The Central European Economic Area before the Second World War

Abstract

The paper synoptically presents the formation and operation of the Central European economic area before the Second World War, in the case of the Habsburg Empire and its successors. The author ascertains that, after decades of integration processes, a uniform space developed within the empire which allowed a free flow of goods, capital and people. Inside the empire, a spontaneous distribution of economic activities took place, with the western parts becoming more advanced in industry than the eastern, which generated most of their income in agriculture. In spite of the disintegration of the empire and the prevalence of economic nationalisms in the successor states, the supplementary structure still determined the economic and commercial trends, although to a considerably lesser degree. A real turning point came with the Great Depression in the 1930s' when the Central European states shut themselves in and, each on its own, tried to find the way out of the crisis by strengthening protectionism. That was also the time when the economic trends were redirected. The Central European states effected the bulk of their foreign trade with Germany.