TENSION has eased among the Big Four on the question of Germany. Russia’s contribution is a drastic reduction of armed forces in her zone in Germany, with parallel cuts in her military establishments in the Balkans. This move is an event of larger significance than at first appears. It means, for one thing, that Russia is winding up the program instituted when her armies drove westward, of exacting recompense on the spot, in equipment and other forms of movable wealth, for the ravages visited upon Western Russia.

Reparations, in forms determined by political agreements with her wartime Allies, Russia still demands. Still other kinds of reparations, represented in the formation of joint commercial companies in Germany and the Balkan enemy states, may be expected to continue.

The repatriation of hundreds of thousands of Russian troops demonstrates that Moscow is confident that the food position at home will permit smooth absorption of these repatriates. It provides strong evidence that the Russians’ fear of having to fight a preventive war has diminished. Finally, it suggests that Russia’s new five-year plan requires this manpower in domestic production.

The cut of Soviet forces in Europe is accompanied by steps toward the creation of five provincial subdivisions of the Russian-supervised German zone. The setting up of five subordinate political units does not signify, however, the abandonment of Russia’s basic contention: that the new Germany must be strongly centralized.

In Britain there has been a noticeable strengthening of support for the German Social Democratic Party. Witness the fanfare attending the pilgrimage to London, late in November, of the German Social Democratic leader, Dr. Kurt Schumacher, at the head of an impressive delegation from the British zone.

Disabled giant

The great void left in the economy of Europe by the continued prostration of the Reich is now evident. Efforts on the part of some of Germany’s neighbors to get going again have been heroic. In Norway and the Netherlands, in Belgium and Czechoslovakia, the measure of success attained is arresting. But the negative role played by the disabled economic giant frustrates progress. It is heading Europe toward a crisis. It is also inducing a realignment of Europe’s commercial relationships.

In Holland, the ban imposed by British zonal authorities on cross-frontier traffic and business activity is producing a serious wave of anti-British feeling. The Dutch have been angered by the refusal of the authorities in the British zone of Germany to purchase the large surpluses raised by Dutch farmers, who expected that shortages in the British zone would guarantee them a market. With food shortages general throughout Western Germany and verging upon calamity in the British zone, the British have husbanded their foreign exchange and looked to the Americans for financial assistance. Many Dutch farmers face a serious loss.

A significant illustration of the role which the wrecked economy of the Reich plays in determining policies among neighboring states is found in the Swedish-Russian trade pact. American criticism of that agreement and of the huge credit involved — more than a quarter of a billion dollars — misses the main point. For years, Germany was Sweden’s most lucrative market and source of imports. Under pressure of necessity, the Swedes have moved with realism to find a comparable substitute. The resources and needs of the Soviet Union have offered the answer. Similar considerations underlie the endeavors of the British to negotiate a broad trade pact with the Soviet Union.

Efforts among the nations of Europe to offset the economic ruin of Germany are dramatized by a remarkable expansion of imports from Britain in the year past. Finland’s imports from England in iron, steel, and manufactures have ballooned nearly 500 per cent as compared with 1938, according to trade figures published in London. Norway’s have risen about 350 per cent, Denmark’s 500 per cent, Poland’s nearly 900 per cent, Holland’s about 550 per cent, Belgium’s close to 480 per cent.

France has boosted her British imports nearly 1000 per cent, and Portugal by about 900 per cent. Even impoverished Greece added 10 per cent to previous purchases in these categories. In nonferrous metals, the story is equally startling. Russia has jumped her imports by a third over 1938. Norway, Denmark, Holland, France, Portugal, and Czechoslovakia have recorded increases all the way from 400 per cent to nearly 1500 per cent. Imports of electrical goods and machinery tell the same story.

Europe’s drive for industrial rehabilitation, hampered by lack of German exports, strains the ability of Britain to produce. It involves also severe financial distortion for every other country affected. The problem of paying for huge imports from depleted reserves, inflation-riddled credits, and restricted industrial production is a nightmare to European governments.

Do we back out?

These difficulties are increased by the gyrations of the American economy. Since the elections in November, evidence of a tighter American attitude toward loans, and uncertainty with regard to the future course of American foreign policy, add to Europe’s perplexities. Foresighted governments like that of Norway are setting aside reserves for the admitted purpose of cushioning the shock of an American economic crash. Nearly every European government shares Norway’s forebodings. All know that serious difficulties in the United States would threaten Europe’s makeshift economic structure. Consequences to their political and social systems might prove unmanageable.

Since the United States pronounced the death sentence upon UNRRA’s continuance, rejected the La Guardia plan for a carry-over arrangement in relief administration, and reneged on the International Relief Organization’s program, problems of hunger have suddenly become greater. These policy decisions, and hints from spokesmen for the new majority in Congress that further curtailments of American responsibilities abroad impend, darken the prospects of the new year.

The London Daily Express recently blazoned across its front page a telephonic interview with Senator Robert Taft of Ohio. That influential Republican leader was quoted as flatly repudiating commitments on reciprocal reduction of trade restrictions given by the spokesman for the State Department, Mr. William Clayton. The interview attracted wide attention in European capitals. European expectations from liberal American leadership are definitely ended.

Doubts about American intentions are accentuated on the Continent by a change in Europe’s mood. Resolute hopes are tempered by unsolved difficulties, by weariness, and by a revival of political quarreling and class strife. Millions of Europeans are still looking at silent factories, living in cold homes, facing intermittent unemployment or total idleness, or undergoing the moral and spiritual rot of displaced persons.

Only enough pay for food

The ordinary French workman with a family of four earns barely enough wages to pay for the family’s food, according to studies made by the Statistical Institute at Paris. He has “nothing left over for clothing, shoes, rent, school expenses for his children,”or anything else. For such people, irregularity of employment is a catastrophe.

The inflation in Spain is illustrated by the price of olive oil, traditionally a basic food item for millions. of the wretched Spanish peasantry. It sells for $10 a quart today in Castile, and is peddled at a peseta a spoonful in Madrid. In December, eggs were selling in Spain for $2.50 a dozen.

In Greece, where the drachma was rehabilitated last summer by foreign loans, and pegged at a value of 150 to the dollar, the inflationary process is at work again. The rate had risen to 10,000 to the dollar as the year ended. Civil servants in Athens, W were receiving the equivalent of about $2.60 a month, improved their lot only a little through a general strike.

Meantime, the squandering of funds on armaments continues. About 57 per cent of the total Spanish budget is being diverted by Franco to the army and the police. Approximately 63 per cent of the government’s revenues in strife-wracked Greece is being spent for military purposes. Greece has received nearly $500,000,000 in assistance from the United States, and an additional $83,000,000 from Great Britain. Yet in terms of the necessities of life the present condition of millions of her people is little better than it was a year ago. Their political and social plight is infinitely worse as the result of civil war.

Austria faces her worst winter since 1919. Even on the black market, coal is a rarity. The dearth of winter clothing and medical supplies fosters epidemics of typhoid, diphtheria, and infantile paralysis. The food ration late in November was fixed officially at 1200 calories in some cities, though it was much lower in the rural areas. Minimum human subsistence calls for at least 1800 calories. General Mark Clark’s plan to utilize $35,000,000 of War Department funds to raise the food allowance may help. It will not suffice to carry Austria through the winter.

In Italy, pressure of destitution and hunger among the swarming poor finds expression in a series of peasant risings, which began late in the summer and spread during the autumn to the environs of Naples. The peasants are seizing the land and apportioning it among themselves. Their aim is to acquire land which will enable them to survive.

The attempt of the government to forestall this movement by ordering distribution of 150,000 acres has failed utterly in a nation where 1 per cent of the farm owners hold title to 42 per cent of the best land, on which dwell 46 per cent of the country’s population. Italy’s domestic food troubles, like Spain’s, are worsened by a policy of exporting food sorely needed for domestic consumption, in order to build up foreign credits for industrial imports.

Poland heads for trouble

Restoration of the rail lines has eased distribution problems for Poland, as compared with last winter. A fairly good harvest promises most of the country modest rations. Yet the political and social situation is growing more explosive.

In the general elections now scheduled for some time during January, the Communist-dominated Warsaw Government possesses all the advantages of compact organization, sharply defined aims, and complete control of the apparatus of power — including the police.

Parallels have been drawn between Poland and Rumania. Nevertheless, an important difference between the electoral status of Poland and that of Rumania is that Poland possesses a genuine Opposition with a real program, supported by a substantial portion of the people. In Rumania, the Opposition lacked any program save that of flat hostility to everything represented by the Groza regime. This weakness and the ruthless tactics pursued by the Rumanian government guaranteed the triumph of the official slate beforehand.

Moreover, government-sponsored elections in Rumania have meant governmental victory almost uniformly, throughout the past generation. Terror, fraud, coercion, and arrest were familiar political instruments in that country’s elections long before the Red Army rolled across the land and Russiansponsored political leaders emerged to take over.

The difficulties besetting the present Warsaw regime in the present campaign arise from the fact that the Opposition is widespread and broadly representative of Polish traditions. Its formidable rallying point is Vice-Premier Stanislaw Mikolajczyk’s Peasant Party. Its program appeals strongly to millions of Poles who, despite the fact that the Russians crushed the German invader and drove him out, cherish deep and enduring hostility to domination of their country from the East.

Polish uncertainties

There is little question that Premier OsubkaMorawski’s regime is sustained by force rather than by majority consent. The Premier himself has hinted at Russian reoccupation in the event that the government’s party is defeated. That is not the utterance of a confident leader. The uncertainty of the regime is underlined by the merging of the Polish Communist and Socialist Parties to strengthen government prospects at the polls.

Discontent with the Polish government is noteworthy because a large part of the regime’s domestic program is acceptable to the peasantry. The redistribution of land assures Poland a strongly based peasant economy. Yet even the restraint exercised by the government in exempting church lands from expropriation, and reforms of undoubted ultimate benefit to the whole nation, cannot cancel out enmity in the population toward what they regard as a minority regime of usurpers, bossed from Moscow.

Destruction of the old social system has mobilized the remnants of the Polish intelligentsia in opposition. Government intervention in favor of civil marriages has strengthened the hostility of the Church.

Mikolajczyk, the moderate Peasant Party leader, retains his popularity even though the land reforms so often promised in the past have been carried through to completion by the Russian-dominated government he opposes. The tactical warfare that marks the election campaign, the arrests, the suppressions of the press, and muffled fighting suggest that, Poland is moving toward a new crisis, rather than away from an old one.