From 1934, Germany and the National Socialist leadership strived to create the Grossraumwirtschaft (large area economy) embracing the states of South-Eastern Europe. These countries had been severely affected by the economic depression; their export markets had shrunk significantly and their payments position was precarious. This had forced most of the countries in varying degrees to abandon the relatively free trading system that had been built up in the 1920s. With the conclusion of bilateral agreements in the mid-1930s, Germany became the most important trading partner for the countries of Central and South-Eastern Europe. The Nazi leadership introduced a system of economic planning, which placed special emphasis on the control of foreign trade and exchanges.
Radice notes that the endeavour to attach the economies of Hungary, Romania, Yugoslavia, and Bulgaria to the German economy through bilateral clearing agreements developed with varying success, but except for Bulgaria, cannot be said to have been satisfactory from the point of view of the Third Reich. Despite the Anschluss of Austria in March 1938 and the dismemberment of Czechoslovakia in 1939, Yugoslavia and Romania still maintained important trade relations with the countries of Western Europe and prevented their complete absorption into the German system. He concludes that it was not until after the German conquest of most of continental Western Europe in 1940 that these countries were tied to the German economic sphere. Czechoslovakia, Poland, and Albania had, of course, already succumbed to German and Italian control in 1939. The outcome of the aggressive foreign policy followed by Germany in the second half of the 1930s was that Central and Eastern Europe became a part of the Nazi Lebensraum; during the war years, their economies were adjusted to the war needs of the Third Reich.
Hungary’s industrial development was determined by the fact that between 1938 and 1941, the territory of the country was enlarged in four different stages. With the reannexation of ethnically Hungarian Southern Slovakia (2 November 1938) and of Ruthenia (15 March 1939), and Northern Transylvania and Vojvodina (30 August 1940 and 11 April 1941), her territory increased from 93,000 to 172,000 sq. km. As a result of territorial enlargement, the population also increased from 9 to 14 million, which had a positive impact on employment. The accession of Southern Slovakia, Northern Transylvania, and Backa, also known as the Baranja Triangle, promoted the modification of Hungary’s economic structure.
Before the outbreak of World War II, Hungary experienced an economic boom. The Győr Programme, which was elaborated by Prime Minister Kálmán Darányi on 12 March 1938, became a Five-Year Rearmament Programme. According to the government’s concept, 1 billion pengő was to be invested over five years: 600 million pengő served direct military objectives; the remaining was to be given to heavy industry and transport. In the second half of the 1930s, the domestic accumulation of the country was 180 million pengő, thus the infrastructural and military investments contributed to industrial growth.
In 1939, the volume of industrial production was 22 per cent above the 1938 level. Between 1939 and 1940, the share of the armaments industry in total industrial production rose from 7.5 to 9.1 per cent. The role of iron, metal, and engineering industries was particularly important in industrial employment because their share increased to 40 per cent in 1940. After the attack on the Soviet Union on 22 June 1941, Germany relied on the industrial capacities of Hungary. The Germans, therefore, urged the increase of the production of bauxite and manganese ore, both essential to the war economy. During the war, Hungary’s bauxite production approximately doubled (it was 1 million tons in 1943); 90 per cent of it (900,000 tons) was delivered to Germany. Hungarian manganese-ore production also doubled; the amount exported to Germany was 60 per cent. To boost aluminium production in Hungary, considerable investments were made near Ajka, where a new power station was started in 1942, while bauxite was processed in Almásfüzítő near Komárom for transfer to the Manfred Weiss smelter in Budapest–Csepel. Further capacity was planned for Felsőgalla (Tatabánya) with an annual capacity of about 5,000 tons but it was not achieved until after the war. During World War II, Hungarian aluminium output increased rapidly, until it reached 13,200 tons in 1944.
A szövegrészlet Endre Domonkos: An Economic History of Hungary from 1867 című könyvéből származik.
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