Blockade of Germany (1939–1945)
The Blockade of Germany (1939–1945), also known as the Economic War, involved operations carried out during World War II by the British Empire and by France in order to restrict the supplies of minerals, fuel, metals, food and textiles needed by Nazi Germany – and later by Fascist Italy – in order to sustain their war efforts. The economic war consisted mainly of a naval blockade, which formed part of the wider Battle of the Atlantic, but also included the bombing of economically important targets and the preclusive buying of war materials from neutral countries in order to prevent their sale to the Axis powers.[1]
The blockade had four distinct phases:[1]
Second phase[edit]
Fall of France[edit]
The signing of the armistice with France in the Compiègne Forest on 24 June 1940 greatly changed the conditions of the Economic War. Hitler assumed control over the whole of Western Europe and Scandinavia (except for Sweden and Switzerland) from the north tip of Norway high above the Arctic Circle to the Pyrenees on the border with Spain, and from the River Bug in Poland to the English Channel. Germany established new airfields and U-boat bases all the way down the West Norwegian and European coasts.[8] On 30 June 1940 German occupation of the Channel Islands began. In early August Germans installed Dover Strait coastal guns.
From early July the German air force began attacking convoys in the English channel from its new bases and cross-channel guns shelled the Kentish coast in the opening stages of the Battle of Britain. On 17 August, following his inability to convince the British to make peace, Hitler announced a general blockade of the entire British Isles and gave the order to prepare for a full invasion of England codenamed Operation Sea Lion. On 1 August Italy, having joined the war, established a submarine base in Bordeaux. Its submarines were more suited to the Mediterranean, but they successfully ran the British gauntlet through the Straits of Gibraltar and joined the Atlantic blockade. On 20 August Benito Mussolini announced a blockade of all British ports in the Mediterranean, and over the next few months the region would experience a sharp increase in fighting.
Meanwhile, in Spain, which had still not recovered from her own civil war in which over one million died and which was in the grip of famine, General Francisco Franco continued to resist German attempts to persuade him to enter the war on the Axis side. Spain supplied Britain with iron ore from the Bay of Biscay, but, as a potential foe, she was a huge threat to British interests as she could easily restrict British naval access into the Mediterranean, either by shelling the Rock of Gibraltar or by allowing the Germans to lay siege to it from the mainland. Although Spain could gain the restoration of the rock itself and Catalonia under French administration, Franco could see Britain was far from defeated and that British forces backed by its huge powerful navy would occupy the Canary Islands. At this point Franco saw that the Royal Navy had reduced the German navy in Norway to an impotent surface threat, the Luftwaffe had lost the Battle of Britain, the Royal Navy had destroyed much of the French fleet at Mers-el-Kébir, had also destroyed Italian battleships at Taranto and the British Army was routing the Italian army in North & East Africa.[39] Franco continued to play for time. Franco made excessive demands of Hitler which he knew could not be satisfied as his personal price for participation, such as the ceding of most of Morocco and much of Algeria to Spain by France.[40] Operation Felix failed to materialise.
American opinion was shocked at the fall of France and the previous isolationist sentiment, which led to the Neutrality Acts from 1935 onwards, was slowly giving rise to a new realism. Roosevelt had already managed to negotiate an amendment to the acts on 21 September 1939, known as Cash and Carry, which though in theory maintained America's impartiality, blatantly favoured Britain and her Commonwealth. Under the new plan, weapons could now be bought by any belligerent providing they paid up front and took responsibility for delivery, but whereas Germany had virtually no foreign exchange and was unable to transport much material across the Atlantic, Britain had large reserves of gold and foreign currency, and while U-boats would be a threat, the likelihood was that her vast navy would ensure that the majority of equipment safely delivered to port.
Post-war[edit]
Following the end of the war in Europe in early May 1945, large parts of Europe lay completely smashed. Acute food, housing and medical shortages continued for some time and around 10 million refugees housed in temporary encampments or on the roads.
In the two emerging superpowers, Soviet Union and America, post-war productivity rose remarkably by 1948, although the reasons were very different. In Russia, great stimulus was given to emerging industries as a result of frenzied war production, helped in part by advanced industrial plants it took from the Soviet occupation zone of Germany after the war. America meanwhile, had been under severe depression in 1938, with vast industrial resources lying idle and 20% of the population unemployed. Rearmament, and later war brought these resources to life, which combined with rising investment and an intact infrastructure kept American industry buoyant, although considerable residual unemployment remained. Much the same situation existed in Canada, whose economy was closely tied to America, and who also suffered no fighting within its territory. The war changed the pattern of the international economy, leaving the US in a very strong bargaining position, having managed to free up international trade to its benefit as a consequence of Lend–Lease, and forcing the British to agree to currency convertibility.[83]
Britain's economy was badly hit by the abrupt ending of Lend-Lease a few days after the final defeat of Japan in August 1945. During the war Britain lost many of its lucrative export markets and now confronted an annual balance of payments deficit of £1.2billion.[13] As in World War I, Britain emerged from the war militarily triumphant but economically poorer (rationing did not end until 1953), and economist John Maynard Keynes was sent to America to negotiate a low-interest emergency loan of £3.75 billion to tide Britain over; the final repayment of £45.5m (then about $83m) was made on 31 December 2006.[84]
In the former occupied countries, severe inflation – caused in part by the large amount of money hoarded during the war, particularly by collaborators – caused further spiralling food prices and a persisting black market. A factor aggravating inflation was low productivity, caused in part by a lack of coal. France assumed it would become entitled to large volumes of German coal from the Ruhr as war reparations, but the Americans, who kept France and other countries going with a number of short-term loans and Marshall Aid, began to realise – correctly – that Europe needed the powerhouse German economy to restart growth and prevent the spread of communism, and refused to agree to reparations,[83] the very thing which led to German resentment after World War I and the rise of Hitler.
In Germany herself, the people were left to start again from almost nothing, partitioned into zones which became east and west Germany for many years by the Allied powers, a time sometimes referred to as Hour Zero. Although they faced a massive task, with whole cities to be rebuilt and industries reorganised to peaceful production, within a few years the West German economy achieved a miraculous turn-around, and by 1950 a Wirtschaftswunder (economic miracle) was being proclaimed.[85] From 1951 onwards, France, West Germany, Italy and the Benelux nations began moves towards the unification of Western Europe with the creation of the European Coal and Steel Community (ECSC), the forerunner to the Modern European Union. The ECSC created a common market to co-ordinate the supply of critical commodities to get the wheels of European commerce moving again. An explicit aim of the ECSC and its successors was to minimise risk of future intra-European war, due to the trading links and better knowledge of one another. In this, it has so far been 100% successful, with no two countries ever having waged war on one another while they were both members.
The German synthetic-oil programme was so successful and advanced that during the world fuel crisis of the 1970s, caused by conflict and uncertainty in the Middle East, large American industrial concerns such as Dow Chemical, Union Carbide and Diamond Shamrock began to reconsider the Nazi-era technology to see if it might provide a partial solution to their problems.[86] Some 300,000 documents relating to the history of the programme, including plant diagrams, patent descriptions, detailed reports on which catalysts and additives worked best, and monthly reports from the 25 oil from coal plants had fallen into American hands at the end of the war. At the time, crude oil was readily available at $2 per barrel, a fifth of the cost of man-made oil, and there was very little interest in the German documents. They remained in boxed storage at the National Archives in Washington for the next 30 years until chemical engineers began the arduous task of collating all the information and feeding it into a computer at the federally run Oak Ridge Energy Center. Although the US managed to secure alternative non-Arabian oil supplies – mainly from Venezuela – synthetic oils are widely used today, mainly in specialised areas such as the airline industry and as lubricants.