The first decade of independence was not easy at all for Central and Eastern Europe. While struggling to establish stable political regimes, Central and Eastern European countries were also forced to bear the economic consequences of the collapse of the Russian and Austro-Hungarian empires. Their largely agrarian economies were burdened by the loss of former markets, hyperinflation and post-war recession. Consequently, nearly all of the Central and Eastern European states experienced economic collapse during the first years of independence. Lodz, the largest textile city in the region, suffered a 75 % drop in production when it lost its traditional Russian market. Losses in the Baltic countries were even greater as Russia had been the natural market for their industrial and agricultural products. Subsequent to their independence, they had to make inroads into hostile European markets that were themselves in recession.7 Nevertheless, significant reforms were introduced in all of the Central and Eastern European countries. Land reforms were passed, some of which were quite extensive, resulting in the break-up of large estates and the redistribution of their property. The first difficult years were followed by a decade of rapid growth in the economy, especially agricultural production, in terms of both quantity and quality. Monetary reforms were introduced in the 1920s and inflation was suppressed. Although Hungary and Poland experienced hyperinflation, other Central European countries stabilised their economies with less economic disruption. The pace of economic growth in Central and Eastern Europe gathered speed chiefly during the latter half of the 1930s.
Table 1
* Figure for 1937 is for undivided German Third Reich.
Source: Eva Ehrlich: Országok versenye 1937–1986. Budapest: Közgazdasági és Jogi Kiadó, 1991, 69.
This created good conditions for the overall modernisation of Central and Eastern Europe. The region was urbanised, some countries more so than others. Industrialisation assumed a more important economic role, although most countries in the region remained agricultural. Major steps were taken in the field of education: new schools were opened and the quality of teaching improved. As a result, illiteracy in Central Europe decreased rapidly. Science and culture developed in quantum leaps. Despite the number of problems to be resolved, achievements were clearly visible. Proof of these accomplishments is reflected by the fond memories of these years held by people who, during subsequent decades, were forced to live under the rule of Communism that renounced these past achievements. At the end of the 1930s, Central and Eastern European countries lagged somewhat behind Finland and Austria, on a par with Greece and Italy, but clearly ahead of Spain and Portugal on GDP per capita.8
Unfortunately, such successes could not conceal failings in other important areas. Democracies in Central Europe were weak and did not last long. Participation in politics was granted to new groups in society. Sadly, however, the political parties representing them were often weak and inexperienced. This led to perpetual political fighting, instability and growing uncertainty. Liberal democracy did not appear to be a very attractive model in this situation. People dreamed of ‘law and order’ and this was promised by different authoritarian rulers. Political liberties were restricted, while parliaments and political parties were dissolved. The first coup of this kind was organised in Poland in 1926 by J. Pilsudski. Shortly thereafter, a coup was staged in Lithuania and in the 1930s, many other countries moved from democracy to autocracy. In some Central and Eastern European countries, Western democracy was actually never founded. One shining exception to this was democratic Czechoslovakia, although it also had national problems to resolve. The authoritarian regimes in Central and Eastern Europe cannot, of course, be compared with Fascism in Italy or Nazism in Germany. There were no concentration camps, there was no mass terror and society was not entirely controlled by the state. Moreover, although some political leaders used Fascist rhetoric, the masses were not influenced by it. Compared to the real totalitarian states in the East or the West, Central and Eastern Europe remained safe and stable, continuing to live under the rule of law and enjoying basic civic freedoms.9
The other failing of the Central and Eastern European countries was their inability to coordinate their defence and foreign policies. The concept of the ‘cordon sanitaire’, conceived of as a belt of states holding off Soviet Russia, was not consistently pursued. First, the danger of Communism was underestimated. The world passively looked the other way as the Communist regime waged massive campaigns of terror against its own people, annihilating most of the educated class in Russia, transporting peasants to Siberia during forced deportations, starving to death six to seven million people in the Ukraine during ‘Golodomor’ and repressing millions of people, including entire national groups, during the ‘Great Terror’ of 1937–1938.10 All this would also happen in Central and Eastern Europe. Hitler and the Nazis were similarly underestimated. The immediate consequence of this failure became apparent in the 1930s, when Eastern and Central Europe found itself in the eye of a gathering storm. With Hitler on one side and Stalin on the other, its leaders tried to find ways to protect their independence. This was particularly difficult due to Western Europe’s lack of interest in anything situated east of Germany. In the end, East European countries were considered ‘faraway countries about which we know little’ by Western leaders like Neville Chamberlain.11
Map 3
Central and Eastern Europe during the Second World War
All these misgivings and problems were not very different from the problems of the ‘old’ European states. Public opinion often tends to consider the initial period of independence in Central and Eastern European states to have been a failure. This is unfair. Western democracies also collapsed under the onslaught of totalitarian powers. Internal problems and mistakes were not the main reasons for Central and Eastern European states’ loss of independence. Rather, the tragedy of Central and Eastern Europe was the result of the establishment of totalitarian dictatorships and the inability of European nations to curtail their expansion. Thus, Central and Eastern Europe followed the path of most other European countries in the interim between the wars. During the 1930s, hardly a year passed when one country or another did not see its democratic constitution violated by a dictator or authoritarian leader. It should be remembered that prior to the Second World War, even the least democratic countries in Central and Eastern Europe were more democratic than Western European countries like Germany, Italy or Spain. So there was unity in good and in bad. Mentally and culturally, Central and Eastern Europe was a normal part of Europe. Unfortunately, the political divisions did not respect the region’s cultural roots. During the Second World War, Europe was cut to pieces and divided for the next half century.
Between two evils: Central and Eastern Europe during the Second World War
One of the tragedies of the modern world is that after the First World War, European democracies were in poor shape to meet the challenges presented by two totalitarian systems: Communism and Nazism. Although these two systems differed in some ways, their ideologies were similar and, crucially, they had a common enemy – Western democracies.12 Both Nazism and Communism lacked any semblance of ethics and morality, as was evident in the unscrupulous tactics employed in their attempts to destroy democratic governments in the West. Unfortunately, the European states were absorbed with their own affairs after the First World War, thus providing dictators with the time and space