2 2. 1929-1939 Great Depression.

The Great Depression has Struck Europe.

The Occurrence of the Depression in Europe has been Issued.

In France, The crisis affected France a bit later than other countries, hitting hard around 1931. While the 1920s grew at the very strong rate of 4.43% per year, the 1930s rate fell to only 0.63%.

The depression was relatively mild: unemployment peaked under 5%, the fall in production was at most 20% below the 1929 output; there was no banking crisis.

However, the depression had drastic effects on the local economy, and partly explains the February 6, 1934 riots and even more the formation of the Popular Front, led by SFIO socialist leader Léon Blum, which won the elections in 1936. Ultra-nationalist groups also saw increased popularity, although democracy prevailed into World War II.

France's relatively high degree of self-sufficiency meant the damage was considerably less than in nations like Germany.

The Great Depression hit Germany hard. The impact of the Wall Street Crash forced American banks to end the new loans that had been funding the repayments under the Dawes Plan and the Young Plan. The financial crisis escalated out of control and mid-1931, starting with the collapse of the Credit Anstalt in Vienna in May. This put heavy pressure on Germany, which was already in political turmoil with the rise in violence of Nazi and communist movements, as well as with investor nervousness at harsh government financial policies. Investors withdrew their short-term money from Germany, as confidence spiraled downward. The Reichsbank lost 150 million marks in the first week of June, 540 million in the second, and 150 million in two days, June 19–20. Collapse was at hand. U.S. President Herbert Hoover called for a moratorium on Payment of war reparations. This angered Paris, which depended on a steady flow of German payments, but it slowed the crisis down and the moratorium, was agreed to in July 1931. An international conference in London later in July produced no agreements but on August 19 a standstill agreement froze Germany's foreign liabilities for six months. Germany received emergency funding from private banks in New York as well as the Bank of International Settlements and the Bank of England. The funding only slowed the process. Industrial failures began in Germany, a major bank closed in July and a two-day holiday for all German banks was declared. Business failures became more frequent in July, and spread to Romania and Hungary.

In 1932, 90% of German reparation payments were cancelled. (In the 1950s, Germany repaid all its missed reparations debts.) Widespread unemployment reached 25% as every sector was hurt. The government did not increase government spending to deal with Germany's growing crisis, as they were afraid that a high-spending policy could lead to a return of the hyperinflation that had affected Germany in 1923. Germany's Weimar Republic was hit hard by the depression, as American loans to help rebuild the German economy now stopped.[126] The unemployment rate reached nearly 30% in 1932, bolstering support for the Nazi (NSDAP) and Communist (KPD) parties, causing the collapse of the politically centrist Social Democratic Party. Hitler ran for the Presidency in 1932, and while he lost to the incumbent Hindenburg in the election, it marked a point during which both Nazi Party and the Communist parties rose in the years following the crash to altogether possess a Reichstag majority following the general election in July 1932.

Hitler followed an autarky economic policy, creating a network of client states and economic allies in central Europe and Latin America. By cutting wages and taking control of labor unions, plus public works spending, unemployment fell significantly by 1935. Large-scale military spending played a major role in the recovery.

The reverberations of the Great Depression hit Greece in 1932. The Bank of Greece tried to adopt deflationary policies to stave off the crises that were going on in other countries, but these largely failed. For a brief period, the drachma was pegged to the U.S. dollar, but this was unsustainable given the country's large trade deficit and the only long-term effects of this were Greece's foreign exchange reserves being almost totally wiped out in 1932. Remittances from abroad declined sharply and the value of the drachma began to plummet from 77 drachmas to the dollar in March 1931 to 111 drachmas to the dollar in April, 1931. This was especially harmful to Greece as the country relied on imports from the UK, France and the Middle East for many necessities. Greece went off the gold standard in April, 1932 and declared a moratorium on all interest payments. The country also adopted protectionist policies such as import quotas, which a number of European countries did during the time period.

Protectionist policies coupled with a weak drachma, stifling imports, allowed Greek industry to expand during the Great Depression. In 1939, the Greek industrial output was 179% that of 1928. These industries were for the most part "built on sand" as one report of the Bank of Greece put it, as without massive protection they would not have been able to survive. Despite the global depression, Greece managed to suffer comparatively little, averaging an average growth rate of 3.5% from 1932 to 1939. The dictatorial regime of Ioannis Metaxas took over the Greek government in 1936, and economic growth was strong in the years leading up to the Second World War.

The Great Depression hit Italy very hard. As industries came close to failure they were bought out by the banks in a largely illusionary bail-out—the assets used to fund the purchases were largely worthless. This led to a financial crisis peaking in 1932 and major government intervention. The Industrial Reconstruction Institute (IRI) was formed in January 1933 and took control of the bank-owned companies, suddenly giving Italy the largest state-owned industrial sector in Europe (excluding the USSR). IRI did rather well with its new responsibilities—restructuring, modernising and rationalising as much as it could. It was a significant factor in post-1945 development. But it took the Italian economy until 1935 to recover the manufacturing levels of 1930—a position that was only 60% better than that of 1913.

From roughly 1931 to 1937, the Netherlands suffered a deep and exceptionally long depression. This depression was partly caused by the after-effects of the Stock Market Crash of 1929 in the US, and partly by internal factors in the Netherlands. Government policy, especially the very late dropping of the Gold Standard, played a role in prolonging the depression. The Great Depression in the Netherlands led to some political instability and riots, and can be linked to the rise of the Dutch national-socialist party NSB. The depression in the Netherlands eased off somewhat at the end of 1936, when the government finally dropped the Gold Standard, but real economic stability did not return until after World War II.

Already under the rule of a dictatorial junta, the Ditadura Nacional, Portugal suffered no turbulent political effects of the Depression, although António de Oliveira Salazar, already appointed Minister of Finance in 1928 greatly expanded his powers and in 1932 rose to Prime Minister of Portugal to found the Estado Novo, an authoritarian corporatist dictatorship. With the budget balanced in 1929, the effects of the depression were relaxed through harsh measures towards budget balance and autarky, causing social discontent but stability and, eventually, an impressive economic growth.

Spain had a relatively isolated economy, with high protective tariffs and was not one of the main countries affected by the Depression. The banking system held up well, as did agriculture.

By far the most serious negative impact came after 1936 from the heavy destruction of infrastructure and manpower by the civil war, 1936–39. Many talented workers were forced into permanent exile. By staying neutral in the Second World War, and selling to both sides, the economy avoided further disasters.

By the 1930s, Sweden had what America's Life magazine called in 1938 the "world's highest standard of living". Sweden was also the first country worldwide to recover completely from the Great Depression. Taking place in the midst of a short-lived government and a less-than-a-decade old Swedish democracy, events such as those surrounding Ivar Kreuger (who eventually committed suicide) remain infamous in Swedish history. The Social Democrats under Per Albin Hansson formed their first long-lived government in 1932 based on strong interventionist and welfare state policies, monopolizing the office of Prime Minister until 1976 with the sole and short-lived exception of Axel Pehrsson-Bramstorp's "summer cabinet" in 1936. During forty years of hegemony, it was the most successful political party in the history of Western liberal democracy.

The World Depression broke at a time when the United Kingdom had still not fully recovered from the effects of the First World War more than a decade earlier. The country was driven off the gold standard in 1931.

The world financial crisis began to overwhelm Britain in 1931; investors across the world started withdrawing their gold from London at the rate of £2.5 million per day. Credits of £25 millions each from the Bank of France and the Federal Reserve Bank of New York and an issue of £15 millions fiduciary note slowed, but did not reverse the British crisis. The financial crisis now caused a major political crisis in Britain in August 1931. With deficits mounting, the bankers demanded a balanced budget; the divided cabinet of Prime Minister Ramsay MacDonald's Labour government agreed; it proposed to raise taxes, cut spending and most controversially, to cut unemployment benefits by 20%. The attack on welfare was totally unacceptable to the Labour movement. MacDonald wanted to resign, but King George V insisted he remain and form an all-party coalition "National Government". The Conservative and Liberals parties signed on, along with a small cadre of Labour, but the vast majority of Labour leaders denounced MacDonald as a traitor for leading the new government. Britain went off the gold standard, and suffered relatively less than other major countries in the Great Depression. In the 1931 British election, the Labour Party was virtually destroyed, leaving MacDonald as Prime Minister for a largely Conservative coalition.

The effects on the northern industrial areas of Britain were immediate and devastating, as demand for traditional industrial products collapsed. By the end of 1930 unemployment had more than doubled from 1 million to 2.5 million (20% of the insured workforce), and exports had fallen in value by 50%. In 1933, 30% of Glaswegians were unemployed due to the severe decline in heavy industry. In some towns and cities in the north east, unemployment reached as high as 70% as shipbuilding fell by 90%. The National Hunger March of September–October 1932 was the largest of a series of hunger marches in Britain in the 1920s and 1930s. About 200,000 unemployed men were sent to the work camps, which continued in operation until 1939.

In the less industrial Midlands and Southern England, the effects were short-lived and the later 1930s were a prosperous time. Growth in modern manufacture of electrical goods and a boom in the motor car industry was helped by a growing southern population and an expanding middle class. Agriculture also saw a boom during this period.

Spanish Civil War

The Spanish Civil War was a civil war in Spain fought from 1936 to 1939. Republicans loyal to the elected, left-leaning Second Spanish Republic, in alliance with anarchists, fought against a revolt by the Nationalists, an alliance of Falangists, monarchists, conservatives and Catholics, led by a military group among whom General Francisco Franco soon achieved a preponderant role. Due to the international political climate at the time, the war had many facets, and was variously viewed as class struggle, a war of religion, a struggle between dictatorship and republican democracy, between revolution and counterrevolution, between fascism and communism. It has been frequently called the "dress rehearsal" for World War II.

The Nationalists won the war, which ended in early 1939, and ruled Spain until Franco's death in November 1975.

The war began after a pronunciamiento (a declaration of military opposition) against the Republican government by a group of generals of the Spanish Republican Armed Forces, originally under the leadership of José Sanjurjo. The government at the time was a moderate, liberal coalition of Republicans, supported in the Cortes by communist and socialist parties, under the leadership of centre-left President Manuel Azaña. The Nationalist group was supported by a number of conservative groups, including the Spanish Confederation of Autonomous Right-wing Groups CEDA, monarchists, including both the opposing Alfonsists and the religious conservative Carlists, and the FE y de las JONS, a fascist political party. Sanjurjo was killed in an aircraft accident while attempting to return from exile in Portugal, whereupon Franco emerged as the leader of the Nationalists.

The coup was supported by military units in the Spanish protectorate in Morocco, Pamplona, Burgos, Zaragoza, Valladolid, Cádiz, Córdoba, and Seville. However, rebelling units in some important cities—such as Madrid, Barcelona, Valencia, Bilbao, and Málaga—did not gain control, and those cities remained under the control of the government. Spain was thus left militarily and politically divided. The Nationalists and the Republican government fought for control of the country. The Nationalist forces received munitions, soldiers, and air support from Nazi Germany and Fascist Italy, while the Republican side received support from the Soviet Union and Mexico. Other countries, such as the United Kingdom, France, and the United States, continued to recognize the Republican government, but followed an official policy of non-intervention. Notwithstanding this policy, tens of thousands of citizens from non-interventionist countries directly participated in the conflict. They fought mostly in the pro-Republican International Brigades, which also included several thousand exiles from pro-Nationalist regimes.

The Nationalists advanced from their strongholds in the south and west, capturing most of Spain's northern coastline in 1937. They also besieged Madrid and the area to its south and west for much of the war. After much of Catalonia was captured in 1938 and 1939, and Madrid cut off from Barcelona, the Republican military position became hopeless. Following the fall without resistance of Barcelona in January 1939, the recognition of the Francoist regime by France and the United Kingdom in February 1939, and internal conflict between Republican factions in Madrid in March 1939, Franco entered the capital and declared victory on 1 April 1939. Hundreds of thousands of Spaniards fled to refugee camps in southern France. Those associated with the losing Republicans who stayed were persecuted by the victorious Nationalists. With the establishment of a dictatorship led by General Franco in the aftermath of the war, all right-wing parties were fused into the structure of the Franco regime.

The war became notable for the passion and political division it inspired and for the many atrocities that occurred, on both sides. Organised purges occurred in territory captured by Franco's forces so they could consolidate their future regime. A smaller but significant number of killings also took place in areas controlled by the Republicans, with the participation of local authorities varying from location to location.

Let's Headed to WWII and Beginning of the Cold War