Financial and Monetary Developments in the Occupied Netherlands, 1940–45

According to a 1943 review published in a German economic journal, in occupied Europe financial and monetary procedures were just a refined requisition policy. In the highly developed western parts of the occupied continent, simply not paying would terminate production. However, Germany did not want to pay for purchases in the countries it conquered. Consequently, the occupier had to use its dominance to pay individual suppliers with money taken from the occupied countries. These countries were compensated by an administrative recognition that Germany owed them a certain sum payable in an unknown future, and even that only for non-military deliveries. For military supplies the bill was simply passed to the national treasuries. By manipulation of this mechanism, Berlin got all it wanted from these countries for free, at the same time transmitting parts of its wartime inflation to these countries. This is visible in the parallel growth of the banknote and monetary circulation (M1) in occupied Western Europe and in Germany (Table 4.1). It suggests that there was some kind of European monetary mechanism.