New lands and peoples

World War I proved decisive in the development of modern Romania. In 1916 the country entered the war on the Allied side in return for French and British promises of territory (in particular Transylvania) and a steady supply of war matériel through Russia. But the war went badly, and by the end of the year the Romanian army and government had been driven back into Moldavia. The Russian Revolution cut Romania off from all Allied assistance and forced it to conclude a separate peace with the Central Powers in May 1918. Upon the Central Powers’ collapse later that year, Romania reentered the war in time to gain a victor’s place at the Paris Peace Conference. But victory had come at the cost of enormous human and material destruction.

As a result of the war, Greater Romania—the expanded nation-state encompassing the majority of Romanians—came into being. Through the acquisition of Transylvania and the Banat from Hungary, Bukovina from Austria, and Bessarabia from Russia, the country’s territory was doubled. Romania’s population also doubled to more than 16 million—and it now included substantial minorities, particularly Hungarians in Transylvania and Jews in Bessarabia, which raised the non-Romanian population to almost 30 percent of the total.

The majority of Hungarians chose to stay in Transylvania rather than emigrate to Hungary, so in 1930 they formed 31 percent of the population of the province. Nonetheless, they strove to preserve their ethnic and cultural distinctiveness and resisted integration into Greater Romanian society. The Romanian government—and Romanians generally—remained wary of Hungarian irredentism, the centre of which, they were certain, was Budapest, and they rejected demands from the Hungarians in Transylvania for political autonomy. The German-speaking Saxons, 7.7 percent of the population of Transylvania in 1930, were also eager to maintain their ethnic separateness in the face of Romanian nation building, and, to a certain extent, they succeeded at the local level. The Jewish community, 4.2 percent of the country’s population in 1930, was subject to discrimination, as anti-Semitism had adherents in all social classes—although acts of violence were rare until the outbreak of World War II.

From democracy to dictatorship

The fundamental political issue in interwar Romania was the struggle between parliamentary government and authoritarianism. In the 1920s the prospects for democracy seemed bright, for the two strongest parties supported representative institutions. The Liberal Party, the dominant political force of the decade, sponsored a revision of the constitution in 1923 that protected middle-class political and economic values. The National Peasant Party was headed by the recognized pillar of Romanian democracy, Iuliu Maniu. Its overwhelming victory in the elections of 1928, the freest in Romanian history until the 1990s, was the high point of Romanian democracy.

Two events boded ill for the future of democracy: the accession of Carol II to the throne in 1930 and the world economic depression. The new king had a disdain for democracy and intended to make himself the “decisive force” in national affairs. He was aided by the collapse of agricultural prices and widespread unemployment, which undermined confidence in democratic government and encouraged many to seek salvation in extremist politics. Some joined the Iron Guard, the most-successful political movement on the far right, which propounded a mixture of nationalism, Orthodox spirituality, and anti-Semitism. Few Romanians were attracted to the Romanian Communist Party; outlawed in 1924, it carried on a precarious existence because of its subordination to the Soviet Communist Party, its antinationalist stance, and its neglect of peasant interests. Carol’s solution to the country’s problems was to proclaim a royal dictatorship in 1938 and to dissolve all political parties.

In foreign policy the primary objective of all interwar Romanian governments was to protect the frontiers of Greater Romania. Eager advocates of the principle of collective security and staunch defenders of the international system constructed by the treaties of Paris, they helped to form regional alliances (notably the Little Entente in 1921 and the Balkan Entente in 1934) and adhered to international peace and disarmament conventions. But they saw in France and Britain the chief guarantors of the postwar international order.

The foundations of this foreign policy were gradually undermined in the 1930s. Faith in France and Britain was shaken by the indifference of those two countries to the economic plight of Romania during the Great Depression and by their failure to counteract Germany’s repeated violations of the Treaty of Versailles. Relations with the Soviet Union continued to be strained over Bessarabia, and even the resumption of diplomatic relations in 1934 did not relieve Romanian politicians of the fear of attack. They looked to Germany for protection, but to no avail. The German-Soviet Nonaggression Pact of August 23, 1939, and the defeat of France in June 1940 deprived Romania of Great Power support. Between June and September 1940 the Soviet Union took Bessarabia and northern Bukovina, Hungary took northern Transylvania, and Bulgaria took the southern Dobruja. King Carol’s dictatorship could not survive the catastrophe, and he was forced to abdicate on September 6.

Shifts in society and economy

Romanian society and economy between the wars offered striking contrasts between persistent underdevelopment and burgeoning, if uneven, industrialization and urbanization. Massive land reforms, undertaken in 1918–21, transferred 15 million acres (6 million hectares) from large landowners to smallholders, thus reinforcing peasant agriculture. Geared to the raising of grain for export, it was inefficient in organization and primitive in technology and could not keep up with overpopulation and crushing debt. Meanwhile, industry registered impressive increases in steel, coal, and oil production. By 1939 almost all domestic needs for food, textiles, and chemicals could be met by domestic producers, but Romanian industry could not yet provide all the technology and machines necessary for its own continued growth.

The state expanded its role as a coordinator of the economy, thanks mainly to the Liberals, who were eager to build a strong economy and thereby consolidate the new nation-state. Convinced that the era of classical economic liberalism had passed, the Liberals were committed to a directed economy based on systematic organization and well-defined goals. They focused their attention on industry as the most certain way of bringing Romania into the modern world and provided favoured industries with numerous advantages, including direct financing. The Liberals were also economic nationalists who were anxious to avoid economic subordination to foreigners. But they were also realists: knowing that domestic capital was inadequate for their purposes, they cultivated good relations with the Western powers, which controlled international commerce and financial markets.

The structure of Romanian society continued to follow prewar patterns. The population grew steadily, because of a high birth rate in rural areas, but the mortality rate, especially among children, also remained high. The majority of the population continued to live in the countryside and to depend on agriculture as their primary source of income. Social differentiation, one of the consequences of growing capitalist relations, sharpened the distinction between well-off peasants and the majority of smallholders, who lived on the edge of poverty. The great landowners as a class had disappeared with the postwar land reforms, and their place was taken by a gentry that was largely middle-class in outlook. Romanian society as a whole was becoming more urban, as the number and size of cities increased and their role in the national economy expanded. Bucharest, by far the largest city, occupied a special place as the capital and as the industrial, financial, and cultural centre of the country. It was from there that the middle class, which had now come into its own, exercised its immense economic and political power.

Among social theorists and politicians, the prewar debate over national identity and over models of development intensified with the creation of Greater Romania. The “Europeanists,” such as the literary critic Eugen Lovinescu, saw no alternative to the Western model, since Europe intellectually was drawing closer together. On the opposite side were the “traditionalists”—for example, the journalist and theologian Nichifor Crainic—who insisted that the country remain true to its Eastern Orthodox spiritual heritage. In between stood the economist Virgil Madgearu, who advocated a “third way” of development, neither capitalist nor collectivist but rooted in small-scale peasant agriculture.

World War II

Theories of development became academic during World War II. In September 1940 General Ion Antonescu forced Carol II to abdicate, and Antonescu and the Iron Guard established an authoritarian National Legionary State. Never a member of the Guard, Antonescu nonetheless intended to use its popularity to rally support for the new regime. Yet, despite their shared contempt for democratic institutions, these new partners were incompatible. Antonescu stood for order, while the Guard shunned economic and social planning. Mutual hostility culminated in open war in January 1941. Antonescu, supported by the army, was victorious and destroyed the Guard as a significant political force. For the next three and a half years he ruled the country as a military dictator.

Antonescu based his foreign policy on an alliance with Germany, which he was certain would win the war. In June 1941 he (and the majority of Romanians) joined enthusiastically in the German invasion of the Soviet Union in order to gain back Bessarabia and northern Bukovina and to end the Soviet threat once and for all. But Antonescu showed little restraint in committing Romanian manpower and resources to the German war effort, for he expected thereby to recover northern Transylvania. The consequences proved disastrous, and after the Battle of Stalingrad he lost hope that Germany would win the war.

The main concern of both Antonescu and the democratic opposition, led by Iuliu Maniu, was to avoid being overrun by the Red Army. But complex negotiations between Maniu and the Western Allies in 1944, which were intended to allow Romania to surrender to the West, obliged the Romanians instead to deal directly with the Soviet Union. As Antonescu clung desperately to the German alliance, Maniu and King Michael, who had succeeded his father, Carol II, took the initiative in overthrowing the dictatorship on August 23 and in establishing a new government committed to the Allied war effort against Germany. The occupation of Bucharest by the Red Army a week later marked the beginning of a new era in Romanian history.