Nazi–Soviet Economic Relations (1934–1941) - 1939 Economic and Political Deals

1939 Economic and Political Deals

Further information: GermanSoviet Commercial Agreement (1939) and Molotov–Ribbentrop Pact

Germany and the Soviet Union signed a commercial agreement, dated August 19, providing for the trade of certain German military and civilian equipment in exchange for Soviet raw materials. The agreement provided for roughly 200 million in Soviet imports of raw materials (for which they would receive a seven-year line of credit), German exports of weapons, military technology and civilian machinery. "current" business, which entailed Soviet obligations to deliver 180 million Reichsmarks in raw materials and German commitment to provide the Soviets with 120 million Reichsmarks of German industrial goods. German Foreign Ministry official Karl Schnurre noted at the time that "he movement of goods envisaged by the agreement might therefore reach a total of more than 1 billion Reichsmarks for the next few years." Schnurre also wrote "part from the economic import of the treaty, its significance lies in the fact that the negotiations also served to renew political contacts with Russia and that the credit agreement was considered by both sides as the first decisive step in the reshaping of political relations." Pravda published an article on August 21 declaring that the August 19 commercial agreement "may appear as a serious step in the cause of improving not only economic, but also political relations between the USSR and Germany." Soviet foreign minister Vyacheslav Molotov wrote in Pravda that day that the deal was "better than all earlier treaties" and "we have never managed to reach such a favorable economic agreement with Britain, France or any other country."

Early in the morning of August 24, the Soviet Union and Germany signed the political and military deal that accompanied the trade agreement, the Molotov–Ribbentrop Pact. The pact was an agreement of mutual non-aggression between the countries. It contained secret protocols dividing the states of Northern and Eastern Europe into German and Soviet "spheres of influence." At the time, Stalin considered the trade agreement to be more important than the non-aggression pact.

At the signing, Ribbentrop and Stalin enjoyed warm conversations, exchanged toasts and further addressed the prior hostilities between the countries in the 1930s. They characterized Britain as always attempting to disrupt Soviet-German relations, stated that the Anti-Comintern pact was not aimed at the Soviet Union, but actually aimed at Western democracies and "frightened principally the City of London and the English shopkeepers."

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