The Economy after the Second World War

Denmark Romania

What happened during the Second World War

Denmark • 9th of April 1940 ‘ the peaceful occupation’ of Denmark by Germany under the promise of a ‘political independence’ ;• 2/3 of Danish ships were in neutral ports or belonging to western Allies;• Denmark exports massively to Germany•farmers benefit out of the commercial trade and industry increases due to large scale construction in west coast of Jyland•No hunger, low material damage;

Romania •1940: Russia occupies Basarabia and N. of Bucovina;• 1940: Hungary takes N. of Transilvania ; • 1941 Romania attacks Russia but is defeatedafter 3 years;• 1944 Romania joins The western Allies and recovers N of Transilvania;• over 800 000 human lives loss ; • over 4 billion USD dollars lost ( at the 1938 exchange rate)

After the Second World War until the mid ’50s

Denmark • between 1945 – 1950 Denmark had the slowest economic growth of all western countries;• society faced shortages, exchange controls and rationing; •Unemployment reached 10% of working population;• as a penance for ‘helping’ Germany, prices of exported products to Britain decreased while prices for coal received from Britain increased;• 1948 US financial aid - paves the way to the welfare revolution;

Romania • treated by the Allies as a defeated enemy and gets exploited by The Soviet Union;•Romania has to pay 1.2 billiard US dollars to The soviet union; • Russian troops occupy the country until 1956;• 50 % of export goes to the Soviet Union • expropriated 1.5 million hectare of land; • inflation increased with: (400% meat, 800 % potatoes, 1000% bread);• 1950 marcs the beginning of the fast industrialization;

Between the mid ’50s until the mid ’60s

Denmark The welfare revolution (1953- 1973)had 3 parts: •The Agricultural step- back in economy 25% of work force in ‘50’s, while only 10% of working force in ‘70’s ( due to mechanization);No of farms decrease, but their efficiency increase; • the 2nd industrial revolutionFarmers exodus to the industrial zone,Many small industries focusing on niche products ( radiator valves, plastic toys, pumps, pharmaceuticals)

Romania Massive industrialization implied: • moving people from the country side to newly built flats in industrialized cities;• 1960: trying to escape the Soviet economic exploitation, massive investment in all the economical areas occur ;•Romania becomes the second larges agricultural producer (after Russia);•1962: due to external loans, industry expands ( hydro-electrical, tractors, locomotives, planes)

Between the mid ’60s until the end of the ’80s

Denmark 1960’s: demand for labor so high, that the majority of women went to work, leading to an increase in the consumer goods and in production;• emergence of Service SocietyIncreased demand for childcare institutions, education, health care and nursing for elders;Massive increase of civil servants;For these services, tax increased from 25% to over 50 % The welfare state has it’s roots in the Danish villages of cooperative work , becoming a symbol of the Danish society.

Romania • 1965 – 1989 : Ceausescu’s dictatorship:•Romania becomes one of the world’s leading producers in: steel, locomotives, planes, oil installations and oil fine products;•Larges cereal producer in Eastern Europe;•More than 100 hydro-centrals were built;•Danube- Black Sea canal was built;•Nuclear power plant at Cernavoda;• the Bucharest metro network;• due to massive export, in 1989 the Romanian external dept of 10 billiard US dollars was completely paid off.

Citizen’s perception

Denmark Through a progressive taxation taking into account the value of the individual’s income , the Danish citizens benefit of:• a high standard of living;• health care;• education;• financial government aid.A good balance between work and private life, liberty of thought and speech, the belief that the government works for the welfare of the citizen, offer a “hyggeligt “ (cozy) environment for the members of one of the richest countries of the world.

Romania •Lack of imported products;•Massive export and to little products for the citizens;•Rationalized food;•Rationalized heating and electricity;• no liberty of speech concerning political beliefs;• close supervision by the “national security” members;• intrusion in private life;• very low standard of living for the individual;

Discussion topics

• What is the Future of the Danish welfare society in the context of Globalization?

• How would you introduce the notion of Democracy to an ex-communist country?

Bibliography

• History of Denmark, Knud J.V. Jespersen, 2011;• Romanian History manual;• www. stiri-economice.ro;• www. wikipedia.com;