Eastern Europe

Economic conditions in eastern Europe have varied considerably since early modern times, and the region has been devastated by a number of wars: the War of Polish Succession, the Napoleonic Wars, World War I, and World War II. During these conflicts, the boundaries of many countries changed, altering the nature of intercountry trade.

Historically, the vast majority of the people in eastern Europe—as elsewhere in the world—were involved in agriculture, although traders did operate along land routes of commerce and along rivers. A considerable part of eastern Europe was never occupied by the Romans, but archaeologists have discovered evidence of extensive trade with parts of the Roman Empire. In medieval times, traders along the Baltic Sea started to establish what became known as the Hanseatic League. Its origin goes back to 1159, when Duke Henry the Lion of Saxony rebuilt the town of Lübeck. Other ports soon became associated with Lübeck, and it was not long before a trading agreement tied the various ports together. In an account of a storm in the Baltic Sea in 1351, it was recorded that there were 61 English ships taking refuge in the port of Danzig alone, giving some idea of the trade even at that early stage.

With the start of the Agricultural Revolution, and later the Industrial Revolution, there was great interest in the minerals in eastern Europe, with Frederick the Great annexing Silesia in 1740 in order to get control of the iron ore there. However, developments in eastern Europe during the Industrial Revolution badly lagged behind western Europe, as can be seen by the mission of the Swedish businessman and industrial spy Reinhold Rücker Angerstein (1718–60), who took little interest in eastern Europe. And it was to western Europe that Peter the Great had looked when he sought to build up the Russian economy.

Trade between countries in eastern Europe continued to increase during the 18th and 19th centuries. By the start of the 20th century, Russian businesses tended to dominate eastern Europe—indeed, the Russian Empire then covered more of eastern Europe than at any stage other stage in history. The other eastern European countries, as they became independent—Greece in 1821, Romania in 1859 (as Wallachia and Moldavia), Serbia in 1867, Bulgaria in 1878, Albania in 1912—became heavily reliant on German and Russian business expertise and technology as they sought to erode the previously heavy Turkish economic influence. The railway network helped tie the economies of these countries closer together.

World War I and II

The fighting in World War I left the region devastated, but also led to the creation of new countries. Poland was re-created and was given access to the sea along the Polish Corridor, in the hope of making the country more viable and less susceptible to attack from Germany. The formerly German city of Danzig (now Gdansk) was turned into a free port. The Austro-Hungarian Empire was split to form Austria, Czechoslovakia, Hungary, and parts were given to Poland; other parts of Serbia became the Kingdom of the Serbs, Croats, and Slovenes (and from 1929, the Kingdom of Yugoslavia).

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