863.01/392: Telegram
The Chargé in Germany (Mayer) to the Secretary of State
[Received July 16—9:30 a.m.]
219. Mail despatch No. 2929 of July 7th.75 Implications of Austro-German Agreement with respect to future German policy and her relations with Austria and Italy are puzzling. At the present juncture it is difficult to determine the final effects and more especially what next may be expected from Germany. To date we feel that the following is the most likely explanation although only the lapse of time can reveal the certainties.
Hitler came to the realization that his earlier Austrian policy was untenable and harmful to Germany. To press it further probably meant war with Italy. Uncertainties were disturbing not only to the Danube basin and to Italy but also to England and France and meant a continuing major difficulty in German relations with these two countries and Italy. Under the circumstances it was good statesmanship for Hitler to “sell” it for an improvement in Italo-German relations and a pleasing gesture for the British. With Austrian problem temporarily “isolated”, Hitler’s negotiations with the Western Powers would be greatly assisted both from the general atmosphere created and with the added support of Italy which the Austro-German Agreement would give. Any reason for closer Italo-German relations must also include consideration of the idea of British Ambassador that Franco-British mistakes could lead to this result (see my 161, May 28, 4 p.m.75).
[Page 323]On this hypothesis the agreement may not be a point of departure for the immediate creation of Central European bloc under joint German and Italian leaderships in the sense of pre-war alliances. As the German press have been stressing, and as private conversations confirm, the reply to the British questionnaire is still as possible as ever. Furthermore, on Saturday morning the Foreign Office called in the British Chargé d’Affaires and gave him text of agreement, the only foreign representative so treated. This seems to indicate that Austro-German Agreement is not intended to sever Germany from Western relationships, and especially England, but perhaps on the contrary to enable her more successfully to participate therein.
Following out this analysis the agreement need not signify a fundamental permanent change in Italo-German relations. These would remain essentially as before, namely, an apparently unsolvable opposition or antagonism for a dominant position in the Danubian region and the Balkans. To the contrary British Chargé d’Affaires is inclined to feel agreement indicates realization on Italy’s part of inability to oppose Germany there, and so spells end of Italo-German antagonism. In any event, there is perhaps a clarification in German and Italian positions in the Danubian region which may conceivably result in a definite form of alleviation of this antagonism. German interest in the Danube region and the Balkans is positive. Germany wishes to create an area of sure economic exploitation throughout this region. Herself and the several countries are complementary from an economic point of view. On the other hand Italy, while likely having imperial aspirations in Central and Southeastern Europe, is rather more interested from a negative or defensive point of view, namely, the Brenner. It is possible that the Austro-German Agreement may be a first step, consciously or otherwise, in the direction of a recognition by the two countries of a difference in their vital interests and from this may result a new and finally unantagonistic situation. Much practical ground is to be covered however and many difficulties are to be allowed in the carrying out of the Austro-German Agreement and otherwise before such a situation could arise. Likewise German distrust and disrespect of Italy is deep and lasting. Germans continually harp on the age old Italian policy of “hot and cold”. On their side Italians probably appreciate the menace of Germany’s power.
Meanwhile it seems likely that the opportunistic “parallelism” of Germany and Italy which has been functioning for some time will operate more openly and with greater emphasis. Wherever their mutual interests coincide the two countries may be expected now to [Page 324] adopt a much stronger and constructive attitude. Hitler rose to power in Germany under legalistic cover, a precept which he may desire to follow in his foreign policy. Hitler therefore may wish to cash in soon on the new developments and to cooperate with Italy in an effort to bring about “legal” revision in Europe. Hitler’s speeches of May 21, 1935, and March 7 and 31 this year are of interest in this connection.
Many here express caution with regard to Italo-German parallelism believing that neither Germany nor Italy have any intention of sacrificing their “independence”; that each views the other without illusion and foresees the day sooner or later when the advantages of this “parallelism” may cease and other policies may become preferable. While understanding and doubtless appreciating the initiative which Mussolini is believed to have given to the Austro-German accord, (see my 214, July 11, 2 p.m.77) Germany was most careful to confine the discussions to Schuschnigg, Papen and Hitler. I am reliably informed that there was no question of Italy participating in the settlement of a matter as vital to German pride and hegemony as her relations with Austria. On the other side I am reliably and most confidentially informed that recently Germany offered to recognize Italian Abyssinian conquests but that Italy did not accept, saying that the question of recognition would work itself out satisfactorily. The Germans, I am told, feel that this refusal exemplified Italy’s essential feeling of independence as she did not want to take a chance of thus jeopardizing her relations with England and France to whom she may want to return once her present “parallelism” with Germany has helped solve difficulties with these countries.
Hitler’s next move is unforeseeable. There is a considerable choice and also the alternative of a longish spell of inactivity. The possibilities include the remilitarization of Hungary, an accord with Czechoslovakia; or, on the contrary, the support of German elements there; activity with regard to Danzig; or finally activity with regard to Memel. There is also the question of colonies. Furthermore, consideration should be given to the furtherance of economic and financial normalization of Europe reputedly desired by Hitler and others of importance in Germany and supposed to have largely actuated Hitler’s proposals of March 7. If this is sufficiently persuasive with Hitler it may be that he would prefer to use the situation arising out of the Austro-German Agreement for a further effort toward “legal revision” in cooperation with Italy and so to bring about a more peaceful and stable Europe rather than to follow up the Austro-German [Page 325] Agreement with another adventure which would only add to the present uncertain and abnormal condition of Europe.
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