Evening star., 1940-10-16
Balkan Economics

In an Illuminating dispatch, Le-
land Stowe, one of our ableSt foreign
correspondents, describes the way
German economic penetration of the
Balkans, which has gone on inten-
sively for years, laid firm founda-
ton for the political and military
conquest that is now taking place.
Mr.. Stowe attributes this economic
pre- conquest to DR.. Schacht's barter
system and the tireless ability of
German businessmen.
Undoubtedly all that is true as far
as it goes, but it is not quite the
whole story. ShreWd though the
Reich's trade policy may be and re-
Sourceful though its travelling sales
men have shown themselves. Ger
many's aggressive commercial meth
ods have been much more successful
in Southeastern Europe than they
have anywhere else. For this pecu-
liarly reSounding economic triumph
there must be special reasons.
The basic reason is that the eco
nomic life Of Southeastern Europe
has been of a fundamentally un-
sound basis ever since the destruction
of the Austro- Hungarian Empire at
the close of the last war. Whatever
its political shortcomings, that en-
pire was a Well-balanced economic
unity, with which the small Balkan
States we're intimately and profitably
connected. In its place arose num-
Der of countries whose frontiers were
drawn to satisfy natiOnaliStic desires,
with no regard for economic realities.
Animated by jealous patriotism and
mutually suspicious of one another,
these new nations killed interna-
tional trade by high tariff barriers
and tried to be self-sufficient unto
themselves by building up protected
industries largely financed by for
eign capital.
Broadly speaking, these policies
were doomed to failure. None of
those countries is large enough to
support large-scale modern industry,
nor have they the native capital and
ability to attempt induStrializatlon
even on a modest scale. Southeastern
Europe's natural economic line of de-
velopment is that of an agricultural
and raW-material region, and its
natural markets are the heavily in
dustrialized regions farther north,
especially Germany, including Aus
tria. Those are fundamental eco
nomic factors which neither politics
nor war can baSically change. Cut
throat tariffs and unSound indus
trialization resulted in high prices,
chronic depression, and growing pow
erty among the peasant masses, who
bore most of the burden.
All this made Southeastern Europe
ripe for German economic conquest.
The Reich could offer the depressed
Balkan countries outlets for its agri-
cultural products and raw materials
in return for manufactured goods
at price schedules with which the
parasitic local industries simply
could not compete The only ones
who suffered were the local manu-
facturerS and the foreign money
lenders, largely French. The peasants
and townsfolk, who made up the vast
majority, benefited. So there was no
real popular opposition to German
economic penetration, because few
of these humble folk saw the politi-
cal implications. In short, the
economic conquest of the Balkan
lands was, for Germany, pretty much
of a pushoVer.
Of course, the Germans made the
most of their opportunities, as Mr..
Stowe vividly depicts. But, all the
while, they were working with the
grain