The Italian-Yugoslav Rivalry for Political-Economic Influence in Albania 1929-1934

The Italians not only cancelled the loan for Albania, but also continued to intervene in the administration of the Albanian government, in the police, in the gendarmerie, etc. They also paid attention to the impact on education, culture and health. Their intervention in the state organs of Albania became so great that the Italian government formed various control commissions, which undoubtedly directly affected Albania's independence. The situation worsened to such an extent that Italy demanded the customs union with Albania*.

On the other hand, the Albanian government in 1931 formed a commission from the Albanian Ministry of Finance, which would deal in detail with the issue of economic relations with Italy. At the same time, it requested from all the Chambers of Commerce of the country, concrete proposals regarding the new agreements, as its term expired during 1933 Diplomatski Arhiv Saveznog Sekretariata Inostranih Poslova Jugoslavije (DASSIP), KTO, 1931, f. II, arb. 45/9, nr. 10189. Shkres¸ e Gj. Nastasijeviqit; DASSIP, KTO, 1933, f. VI, arb. 220, nr. 9142, 7.9.1933, cit. for: Arifi-Bakalli E. Marredheniet shqiptato-jugosllave 1929-1939. P. 73-74.. Likewise, the Albanian Royal Commission proposed to balance imports and exports. If this policy were to be applied, Italy, which absorbed two-thirds of Albania's exports, would have to provide two-thirds of its imports. The Italian side criticized the Commission's report, arguing that they take into account the "necessity" of the current level of Albanian imports for economic development and the inability of Albania to increase its exports Roselli A. Italy and Albania. P. 59..

Zogu decided that in order to get out of this situation, at the same time to free itself from the Italian invasion, to seek solutions from other states. Thus, when Italian diplomacy continued to pressure the Albanian government with the suspension on April 1, 1933 of the loan of 100 million francs, granted two years ago, the king's adviser, Mehmet Konica, approached Belgrade with the request to take a debt of 3 million Albanian francs. For the Yugoslav ambassador in Tirana, this loan was indispensable for Albania, because without this assistance it would have capitulated to Italy. Regardless of the statements of the Yugoslav ambassador in Tirana, the Yugoslav government did not possess free funds to such an extent as to help the Albanian state Fischer J.B. Mbreti Zog dhe p¸rpjekja p¸r stabilitet ne Shqip¸ri. Tirane: £abej, 2004. P. 243..

Italian-Yugoslav relations in the years 1930-1932: rivalry and efforts to reach a bilateral agreement

Rome and Belgrade along with the rivalry for dominance in Albania made efforts during the years 1930-1932 to reach any political and economic agreement, which would nevertheless be harmful to the economy and the Albanian state itself. At the meeting of August 31, 1930 held in Bled, King Alexander had given Marinkovic in writing instructions which consisted of:

1. The failure of Italy's intervention in Albania;

2. The failure of joint intervention in Albania;

3. Provision of guarantees by both parties for the independence of Albania and non-interference in its internal affairs;

4. In the event of unrest in Albania, to demand jointly from the League of Nations the use of an international gendarmerie force and

5. Guarantee for the request for a loan from the League of Nations, for the financial consolidation of Albania Krizman B. Vanjska politika jugoslovenske drzave... P. 53-54..

While, the Italian Foreign Minister, Grandi had told his Yugoslav counterpart, Marinkovic during a meeting that: “the Albanian problem has two sides: the Balkan side that interests the Kingdom of Yugoslavia and the second, the Adriatic side that interests Italy”. According to him, it is necessary to divide the spheres of interest in Albania. Further, Grandi said that a common language had to be found for Albania, which, according to him, represented security for Italy in the Adriatic. At the meeting on October 18, 1930, Grandi, among other things, assured his Yugoslav counterpart, Marinkovic, saying: “This is not a stage for further penetration into Albania nor a claim against you. We give you assurances of all kinds that this alliance will never be directed against you, either militarily or politically”. Marinkovic said: “All contentious issues must be resolved, because the Kingdom of Yugoslavia does not want to see Italy as an enemy. Belgrade needs to know the Italian intentions in Albania” Ibid. P. 51-53.. In 1930 Italian influence was still very high, although Italian-Albanian relations were strained. But the reason for the Italian influence was due to the fact that Albania had no friendly relations with any other neighbouring country Hoti I. Q¸ndrimi i diplomacis¸ italiane ndaj Shqip¸ris¸... P. 40..

It is also worth noting the efforts during 1932 to reach an Italian-Yugoslav agreement between Mussolini and King Alexander, but without result, as Belgrade refused to recognize “Italy's special interests in Albania” Arifi-Bakalli E. et al. Historia e shqiptareve gjat¸ shekullit XX. V¸Ømi III. Tirane: Akademia e Studimeve Albanologjike, Instituti i Historis¸, 2021. P. 505-506; PutoA. Shqip¸ria... P. 523.. So, despite attempts at rapprochement with Italy in the years 1930-1932, they resulted without any agreement. Thus, the Yugoslav King Alexander said: "Italy should not be allowed to settle in Albania or to violate its sovereignty and integrity. Any negotiation that would call into question our determination to oppose such a policy would harm not only the interests of the Kingdom of Yugoslavia, but also Albania” Krizman B. Vanjska politika jugoslovenske drzave. P. 53-54..

Precisely because of the fear of Italian domination in the Balkans, King Alexander was open to the preservation of the Independence of Albania. He even presented this position at a meeting with the Italian representative, Guida Malagole Cippi, to whom he had said: “Italy had reached with Albania the Tirana Pact that guaranteed its independence and integrity and that we fully agree with this issue, and I have even publicly stated that I am interested in defending the independence of Albania”. Also, in a meeting with the Italian ambassador in Belgrade, Gallin, at the beginning of 1932, Alexander was interested in the currents of Italian-Yugoslav relations and the issue of Albania within them. Galli informed him that Italy could not give up its rights in Albania, while the angry Alexander had said: “Albania was the only point where we ask Italy to make concessions, because on other issues, we will give up without any problems”. So, the most sensitive point in the Italian-Yugoslav relations was Albania. Therefore, Yugoslav military circles did not agree that Albania should be a bridge for the Italian penetration in the Balkans Ibid. P. 57-61..

The secret talks that took place between Rome and Belgrade during the years 1930-1932, where the central topic was Albania, ended without any agreement between them. Therefore, it is precisely for this reason that the following year the turn towards a Tirana-Belgrade rapprochement took place. After the extreme deterioration of Italian-Yugoslav relations and Mussolini's conviction of the destruction of the Kingdom of Yugoslavia, Belgrade was open to talks with Tirana and economic agreements with it Arifi-Bakalli E. Drejt eliminimit t¸ faktorit shqiptar... P. 48; VerliJ. Kriza ekonomike boterore... P. 267..

The global economic crisis and its impact on the economy of Albania

It is important to note the fact that in the period 1929-1933 the global economic crisis affected not only Albania which was among the least developed countries in the region, but also Italy and the Kingdom of Yugoslavia, which had a more stable economy and continued their efforts to win the Albanian market. On the other hand, Albania's foreign trade in the years 1928-1935 continued to decline continuously, while in 1934 imports and exports had fallen by 30% compared to those of 1929 VerliJ. Kriza ekonomike bot¸rore... P. 267.. In the years of the global economic crisis, exports of Albanian products had fallen sharply, in contrast to imports, which were at least twice as high. This was natural, given the fact that the crisis had challenged even the most developed countries of the time. At the top of the list of Albanian exports and imports was Italy, which was at the same time Albania's most developed neighbour. Even when there were tensions in bilateral political relations, it continued to maintain the primacy of trade exchanges with Albania Arifi-Bakalli E. Marr¸dh¸niet ekonomike shqiptaro-jugosllave... P. 80..

The monopolization of the Albanian export-import was a sure opportunity for penetration in Albania, therefore Italy was attentive in this regard and strongly opposed any action of the Kingdom of Yugoslavia, and not only. The official Roma had successfully managed to put pressure on the Albanian government for the blockade against other states. This approach had an effect, as Italy managed to dominate the Albanian market Ibid. P. 45; FischerB. Mbreti... P. 181.. Throughout the years of the global economic crisis, the impact of Italian capital on Albania's economy was clearly seen. It had three-quarters of the capital invested in the economy by all foreigners, and continued to receive new concessions. Also, in addition to a wide banking network, there were dozens of concessionary companies, most mining enterprises, but also light and food industry, as well as agricultural and construction companies. But the Italians did not set up any important industrial enterprise in Albania, which would affect the opening of new jobs, much needed for the country Meta B. et al. Historia... Ó¸Ï. III. P. 296..

Although Albania often signed concessions, the vast majority of them were not favorable to its national economy. One of them was the agreement that recognized the right to organize the Italian AGIP (Agenzia Generale Italiana Petrolio) monopoly of the import of petroleum products in Albania, starting from July 1929. This agreement was a great loss for the Albanian economy FischerB. Mbreti. P. 181; VerliJ. Kriza ekonomike boterore. P. 268.. The agreement with the oil company AGIP was an unsurpassed challenge for the Albanian government. In a circular that the traders of Durres sent to the Chamber of Commerce in this city, regarding this concession, among other things, they announced that this company had violated the rules and the law of trade, developing unfair competition. According to them, the situation was difficult because AGIP had a stock of oils all over the country AQSH, Fund 253, Year 1934, Dossier 2, P. 1. Circular of traders of Durres sent to the Chamber of Commerce on the concession of AGIP company, Durres, 8 March 1934.. For the Italian Ambassador in Tirana, Sola, the Albanian government “had agreed to grant a concession on extremely favorable terms”. It called this “another strong link connecting Albania to Italy” Puto A. Shqip¸ria... P. 486.. Despite the problems highlighted above, it must be said that foreign capital investments helped the country's economic development. An example of this is the Italian company AIPA, which carried out the works for the use of kerosene, in particular in the area of Devoll (Kumova). Importance for the country were also other companies such as: Simsa, SAMIA, THAN, etc. In total, the amount invested in the Albanian industry was estimated at over 100 million francs, mainly Italian capital Luku E. Diplomacia evropiane ndaj Shqip¸ris¸... P. 244-245.

* What should be noted is the fact that after the trade agreement signed with Italy in 1924, Albania had signed other treaties on special bilateral tariffs with Greece, Yugoslavia and France thus expanding the relative benefits to other countries, which required the clause of favored nations by means of various types of trade conventions. See also: Roselli A. Italy and Albania. P. 58..

Due to the boycott of Albanian products by Italy, as a consequence of the deterioration of political relations since 1931, the Albanian government requested from the Yugoslavs the purchase of its products. At the initiative and insistence of the Albanian side in the talks with the Yugoslavs, it was achieved that in the Final Protocol* of the Supplementary Trade Agreement of 1933, olives took first place in the items that the Kingdom of Yugoslavia had to import from Albania. The implementation of this agreement faced obstacles, because this product was not consumed by the Yugoslavs Arifi-BakalliE. Marr¸dh¸niet ekonomike. P. 131..

Regardless of this agreement, which was not successful, in the period of the economic crisis, the Kingdom of Yugoslavia, in order to benefit from the aggravation of relations between Rome and Tirana, intensified its efforts to improve economic relations with Albania. In addition to the economic interest, Belgrade aimed to extend its influence in political life, always to realize nationalist goals towards Albania and Albanians in general Meta B. et al. Historia. Vdll. III. P. 466.. Therefore, seeing the cooling of Italian-Albanian relations, they began to increase their presence in Albania in various forms. On the other hand, Zogu also began to offer himself to the Yugoslavs, always in order to intimidate the Italians Milo P. Politika e Jashtme. P. 820-821.. In these circumstances, the Italians had to think carefully about redesigning relations with the Albanians, otherwise they were in danger of losing influence in Albania, an influence that had long been intended by the Yugoslavs. Regardless of relations with Italy, it must be said that the development of economic relations between Albania and the Kingdom of Yugoslavia was of great interest to both sides, but in particular to the Yugoslavs. This is due to the fact that Yugoslav exports to Albania were on the rise. If we give detailed figures, we see that there is an increase in Yugoslav exports. Thus, Yugoslavia previously occupied the seventh and ninth place in the Albanian import, in 1928 it managed to take the sixth place, and in 1929, the third place. From these data it is clear that Yugoslav traders showed greater interest in the Albanian market. Although this market was not as large, it was important for Yugoslav products, especially industrial ones such as cement, wood for construction, sugar, chemical products, etc Arifi-BakalliE. Marr¸dh¸niet ekonomike... P. 40-41, 55.. So, the trend started to be positive, which served as an incentive for increased economic cooperation.

Albania's inclusion in the Balkan Conferences and its exclusion from signing the Balkan Pact as a result of the Italian-Yugoslav rivalry

In addition to successes in the economy and trade, Belgrade tried to achieve its objectives through diplomacy, with the aim of excluding Italy from its sphere of influence in Albania. Thus, Yugoslav diplomacy on the one hand expressed good relations with Italy, on the other hand in the period 1930-1934 worked hard during the Balkan Conferences to achieve an alliance between the participating states in order to strengthen its position and influence in Albania. Therefore, the signing of the Balkan Pact For more details about the Balkan Pact, see: Hasani M. Rrethanat socio-ekonomike ne Shqip¸ri... P. 581-587. on February 9, 1934 for the Kingdom of Yugoslavia was a great success in relation to Italy and the weakening of its influence in Albania. This is because the Yugoslavs felt continuously threatened by Italian domination in the Balkans. This fact is also emphasized by the British Ambassador to Belgrade, Nevil Handerson, who among other things states: “The pact represents a blow to Italian policy in the Balkans... Any agreement aimed at limiting Italy's ability to cause disasters in the Balkans is useful” AvramovskiZ. Stav britanske diplomatije prema sklapanju balkanskog sporazuma (1933-1934). Radovi Zavoda za hrvatsku povijest Filozofskoga fakulteta Sveucilista u Zagrebu. 1983. Vol. 16, No. 1. P. 175..

Although Albania was a participant in the Balkan Conferences, it is not a signatory to the Balkan Pact. The reason for this, along with the interests of the Balkan countries that Albania did not count on to have any weight of importance, was also Italy's continued effort to prevent Albania from signing the Pact. The Italian Ambassador in Ankara said that “Italy would never see with a good eye that Albania would be called to participate in the Balkan Pact”. Turkish Foreign Minister, Tefik Ruzhdi, on this issue stated that: Albania was impossible to participate in the Pact because it has an alliance with Italy, which has not given its consent Milo P. Politika e Jashtme e Shqip¸ris¸. Vell. I: 1912-1939. Tirane: Toena, 2013. P. 817.. As Belgrade sought to disassociate Albania from Italian influence, it sought to support its accession to the Balkan Pact. But support from the Yugoslav side alone was insufficient, so Albania eventually missed the chance to sign the Pact. Rome, feeling this as its success, stated that: “Albania is our inviolable zone and anyone who has to deal with it, must first get permission from Italy” Ibid. P. 818.

* 1. The Supplementary Agreement, signed in Belgrade on December 20, 1933, which validated the import quotas was implemented by the government decision of February 8, and entered into force on March 6, 1934; 2. Additional agreement with Annex C of 1926, which was intended to facilitate the border crossing to the Shkodra market, was signed in Belgrade on May 5, 1934; 3. Protocol on the delimitation of the border free zone, as certified by Annex C of 1926 and other points regulated by it, signed in Belgrade on May 8, 1934. Also see: AvramovskiZ. Britanci o Kraljevini Jugoslaviji. P. 235-240; Arifi-Bakalli E. Drejt eliminimit t¸ faktorit shqiptar... P. 49..

Year 1934: turning point in Albanian-Yugoslav relations

Despite the triumph of Italian diplomacy in relation to Albania and the disagreements between Tirana and Belgrade on many issues that are already known, Albanian-Yugoslav relations during 1934 marked a turning point, due to the fact that both sides tried to create the impression that they are not interfering in the internal affairs of the neighboring state. As a result of creating a climate of interstate cooperation, always to achieve their goals, Albania and the Kingdom of Yugoslavia during this year signed a series of new and complementary trade protocols and agreements and not only. In addition, the Yugoslav side promised to grant a loan to Albania in the amount of two million Fr. Gold.* After the signing of the supplementary agreement, the two sides began to think about opening talks regarding the creation of a free movement and trade zone on the Albanian-Yugoslav border. This agreement was reached in 1934, according to which this area included only 15 km on both sides of the border MehmetiA. Diplomacia e Britanis¸ s¸ Madhe... P. 322.. It should be noted that for the Albanian government it was the economic interest and the improvement of Shkodra's trade balance that pushed it to cooperate with the Yugoslavs AMEPJ, Dossier 265, Year 1933, P. 10. Report on the situation of the Albanian population in Yugoslavia drafted by the Royal Consul of Albania in Bitola, Hamdi Kazazi sent to the Foreign Minister in Tirana, Bitola, 14 December 1932.

** In line with alternative economic policy and approximation, in order to reduce Albania's dependence on Italy, the Albanian and Yugoslav governments envisaged the creation of a separate office (Article III) to increase the exchange of goods in foreign trade. Their goal was to examine the mutual trade exchange accounts, to take measures for the full implementation of the agreement. - Arifi-Bakalli E. Marr¸dh¸niet ekonomike... P. 48-51, 55; Luku E. Diplomacia. P. 224-225..

These interstate agreements, in addition to the economic side, also had a political side, because Italy closed the way for its penetration in the Balkans. We say this because in this period we have deterioration of Albanian-Italian relations as a result the cessation of financial assistance from Italy. Belgrade was waiting for this moment, which, in accordance with its goals, to stop the momentum of Italian economic penetration in Albania, was ready for the Albanian side to make large concessions in order to avoid Italian dependence. To achieve this goal, through the supplementary trade agreement, Belgrade aimed to improve Albania's trade balance** by exporting and importing to the Albanian state AvramovskiZ. Britanci o Kraljevini Jugoslaviji. P. 239.. Since the signing of the new Albanian-Yugoslav trade agreement had a positive impact on the rapprochement of political positions between the two countries, in this period talks were held and the possibility of a political alliance was projected. For this reason, not infrequently Yugoslav heads of diplomacy, such as Djonovic, visited Zogu at the Royal Palace, where, according to Italian diplomats' sources in Tirana, not only the signing of the Balkan Pact by the Albanian side was discussed, but also the possibility of its association in a special alliance with the Kingdom of Yugoslavia and the Little Entente. Yugoslav sources also shed light on these political developments. Thus, according to them, at the beginning of November 1933, Zogu through Djonovic asked Belgrade for the admission of Albania into the Little Entente Milo P. Politika e Jashtme. P. 829-830..

Yugoslav diplomats stated that they supported Albania in its efforts to organize, strengthen and modernize the state as well as its economic development. They even said that the consolidation of the independence of Albania and its transformation into a valuable member of the Balkan and international family was a sincere goal of the policy pursued by official Belgrade. However, Belgrade did not fulfill any of the obligations defined in the above-mentioned interstate agreements. The parties faced objective obstacles such as: similar economic structure, lack of traffic lines, incorrect attitude of Yugoslav merchants, etc. As a result, hopes for an intense economic and trade relationship were fading Arifi-Bakalli E. et al. Historia... Vell. III. P. 507-508; Arifi-Bakalli E. Drejt eliminimit t¸ faktorit shqiptar... P. 49..

On the other hand, Italy had claims not only during the years 1929-1934, but also beyond, for domination and then the invasion of Albania. For this it is enough to quote the representative of the Italian government, Vicenco Loiakono, when during his visit to Albania, he stated that: “The exploration of oil and mineral resources continues. Albania is turning into a bastion of Italy in the Balkans, into a controlled territory and this is a good thing, because the path of the Empire starts with Albania” Smirnova N. Historia e Shqip¸ris¸ p¸rgjat¸ shekullit XX. Tirane: Ideart, 2004. P. 174.

* Despite warnings of resistance, the demonstration of military force by Italy frightened Zogu, who immediately informed the diplomatic representatives of the Great Powers and the neighboring countries accredited in Tirana as well as the Albanian legacies abroad. Romeo didn't expect that kind of reaction. However, recognizing him as a pragmatic leader, Rome proposed to him the resumption of talks. Also see: Milo P. Politika e Jashtme. P. 834.. To achieve this objective, Italy on June 23, 1934 sent* a squadron of six cruisers and thirteen destroyers into Albanian territorial waters AMEPJ, Dossier 221, Year 1933, P. 147. Albanian-Italian relations, translation of the main article of the newspaper 'Vardar', Skopje, 12 October 1933; Milo P. Politika e Jashtme. P. 825-826; Duka V. Histori e Shqipdrisd 1912-2000. Tirana, 2007. P. 89-190.. The demonstration of the Italian naval force in the port of Durres produced two concrete results: firstly, it further strengthened the distrust of the Albanians towards the Italians and, secondly, it unified around Zogu the population of all regions of Albania, although there were numerous contradictions Duka V. Histori. P. 190; Fischer B. Mbreti. P. 230.. The lack of trust was further reinforced by the fact that Italy's economic policy had completely failed to build a functioning economic structure in Albania. The country had gradually lost no small wealth in gold coins that Albanian citizens had been able to accumulate in the past. The Albanians were unable to buy anything FischerB. Mbreti. P. 228..

However, Albania emerging from the economic crisis experienced a recovery of the domestic economy. In 1934 it signed bilateral free trade agreements with Greece and the Kingdom of Yugoslavia, while in 1935 it signed such an agreement with Italy PishaA., Vorpsi B, Hoxhaj N. Bank of Albania, P. 359. Áúëãàðñêà íàðîäíà áàíêà. URL: https://bit.ly/3NUL05q; Luku E. Diplomacia. P. 243.. Also, during 1935, Belgrade and Tirana tried to sign a secret treaty, but the Italians managed to deconceive that plan. They even increased the pressure on Belgrade not to exert pressure on Tirana to join the Balkan Entente Hoti I. Q¸ndrimi i diplomacis¸ italiane ndaj Shqiperise... P. 72-74; Milo P. Politika e Jashtme... P. 819-820.. For the construction of the plans of Italy, the attitude of the two Great Powers, Great Britain and France, which in order to avoid an Italian-German rapprochement, demanded from Belgrade to disregard the requests of Albania in the ticket plan and in its request for membership in the Balkan Pact Arifi-Bakalli E. Drejt eliminimit t¸ faktorit shqiptar. P. 51..

Conclusions

This paper draws the conclusion that the Italian-Yugoslav rivalry for dominance in Albania during the years 1929-1934 took place in extremely complicated circumstances within and beyond the Balkan region. In this period, Albanian-Italian and Albanian-Yugoslav relations developed not only depending on Italian-Yugoslav relations, but also depending on specific issues between the parties. Thus, in the years 1929-1934, the causes of the Italian-Yugoslav rivalry for political and economic dominance in Albania were: geographical proximity to Albania; the fragility of the Albanian state and the possibility of political and economic influence; geopolitical interests; economic development as a result of the expansion of the market, etc., while the consequences of this rivalry for Albania included: the inability to establish stable and reciprocal relations; the continuous pressure placed upon the Albanian side whenever an agreement was reached with the other side; the lack of economic development as a result of the dominance of the Italian and Yugoslav economies, which exported their products to Albania, but did not import Albanian products in large quantities, etc.

In addition to being economically far stronger, Italy was also politically far superior to the Kingdom of Yugoslavia. However, Belgrade used the moments of crisis in Albanian-Italian relations to align with Tirana, where as a result several agreements were reached between the two countries. Regardless of this fact, Italy triumphed in relation to the Kingdom of Yugoslavia, because the Albanian state was completely dependent on the support of official Rome. In contrast to Serbia and other countries of the former Kingdom of Yugoslavia, which have a very limited influence on Albanian politics, economy and culture, even 90 years later, Italy continues to have tremendous influence in Albania. In spite of their efforts, these countries continue to have little influence on Albanian politics, economy, and culture.

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