This thesis focuses on economic relations between the Third Reich and Yugoslavia before the German attack in April 1941. It questions the conventional wisdom, according to which economic relations served mainly as a tool of German foreign policy towards Yugoslavia. Instead, it aims to place mutual economic relations within both the broader context of the German economic and financial plans and policies in the 1930s, and within the already existing economic and trading ties between the two countries, as they had been developing since the 1920s. Before 1936, economic relations between Yugoslavia and Germany are observed from the context of the polycratic character of the Third Reich’s executive, which enabled various economic policies, pursued by different levels of authority such as the Foreign Ministry, Economic Ministry, Food and Agriculture Ministry, the Reichsbank, etc. to exist alongside each other. After 1936, Yugoslav-German economic relations increasingly functioned within the framework of the German Four-Year-Plan. Yugoslavia’s mineral riches were of importance for German rearmament and, particularly after the Anschluss and the creation of the Bohemian Protectorate, Yugoslavia found itself increasingly dependent on trade with Germany. At the same time, the German market and exports were necessary for the process of Yugoslavia’s industrialisation, which had gathered momentum since the mid-1930s. This was however in many aspects inconsistent with the German long-term imperialist ambitions in South-Eastern Europe. This dissertation concludes that German economic policy towards Yugoslavia failed. Also, that contrary to the traditional view in historiography and despite its economic dependency on Germany, Yugoslavia maintained its political agency. It was international political developments beyond Yugoslavia’s control which eventually decreased Belgrade’s political maneuverability and forced the government in Belgrade to become more receptive towards German demands, particularly after the fall of France in June 1940.

The purpose of this thesis has been to analyse the managing of risks, insecurities and transactions costs that deterred economic exchange during the 1930’s and the 1940’s, within the Swedish-German bilateral clearing system, from a Swedish contractual theoretical perspective. In this thesis it has been shown that the clearing agreement was put in practice in 1934, on initiative of Sweden. In the agreement financial issues associated with risks and insecurities were to be reduced by formalising rules for the economic exchange. The basic principle was that Germany regularly had a trade surplus in relation to Sweden. The surplus was used for re-building the Reichsbank’s monetary reserves, as well as payments on financial claims. The agreement was designed in an incomplete way, to be adjusted ad hoc in a trial and error process. As both parties had different interests, they had to make concessions in order to sustain the clearing system. This was also reflected in the design of the agreement, which evolved from an incomplete to a specific, detailed agreement, due to the increasing risks and insecurities that had to be dealt with. The clearing system was ideal for wartime conditions since it maintained trade flows. It also became a line of defence: specific agreements allowed the dominant Germany less scope to assert preferential rights of interpretation of the rules and regulations. When the war intensified it was difficult for Germany to carry out its commitments to Sweden, and the Swedish party found reasons to distrust the German economy, which was entering a recession. At the same time Allied forces strengthened their political influence, and the victors would become the leaders of the future international economy. Sweden made a gradual exit from the clearing system, delivering the agreed upon exports to Germany, while keeping the Allied negotiators informed of the process. The Swedish-German clearing system collapsed in spring 1945.