Twenty-Five Lectures on Modern Balkan History

Twenty-FIve Lectures on Modern Balkan History (The Balkans in the Age of Nationalism). List of lectures. – Humanities Commons (hcommons.org)

Lecture 18: Balkan politics drifts to the Right

Introduction

Ethnic minorities remained an insoluble problem for the interwar Balkans, in part because imported Western European and American ideas about ethnically homogeneous nation-states were poorly suited to deal with Balkan conditions. Balkan efforts to imitate Western-style parliamentary governments and capitalist economies also failed during the interwar period, again because of the discrepancy between assumptions and realities.

As influential elements in Balkan societies grew impatient with moderate ideologies, the Balkan states experienced a political drift to the Right. Authoritarian regimes came to power because liberal and parliamentary approaches failed to solve the problems of national minorities and economic backwardness. Of course, authoritarian regimes did no better in the long run, but this was not immediately apparent.

Economic weakness

Knowledge of the region’s economic ills helps explain political events.We can point to eight areas in which the interwar states faced intertwined social and economic problems.

First, wartime damage and losses were enormous and left the Balkan economies hurting. In Western Europe, most of the terrible losses were confined to men in uniform and the narrow strip of land involved in trench warfare. Fighting and damage covered much more of the Balkan landscape, and more civilians were among the casualties.

Bulgaria lost 110,000 soldiers killed in a population of 5 million, after having had 50,000 men killed during the Balkan Wars. For each battlefield death, typically another three men were wounded. 275,000 Bulgarian civilians died of disease and malnutrition during the war.

Serbia and Montenegro had a combined population of 5 million and suffered 300,000 soldiers killed. 500,000 civilians died. Another 150,000 South Slav soldiers (including Croats and Slovenes) were killed fighting for Austria-Hungary.

23,000 Greek soldiers died as well as 130,000 civilians, some of whom starved during the Allied blockade against the royalist regime. Hundreds of Greek merchant ships were lost to German submarine attacks.

Romania lost 336,000 soldiers to combat and disease, along with another 275,000 Romanian civilians.

Economic resources were destroyed, including livestock that was a key resource for transportation, plowing, fertilizer and meat, dairy, wool and leather products. In Yugoslavia, the number of cattle fell by a quarter, horses were reduced by a third, and pigs, goats and sheep by about half. Romania lost a third of its livestock and agricultural equipment: Romanian grain exports in 1919 were half of prewar levels. Some rural Balkan areas were still recovering from World War I when World War II began twenty years later.

Second, the centralization of the wartime economies fostered bad habits and bureaucratic structures that interfered with market forces. The revolutions of the 1800s had removed some old-fashioned — even medieval — obstacles to economic growth, such as excessive taxation, peasant dependency and inefficient official monopolies. The war undid many of these achievements. During the war economic activities again were directed from the top with little reference to local needs. Military authorities took control of investment and production decisions in factories, farms and mines, a system that  David Mitrany called “military state socialism.” Captured enemy assets were expropriated or even physically removed. In their own countries, the demands of the military led to shortages for civilians. For example, landowners were forced to grow specific crops to counter the shortage of vegetable oils, and farm machinery and labor were transferred from district to district, leaving some regions without the resources they needed to run farms. Crop production in those districts fell: for example, Bulgarian grain production in 1918 had fallen 60 percent from 1914 levels.

Third, this kind of command economy undercut newly-won civil and political rights. Rural dwellers found themselves forced to donate unpaid labor to local authorities. Steel, chemical and oil cartels exercised similar arbitrary control in urban areas. Such acts eroded trust in the state administration, while citizens had few remedies, thanks to martial law and wartime censorship.

Fourth, even the fruits of victory caused economic dislocations, when the winners had to assimilate whole new provinces and millions of new citizens. Small state bureaucracies were overwhelmed. Yugoslavia was now three times the size of Serbia, with a population that more than doubled. Romania experienced similar growth. The new borders in the region distorted pre-war trading patterns and transportation systems. The breakup of Austria-Hungary, for example, separated industries and resources that had prospered together in a large country without customs barriers. Central factory cities like Budapest lost access to mines and agricultural products. Factories closed, while miners and peasants had trouble finding new factories to accept their produce. Both the absolute decrease in production and the new borders curtailed international trade. In 1921, Hungary exported flour at a third of the pre-war level, livestock at a fifth, industrial goods at about half. Romanian postwar imports were a third of old levels, and exports only 3 percent. In Bulgaria in 1920, imports had fallen by two-thirds, exports by half.

Fifth, the war caused inflation thanks to excess printing of banknotes to cover wartime costs, reduced confidence in the postwar Balkan economy and wartime borrowing that doubled or tripled state debts. Hungarian money was worth 40 percent of its pre-war value in 1918, and only 15 percent in 1919. This was followed by hyper-inflation: a Swiss franc, worth 2 and a quarter florints in 1914, bought 18,000 florints in 1924. In Romania, the lei stabilized in the middle 1920s at 2 percent of its pre-war value. Before the war, the Bulgarian leva was traded at par with the Swiss franc; in 1924 one franc bought 2,500 levas. As a result, banks and individuals lost their savings.

Sixth, when wartime sacrifices by peasants forced postwar regimes to institute land reforms, the common result was reduced agricultural productivity. In the interwar period, the population of the Balkans rose because of reduced infant mortality rates and new American legal restrictions halting immigration, which had functioned as an escape valve. Balkan industry was still too weak to absorb surplus rural residents. By the 1930s, an estimated 61 percent of the Yugoslav rural population was superfluous: that is, the same amount of work could have been accomplished if they had not existed. For Bulgaria, the figure was 53 percent; for Romania, it was 52 percent.

Despite the low productivity of small farms run by peasant families, some Balkan regimes supported them for political reasons and applied land reform measures to break up large estates expropriated after the war, in areas like Bosnia-Hercegovina and Croatia. The average size of a Yugoslav farm was barely 5 hectares (12-13 acres), the minimum viable size. Macedonian, Bosnian and Dalmatian farms were even smaller. Subsistence farming remained the rule on these tiny farms, with few crops produced for export or sale to industry. Farmers were too poor to afford tractors, metal plows or chemical fertilizer, and this kept the agricultural yield low. Internal commerce also suffered: most peasants were too poor to buy consumer goods. Post-war land reform created similar conditions for Romanian peasants.

Seventh, the proportion of population employed in industry remained small. In Britain, 37 percent of the population worked in industry on the eve of World War II. Hungary had the highest Balkan proportion at 23 percent; the figure was 11 percent in Yugoslavia, 8 percent in Bulgaria, and 7 percent in Romania. While there was some industrial expansion, too much involved light industries like food processing and textiles. Income from light industrial goods was low, depressing the value of industrial output per capita. This figure was $140 per capita in 1938 in Great Britain; in the Balkans, Hungary had the highest figure at $26 per capita, Romania the lowest at $12 per capita. Figures for national income were comparable: $440 per capita for Britain, $120 in Hungary, and between $75 and $81 elsewhere in southeastern Europe.

Eighth and finally, the Great Depression made matters worse. As nations tried to protect domestic industries from foreign competitors, protectionist policies spread but backfired. Higher tariffs and higher prices reduced foreign demand for Balkan agricultural exports. Romanian grain exports fell by 73 percent from 1929 to 1934; across the Balkans, total export levels fell to 40 percent of their 1929 level.

With the drop in revenue, the Balkan states found themselves hard pressed to repay foreign loans incurred in the 1920s. Borrowed money generally had been wasted on government office buildings and armaments: only 20 percent went to build up industry. Debt now opened the Balkan states to foreign control. Nazi Germany was the big winner. As one example, in 1934 Germany agreed to buy Hungarian agricultural goods at an attractive subsidized rate, but in return Hungary had to open its border to German industrial goods. Similiar treaties followed with other states. Such arrangements made the Balkan states into economic colonies and gave Germany tremendous leverage. In 1929 Germany took in 30 percent of Bulgaria’s exports and accounted for 22 percent of Bulgarian imports. By 1939 those figures were 71 percent and 69 percent. Such conditions made it hard for the Balkan states to avoid becoming German satellites during the war.

Rise of authoritarian regimes

These economic hardships would have taxed the most unified of states. The Balkan states also faced ethnic divisions. Lacking deep parliamentary traditions and experience with political compromise, Balkan authorities often reacted to instability and differences of opinion by retreating into authoritarianism. Traditional political and economic elites supported this trend, never having liked sharing power under democratic experiments.

Lectures 13 and 14 introduced the way in which Serbian and Greek nationalism affected interwar politics. In Yugoslavia, the Croatian wish for federalism was never reconciled with Great Serbian nationalism. After the assassination of Croatia’s leading politician in 1929, King Alexander gave up trying to rule by consensus and imposed a royal dictatorship that lasted until World War II.

In Greece, the tension between Royalists and Venizelists destroyed the political process. Elections were rigged, and the Constitution repeatedly rewritten to serve the party in power. In 1936, General Metaxas and the army ended political turmil by imposing a military dictatorship with the backing of King George II.

Similar trends were at work in Hungary, Romania and Bulgaria. Two of those states developed domestic versions of fascism, the most extreme expression of the political drift to the Right.

Hungary

After the fall of the Hungarian Soviet Republic, the former Austro-Hungarian Admiral Miklos Horthy became Regent, a convenient device that left him free of superior authority since neither the Allies nor the Magyars would accept a return of the Habsburg royal family. Hungary managed to combined royal authority with military power-brokering. Hungary had lost its ethnic minorities and the Left was destroyed after the Kun regime: after 1919 the Right faced few challengers. In the 1920s, a conservative coalition combined “revisionism” in foreign policy (the return of lost lands) with domestic measures that favored the rich. Most large estates were unaffected by a sham land reform in 1920. In 1922 a quarter of the voters lost their right to vote and secret ballots were abolished. By intimidating rural voters, the so-called Government Party won consistent victories after that. The old Magyar elites retained power by these devices until 1944.

Bulgaria

Bulgaria might have escaped the usual turmoil, thanks to its stable peasant economy and the absence of large ethnic minorities. However, two elements led to crises and authoritarianism: rural-urban tensions and terrorism among Macedonian refugees.

After World War I, a reform-oriented party called the Bulgarian Agrarian National Union (B.A.N.U.) came to power. Agrarianism was a Balkan offshoot of socialism, adjusted to accomodate the primacy of peasant agriculture in countries that lacked an industrial working class. Under prime minister Alexander Stamboliski, BANU was in power from 1919-1923. BANU favored land reform, rural tax relief, public works and farm cooperatives.

However, Stamboliski combined these economic goals with a so-called “estatist” political philosophy that verged on a one-party dictatorship and frightened powerful social and political forces, especially in the cities. Land and tax reforms antagonized the rich. Court reforms reduced the income of attorneys. Military officers feared plans for disarmament and a scheme to replace the army with BANU’s paramilitary “Orange Guard” militia and a labor draft.

Like many peasants, Stamboliski despised urban life and politicians, lawyers, journalists and merchants, whom he called social “parasites.” Stamboliski harassed and arrested rival politicians to get his way. He closed the university, curtailed freedom of the press and let Orange Guard thugs beat up his rivals. In the 1923 election, BANU won 212 out of 245 assembly seats. Fearing a real dictatorship, a conspiracy of army officers, right-wing intellectuals and Macedonian nationalists seized the capital, murdered Stamboliski and put an end to significant Agrarian influence.

Macedonian refugees were the other destabilizing force in Bulgarian politics thanks to IMRO, the terrorist arm of the Macedonian revolutionary movement. Bulgaria emerged from defeat in the Balkan Wars with only 10 percent of Macedonia, but embittered refugees made up half the population of Sofia. From bases in Bulgaria, IMRO comitadjis raided the Yugoslav parts of Macedonia. IMRO was too weak to defeat Yugoslavia, but too strong to be controlled by Bulgaria. When Stamboliski tried to curtail raids, IMRO thugs joined the military coup of 1923, beheaded the prime minister and killed thousands of his supporters. Later right-wing governments tolerated IMRO until it degenerated into a criminal gang that supported itself through contract murders and drug smuggling. In 1934, reformist army officers suppressed IMRO. However, there was no return to parliamentary rule: in 1935 King Boris suspended the constitution and set up a royal dictatorship which lasted until WWII.

Romania

Unlike Hungary and Bulgaria, Romania was a victor in 1918: there was no revolution to dislodge traditional authorities and the peasant masses remained without access to power. Belated land reforms in 1918 and 1921 distributed 9 million acres to one and a half million peasant families. This was a political success for the ruling Liberal party, but an economic mistake. Most peasant farms were still too small to be profitable or efficient. In the 1930s, the National Peasant Party emerged as a rival of the Liberals, but the Great Depression left the state with too few resources for meaningful economic action. King Carol II was able to exploit splits within the parties and dominated politics in the 1930s by coopting key leaders; for all practical purposes, the king ruled.

Fascism in the Balkans

The authoritarian governments of the interwar Balkans had clear roots in nineteenth century political groups but there was also a new, radical right wing in the Balkans. Discussions of Fascism in Europe often ignore its development in Hungary and Romania: by leaving out those movements, such discussions overlook not only crucial aspects of Balkan history, but facts that enrich and complicate our analysis of Fascism in general.

Most definitions of Fascism include these elements:

• Fascism is a mass movement.
• Fascism is nationalist and patriotic: it subordinates the needs of the individual to the needs of the national community.
• Despite its character as a movement of mass participation, control flows from the top down in Fascism, usually from a charismatic figure.
• Fascism is anti-parliamentary, anti-democratic and even anti-political, because Fascism depicts a world of absolute values in which debate and compromise lose their validity as political tools.
• Fascism replaces compromise with violence and “final solutions” for difficult issues.

In addition, fascism is generally described as a movement that has specific enemies:

• Fascism is anti-Communist, a response to perceived threats from working-class socialism.
• Fascism is also anti-capitalist, a response to fear of big banks, department stores and factory-produced goods. For both of these reasons, fascism is rooted in the lower middle class, which suffers threats from both socialism and capitalism.
• Fascism is racist and often anti-Semitic. Ethnic nationalism rejects minority groups. The Jews in particular also suffer from their mythical identification with both Bolshevism and capitalism.

Balkan fascism forces serious reexamination of one common assertion: the middle-class nature of fascism.

Hungary

Fascism in Hungary begins with the end of World War I. The lower middle-class was not the core of Hungarian ultra-nationalism: many middle-class Hungarians were not ethnic Magyars. Instead, army officers, civil servants and the landed gentry supported fascism. After the defeat of 1918, these groups were poorer and less important. Bela Kun’s Soviet Republic also threatened to take away their property and their jobs. After lives of privilege, such men lacked the inclination or skills to assume new jobs in business. In 1919, they led the “White Terror” that suppressed the Left. When political reaction failed to restore their careers, they blamed bankers, industrialists, large landowners and Jews. Most were also “revisionists:” they sought a restoration of Hungary’s lost provinces.

The Great Depression increased the appeal of fascism by increasing social and economic dislocation among the unemployed, including university graduates. In 1931, a fascist became Premier. Gyula (Julius) Gombos was a former army officer, a leader in the White Terror, founder in 1923 of the so-called Race-Protecting Party and an admirer of Mussolini and Hitler. From 1931-1935, Gombos sought the support of racist secret societies, unemployed youths, ex-officers and revisionists, meanwhile accepting political donations from Jewish industrialists if they were Magyarized and patriotic. Gombos died in 1935. Despite his fascist rhetoric, his actual political course was that of an opportunist.

Even more radical forces then emerged. The Arrow Cross movement was led by Ferenc (Francis) Szalasi, a Magyarized Ruthenian-Armenian and former army officer. He espoused “Hungarism,” a plan for a national socialist welfare state and a Balkan federation under Magyar leadership. Arrow Cross rhetoric involved revisionism and anti-Semitism. Political, not economic, dissatisfaction drove Hungarian fascism, which grew stronger even as the Depression waned. Party power peaked in 1939: although the electoral system awarded Arrow Cross only 10 percent of the seats in Parliament, the party and its allies got three-eighths of the popular vote.

The aristocrats of the Horthy regime rejected Arrow Cross’s truly radical proposals for land reform and better working-class conditions. From 1938-1940, Szalasi was in prison for subversive activity. While the rise of Hitler made fascism more acceptable to influential Hungarians, Arrow Cross was unable to achieve power. When Hungary became a German ally, Hitler chose to work with the traditional elite, rather than the unstable and inexperienced radicals. When Hungary tried to leave the war in 1944, Hitler installed an Arrow Cross puppet dictatorship but the country was soon overrun by the Russians. It took the power of the Red Army to finally break the conservative hold on power in Hungary, a conservatism built on access to official privilege rather than property.

Romania

Romanian fascism was anti-urban, anti-capitalist, anti-Russian and anti-Semitic. Starting in rural areas, it grew thanks to support from the same kind of displaced elements at work in Hungary, and support from the King, who needed allies to support his dictatorship, even if they were unsavory and violent.

Romanian fascism was rooted in peasant misery. 70 percent of the interwar population still lived by peasant agriculture. Post-war land reforms left three-fourths of Romanian farms too small to support their owners. Romania had Europe’s highest death rate, highest infant mortality rate and second highest incidence of tuberculosis. Half the population was illiterate.

Peasants mistrusted banks, merchants, bureaucrats, foreigners and cities. As a foreign, urban and commercial class, Jews epitomized everything peasants feared, and Romanian facism was virulently anti-Semitic. After centuries of foreign rule, Romanian fascism was also xenophobic: old fears of Russia easily combined with new fears of Russian Communism after 1917.

The largest fascist group was the Legion of the Archangel Michael, also called the Iron Guard. The Legion was founded in 1927 in Jassy, a Moldavian city near Bolshevik Russia and in the heart of Romania’s Jewish districts. The founder, Corneliu Codreanu, began his political career in the Association of Christian Students, a group that embraced totalitarian, reformist, nationalist, anti-Semitic and mystic religious ideas. In 1923 he founded the League of National Christian Defence, then was briefly jailed for his role in the murder of a fellow-student. In jail he had a vision of the Archangel Michael, an important element in the Iron Guard’s messianic tone. In 1926 Codreanu murdered a prefect of police, but was acquitted thanks to a climate of nationalist excess that winked at offenses committed by “patriots.”

Like his supporters among the peasants and village priests, the charismatic Codreanu mistrusted political parties and written programs. Young legionnaires engaged in an active “propaganda of work and deed,” bringing in the harvest, building dams and murdering suspicious Jews and bureaucrats. Until the Great Depression the Legion was a minor party, but grew until it took 16 percent of the vote in the 1937 elections.

This unexpected success led to the Legion’s downfall. King Carol II had tolerated a weak Legion as a potential tool against his enemies, but suppressed it as soon as its strength made the Legion into a potential rival. The leaders including Codreanu were arrested and then mysteriously died in jail, “shot while attempting to escape.” After this, the Iron Guard wasted its assets in violent street fighting against the government, as singing legionnaires marched arm in arm into the face of machine-gun fire. After 1938, the Legion ceased to be a major factor, never having come fully to terms with the modern society so mistrusted by its rural backers.

Conclusion

Social dislocations, economic hard times and a lack of commitment to parliamentary rule all promoted the drift to the Right among the Balkan states during the interwar period. Reformers were unable to muster the resources to overcome entrenched elites, and often lacked political skills or sound plans. Change too often led to conflict, and Balkan authorities viewed conflict with deep mistrust. On the eve of World War II, every country had retreated into authoritarianism, leaving deep problems unsolved at a time of coming crisis.  

This lecture is a portion of a larger set of texts, Twenty-Five Lectures on Modern Balkan History (The Balkans in the Age of Nationalism). 

This page created on 30 April 1997; last modified 17 January 2023.

Copyright 1996 by Steven W. Sowards