Economic Aspects of the Danubian Plan

Abstract

T VHE economic misery of Europe, which has been especially evident in Central and Southeastern Europe since 1929, has been for several years a subject of discussion for statesmen and economists. Following the example of the United States, the European states believe that they can improve theit economic situation by strengthening the protectionist tariff systems. Recently the financial peril threatening the Danubian states again became of prime interest following the announcement of the French memorandum of March 2, 1932, proposing an economic group of the Danubian states. This French scheme, known as the Tardieu or Danubian plan, stresses the primary need of correcting the underlying economic situation of Czechoslovakia, Roumania, and Yugoslavia, as well as Austria and Hungary, on the assumption that the improvement of their economic depression is fundamental to and independent of the effects of the world-wide depression and must be met before any measures to tide over the crisis can be successful. These five states are invited to form an economic unit, granting preferential tariff rates to each other, though the plan of a federation or even a customs union is excluded. The reactions of the European and even of the overseas governments and of the press show the importance of the proposal, though nothing appreciably successful has thus far been achieved. Throughout the negotiations it was evident that the states concerned, the small as well as the big ones, cannot fully and completely isolate the political questions from the economic problems; in fact the political considerations seem always to loom as primary while the economic possibilities have been subordinated to a secondary position. The failure of the preliminary discussion seems to show that the present period does not lend itself favorably for the realization of any such plan. The world emphasizes more and more the extreme protectionist policy, quite contrary to the recommendations of the world economic conference of 1927. Such policy is easily understood from the viewpoints of the individual states, but absolutely incomprehensible from that of the world's economic crisis. If the economic structure of these Danubian countries, that is, of Czechoslovakia, Austria, Roumania, and Yugoslavia, is analyzed, it is seen that all these states are lands of medium-sized territories, none being strong enough politically or economically to dominate the others. In many respects these states are similar to each other, especially as regards the stage of economic and cultural development, and are connected by strong historical, cultural, and economic ties. Three of these states Czechoslovakia, Austria, and Hungary-do not have access to the sea; hence their geographical position preordains them to be largely dependent in their commercial relations on the rest of Central Europe. Conse-