The Great Depression European

Introduction 

The great depression was a devastating phenomenon in the North America and Europe at large that took place between the period of 1929 and 1939. The depression mostly affected the industrialized Western nations and was believed to have accrued from the collapse and downward plunge of the New York Stock Exchange in early October 1929. Out of the twenty-five thousand United States banks, eleven thousand banks had failed, and others were consequently forced to insolvency. This further dampened the mood around the depression subsequently leading to dramatic and huge fall of outputs as well as a drastic increase in unemployment. As such, the paper is aimed at discussing the event holistically in regards to the policies pursued by the European governments that later led to political and diplomatic tensions and crises among the nations.

Governments such as Germany and Britain responded to the crisis by raising existing tariffs, imposing more tariffs as well as setting quotas on imports from foreign countries. As a consequence of these massive regulations, the diplomatic relations between countries and the political spheres were significantly affected eventually leading to the Second World War with the US acting as the main supplier for munitions and armaments. The Germany politics were also greatly affected resulting in the rise to power of the dictator, Adolph Hitler and the rise of the Nazi. In many other countries in Europe, the policies imposed to reduce trade led to the economic downfall of nations consequently resulting in reduced value of liberal democracy as well as the strengthening of extremist forces. Countries like Germany and Japan’s reaction to the depression led to the rise to power of militarist governments that consequently imposed regressive and oppressive foreign policies that in turn brought about the Second World War.

The demanding policies imposed by the various European governments resulted in political and diplomatic instability. Elaborately, the international peace treaties bitterly failed to materialize and institutionalize economic corporation internationally among the European nations. Worse still, the European boundaries were redrawn which saw the old empires of Eastern and Central Europe dismantled and in their place regions of economic integration carved. From the diplomatic policies and political sanctions, some European countries such as Germany, Hungary, and Austria were not allowed to interact and cooperate with one another. This further led to political tensions that added fuel to the Second World War. Returning to the gold standard in the 1930s, European nations like Britain, Italy, and the USA overvalued their currencies all in a bid to gain money power. Due to the uncoordinated manner with which each nation overvalued their currencies, further tensions between the countries rose as evidence of a broken western economic system piled up. As such, further disruptions among nations continued forcing the countries that had overvalued their currencies to seek deflationary policies and measures. Evidently, these policies were consequential in causing further political instability within the region.

In essence, the political and diplomatic instability brought about by the failed policies and treaties substantially reduced the accumulation of capital by significantly causing uncertainty. As a result of the governments failing to manage the depression properly, the classical dichotomy terribly failed and broke down causing fear within governments to reorganize their budgets with lingering memories of the decapitating inflation in the 1920s. As such, the fears were transferred to diplomatic relations which became bitter, and unsettled countries sought to impose more sanctions and policies on others. However, as the depression deepened, the Nazi government of Germany became an economic superpower attracting other European countries into its political sphere desperate to export their products regardless of the stringent policies on foreign trade, banking, wages, and prices. As a result of the policies and the rise of fascism in Germany, good diplomatic and political relations were fostered among the European countries such as France and Britain making their trade in and through Germany leaving the US bitter.

Conclusion 

During the Great Depression, the European nations learned the hard way on how to protect the economy and the importance of maintaining good political affairs as they related to the economic ties among the countries. History, taught Europe and world leaders the hard way and as such, it is important for governments to maintain the integrity of the economy as well as external relations.