Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Abstract

This article sheds light on why there was, and why Nazi Germany pursued, only comparatively little economic cooperation between the two most important axis partners, Italy and Germany, during the Second World War. In particular, the article looks more closely at the two countries’ cooperation in terms of raw materials, crucial to the war economy: why did Germany not deliver more raw materials to Italy and why did an underutilized Italian industry not export more manufactures to the Reich? Based on comparisons with other axis partners and occupied nations, the article argues that this was primarily the case because Italy could resist German economic pressure and, in contrast to many other countries in wartime Europe, maintained its sovereignty. Unlike Italy, these other countries readily (if not always voluntarily) financed larger bilateral German balance of payments deficits at favourable conditions and could not prevent Germany from implementing and monitoring a rigid raw material regime in their factories. Under these circumstances, greater economic cooperation with Italy seemed too costly to German officials and economic experts. Ironically, economic cooperation between the two Axis partners was so limited precisely because they were allies.