GERMAN TRADE POLICY

Otago Daily Times, Issue 23637, 22 October 1938, Page 12

GERMAN TRADE POLICY

The German aim to secure a -more permanent hold on the markets of central and south-eastern Europe has lately been re-emphasised by the visits to various capitals paid by Dr Funk, Reich Minister of Economics. It has been argued that the Danubian countries are economically dependent on each other, and that German trade ought to play an increasingly important part in the development of them. The plan prepared by Dr Schacht, who was Dr Funk’s predecessor in office, to obtain a virtual monopoly of Balkan and Danubian trade for Germapy provided for the purchase by Germany of the crop surpluses of the countries concerned at prices above world parity, and for payment being made for them in marks placed to the credit of the exporting country in the German Reichsbank. The creditor was then able to use the accumulated credits for the purchase of German manufactures. The plan worked well for a time. But the inevitable result of heavy German purchases of foodstuffs and raw materials has been to exhaust the capacity of her Balkan and Danubian creditors to utilise the huge credits in blocked marks at their command. Several Eastern European countries, indeed, are said to have bought more German indus-

trial products than can possibly be used by them in years. It is believed that one of Dr Funk’s tasks has been to allay fears that economic difficulties may one day force Germany to devalue the mark, with the result that she may be no longer able to buy on the expensive Danubian market. And if she is compelled to look for her requirements in cheaper overseas markets, the Danubian States may be faced with the threat of industrial chaos. It appears, therefore, to be Germany’s main objective at the moment to draw central and south-eastern Europe tightly into an economic confederation which would be practically cut off from the rest of the world, or, in other words, to make the trade of the countries affected subordinate to her own needs. The urgency with which that task is now being undertaken is attributed to an interpretation of the recent Anglo-Turkish trade agreement as an attempt to build up the non-German trade of the Danubian countries. It is not difficult to see that the wisdom of the latter policy may have a strong appeal to Danubian statesmen who have reason to fear the consequences which the devaluation of the German mark would have on the economy of their own countries. It is certainly possible to appreciate more fully the meaning of current nolitical and military crises in Europe if, as has been suggested, they are viewed against the background of German economic expansion.