Comp. by: SSENDHAMIZHSELVAN
Stage: Proof
Chapter No.: 1
Title Name:
GEYERandTOOZE
Date:2/2/15
Time:14:35:34
Page Number: 46
imports amounted to only 5 per cent of GDP. Where Lend-Lease played a
crucial role was not in the early defensive battles, but in helping to sustain
the monumental series of counter-offensives that took the Red Army to
Berlin. For the last two years of the war 10 per cent of Soviet GDP was
being provided through foreign aid, amounting to as much as one-
fifth of the
total Soviet war effort.
On the German side, as the Blitzkrieg invasion of the Soviet Union
unravelled, Fritz Todt, who had headed Hitler
’s Ministry of Munitions since
early 1940, argued that Hitler must escape the vice of a two-front war by
opening peace talks with Stalin. But when Todt was killed in a mysterious
plane crash in February 1942, this call for diplomacy lost its most powerful
exponent. He was replaced by a coalition of loyalists wholly committed to
the Nazi war effort. The front man for this new team was Albert Speer,
Todt
’s charismatic replacement as Munitions Minister. The SS man Herbert
Backe, State Secretary in the Agricultural Ministry, took charge of mobilizing
the food economy of Europe. Gauleiter Fritz Sauckel organized the press
gangs that would bring foreign labour to Germany. Heinrich Himmler
’s SS
would act as enforcers. And Goering provided the necessary
figure-head.
Goebbels set up a special section in the Propaganda Ministry to publicize the
triumphs of the armaments miracle, which duly followed as labour and raw
materials were pumped into the armaments factories built since the mid-
1930
s and Germany bene
fited like the other combatants from the efficiencies
of mass production. Against the odds, this coalition would force the mobiliza-
tion of the German war economy down to the winter of 1944
–45. The
Wehrmacht would run out of room before it ran out of material. There
would be no repeat of the collapse of November 1918. They could in no way
alter the outcome. But the inferno in which Hitler choreographed his
regime
’s downfall would not burn out for lack of fuel.
Like the British and Soviet war efforts, the German war effort was a
multinational affair. In Italy, after a long lull between 1936 and 1940 arma-
ments expenditure surged, largely at the expense of private investment. But
Italy like the rest of occupied Europe was hobbled by chronic shortages of
oil, food and essential raw materials. From 1942, real mobilization gave way
to in
flation and disorganization. In the summer of 1943, in the weeks before
the collapse of Mussolini
’s regime, the black-market price of bread in Rome
was eight times the price of the of
ficial ration. Rice fetched ten times the
of
ficial price. And by 1943 the disintegration of the fascist regime was
symptomatic of dislocation making itself felt across the entire economy of
occupied Europe.
a d a m t o o z e a n d j a m e s r . m a r t i n
46
Comp. by: SSENDHAMIZHSELVAN
Stage: Proof
Chapter No.: 1
Title Name:
GEYERandTOOZE
Date:2/2/15
Time:14:35:34
Page Number: 47
In 1940 in the
flush of its Blitzkrieg victories, German Economics Minister
Funk had talked in bold terms about a new European currency system.
When asked to comment, Keynes remarked that it was best that he did not
reply because he objected to nothing in Funk
’s proposal, other than that
Germany stood at its centre. As it turned out, the fact that it was Nazi
Germany that stood at the centre did indeed make all the difference. From
1940
onwards the clearing accounts of the Reichsbank became the basis for a
massive system of exploitation. This did not burden all of Europe equally.
Allies such as Romania and Italy, Finland, Croatia and Bulgaria all bene
fited
from net imports from Germany even after the turning point on the Eastern
Front. So too did favoured occupied territories such as Norway. Even the
rump of Poland, the General Government, which was a major staging area
for the Wehrmacht
’s war with Russia, imported, according to the official
statistics, more from Germany than it delivered. By contrast, Denmark,
Holland, France, Belgium and even Serbia and Greece found themselves
on the end of highly one-sided trading relationships, making deliveries for
Germany and paying for the Wehrmacht occupation in exchange for Reich-
sbank credits that were never redeemed.
Overall, France made the largest contribution to the German war effort. In
1943
–44 French payments to Germany may have risen to as much as 55 per
cent of French GDP. In material terms the impact on the French population
was dramatic. In the cities of France the meat and fat rations in 1943 were half
what they had been in the
first year of the war and less than 20 per cent of
pre-war consumption. Even bread consumption was cut by 30 per cent. In
Belgium the miners digging coal for Germany went hungry. With the of
ficial
ration providing at most 1,500 calories per day, for city dwellers there was
no alternative but recourse to the dangerous and exorbitant black market
which by 1943 perhaps accounted for 20 per cent of French GDP. France and
Belgium were rich societies with deep reserves of wealth. In a poor and
import-dependent society the combined impact of the Allied blockade and
the Axis invasion was disastrous. The worst-case scenario was Greece, where
output collapsed by 70 per cent in 1941 and 1942, the Axis armies took what
they needed from the land and prices sky-rocketed. As a result, as many as
360
,000 people starved to death in Athens
–Piraeus and across the Greek
islands. Perhaps as many as one in twenty of the Greek population perished
in the famine.
The overall contribution of the occupied territories to the German war effort
was not comparable in quality to what the USA could supply to Britain. Oil,
steel and non-ferrous metals remained desperately short. But in quantitative
The economics of the war with Nazi Germany
47