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Creation of Triest Free Territory: an examination of the decision-making process through correspondence letters in the aftermath of World War II

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  • Bianchini, Virginia

Abstract

This paper examines the establishment of Trieste as a Free Territory after WW2. The existing literature covered its contested status between Yugoslavia and Italy, focusing on its socioeconomic, and geopolitical challenges. However, I adopt a unique approach examining correspondence letters between country leaders and internal reports to provide first-hand accounts of the negotiations and considerations of leaders from the United States, United Kingdom, Italy, France, and the U.S.S.R. The methodology involves a qualitative analysis of the correspondence letters to comprehend the decision-making process behind the creation of Trieste Free Territory. The findings reveal a consensus on establishing a unique currency the "Triestuno" and Bank of Issue for Trieste, which aimed to provide financial stability but faced challenges due to limited initial capital and dependency on external financial support. It then complements this with internal reports providing data on economic indicators such as budget allocations, balance of payments, labour, and wages. The budgetary analysis shows a balance between revenue and expenditure, with a potential surplus indicating cautious financial planning. Furthermore, the balance of payments reveals Trieste's dependence on international trade, particularly with neighbouring countries and the importance of the port and shipbuilding industry offers potential for economic growth.

Suggested Citation

  • Bianchini, Virginia, 2025. "Creation of Triest Free Territory: an examination of the decision-making process through correspondence letters in the aftermath of World War II," LSE Research Online Documents on Economics 127146, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:127146
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    File URL: http://eprints.lse.ac.uk/127146/
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    JEL classification:

    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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