Count Clans" in Belgrade Count Ciano's visit to Belgrade has
revealed a curious conflict between the political and the economic aims of the Axis. Politically the two Powers co-operate, economically they compete. The political aims of Count Ciano's visit are reported to be to advance preparations for a non- aggression pact between Yugoslavia and Hungary and to secure an assurance of Yugoslavia's neutrality in the event of a Mediterranean conflict. In this Italy advances Ger- many's interests as well as her own; though her efforts to improve relations between Hungary and Rumania are not wholly in accordance with Germany's aims. Economically, however, Count Ciano's chief objective was to recover some of the foreign trade which Italy has lost to Germany. In the first nine months of 1938 Italy took only 6.7 per cent. as against 9.3 the year before, of Yugoslav export trade, corresponding German figures rising from 20.9 to 4o .6 per cent. Italy must copy German methods now and a large credit has been granted to Yugoslavia, which will be used to subsidise Italian trade. But though Italy may make spas- modic efforts to resist Germany's penetration of the Balkans, in the long run she must be content to take what her more powerful partner is content to leave her. At present, it is not much.
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