DANUBIAN STATES

Evening Post, Volume CXXVII, Issue 112, 15 May 1939, Page 7

DANUBIAN STATES

RELIANCE ON REICH |

THE PROBLEM OF EXPORTS ,

The Danubian countries are economically significant for Germany because of their supplies of wheat and oil, and the transport by the Danube River system from Germany to the Black Sea, writes S. J. Butlin in the "Sydney Morning Herald." At the same time, these countries are vulnerable to German expansion because of their acute land problem and low standard of living, with the consequent dependence on export markets which Germany is prepared, at a price, to provide. Wheat production, according to the International Institute of Agriculture, in 1933-35 averaged 97,000,000 bushels in Rumania, 82,000,000 in Hungary, 80,000,000 in Yugoslavia, and 48,000,000 in Bulgaria. These may be compared with 152,000,000 bushels for AustraliaMaize is also a major crop, being twice as important as wheat in, Rumania. Were these lands under German control Germany's immediate food difficulties would be solved. „ MOST ACUTE IN HUNGARY. The land problem is perhaps most acute in Hungary, although it is serious enough in Rumania. Both countries still retain a semi-feudal agrarian organisation in which large estates exist side-by-side with small peasant farms which are often mere allotments. la both there was some show of subdivision on a limited scale after the Great War, which did not touch the real difficulties of inadequate holdings and the landlessness created by the. fall in prices of primary products after 1930. Hungary, out of a total population of 9,000,000 has "three million beggars," of whom at least a million, are landless peasants. Rumania similarly reproduces the situation which existed in Spain in 1936. Any Danubian Government must therefore aim not only at land reform, but also at gaining markets which will make possible a living for the peasants. This alone would make economic and political penetration by Germany relatively easy. The German task is made all the easier because such j a situation has fostered local Fascist movements prepared to co-operate witll German Nazis and because of the position of the Jews. ! Excluded from the land, and encouraged to enter commercial pursuits despised by other "races," the Jews now find themselves an object of hatred to the impoverished rural and middle classes, spurred on by local and imported Fascists. Oil is confined to eastern Rumania, if the tentative drillings in southern Hungary are excepted. Here is the oil which Germany needs, or almost enough of it. Moreover, oil producers are not prosperous. Falling prices and increasing stocks have continued in spite of declining output. The truth is that Rumanian oilfields are being exhausted, for drilling has been extended,^ and yet output has not been maintained. In these circumstances, better mar-, kets are essential, and Germany has offered a market of a kind; the kind , she offers the Danubian and Balkan countries for their foodstuffs and ra-wr j materials. - FOREIGN TRADE POSITION. The vital factor is, thus, not simply the nature of Danubian production or widespread poverty, but the foreign trade position with which they are intertwined. Germany wants the economic resources of south-east Europe, as well as political domination, while the democratic Powers seek to impose obstacles in her expansion. The Danubian countries want markets, if possible without losing their separate political existence. They like neither the political threat from Germany nor the kind of market she offers, but any market is better than none, and the democratic Powers were rather belated in their offers of assistance. By now the German technique is well known. Large quantities of goods were brought from Danubian countries, after which, in 1936, Dr. Schacht made his "air-raids" on the capitals and qffered payment in German manufactures only, reinforcing the offer.by the. threat of default on previous purchases and the cessation of all buying, a manoeuvre which was repeated last year. Apart from the consequent extension of German political influence, there have been important economic results in the south-east. To supply German requirements there has been a transfer from food production to greater outputs of raw materials, especially cotton, flax, hemp, oil, iron, copper, lead, and aluminium. Meanwhile, Danubian • countries showed a deceptive surplus of exports, which represented goods unpaid for, except in. blocked marks and lire. (Italy pursued a similar policy less adroitly and less successfully. She has lost much of her Balkan trade to Germany.) TRADE FIGURES. Something of the growing economic domination by Germany can be seen in the trade figures. In 1929, Hungary received 33 per cent, of her imports from Greater Germany; in 1937, 44 per cent. Yugoslavia's imports from Germany increased in the same period from 33 per cent, to 43 per cent, of her total imports, and those of Bulgaria from 30 per cent.'to 58 per cent. Meanwhile, exports to Germany increased, except from Rumania, Hungary sending 41 per cent, Yugoslavia 35 per cent., and Bulgaria 47 per cent, of their total exports to Greater Germany in 1937. As Dr. Funk, German Minister of Economics, said last August, "the idea is to make Germany the entrepot for Balkan goods, thus placing her at the head of a gigantic economic bloc, stretching from the Rhine to the Black Sea."

The democratic countries were late in accepting the challenge, but, especially in the last two years, they have tried to play the German game, with the advantage of not offering payment in blocked currencies. The shares of England, France, and America in Danubian trade, particularly in tha markets for exports which they offer, have risen. • •

But, while they trebled their purchases of Yugoslavian and Bulgarian goods between 1932 and 1937, their share in Danubian trade is still less than half Germany's. It may now ba too late for commercial diplomacy in the south-east, but if it is not, the democratic countries will need to offer much more if they are to detach the Danubian countries from their ecpnomic subservience.