The Madrid Conference was held at El Pardo, the official residence of Caudillo Francisco Franco, in Madrid, Spain, from Aril 17 to May 2, 1942. Participants were the German Empire, the United Kingdom, the United States, and Italian Social Republic. The four powers were represented by Chancellor Adolf Hitler, Prime Minister Winston Churchill, President Franklin D. Roosevelt, and Duce Benito Mussolini.
The goals of the conference were the establishment of post-war order, peace treaties issues, and countering the effects of the war in Europe.
Relationships amongst the leaders
1. The German Empire was occupying most of Europe
By July, the German Army effectively controlled the Baltic states, Poland, Austria, Belarus, Ukraine, Romania, Greece and Russia. Refugees were fleeing out of these countries fearing a German take-over. Hitler had set up a White government in Russia. He insisted that German control of Austria was a defensive measure against possible future attacks and believed that it was a legitimate sphere of German influence.
2. Italy was leaning on Germany, Britain on America
The increased dependency on Germany became known during the conference. As a result of the Italian setbacks in Greece and North Africa. The British had become the more subserviant partner in their alliance with the United States in the matter of Allied policy making and strategy. However without U.S. intervention in Europe, the British mainland was in serious danger.
3. America had an anti-Hitler President
President Roosevelt had been expressing to the U.S. Congress warnings of a potential domination by a Hitler dictatorship in Europe. He explained that "I just have a hunch that Hitler is that kind of a man" and reasoned "I don't think that if I give him everything I possibly can and ask for nothing from him in return, noblesse oblige, he won't try to annex anything and will not work with me for a world of democracy and peace."
Roosevelt became increasingly suspicious of German intentions under Hitler. Roosevelt and his advisers saw German actions in Europe as aggressive expansionism. However, the Madrid Conference marks the first time Roosevelt would ever meet Hitler in person.
Agreements made between the leaders at Madrid
- Issuance of a statement of aims of the occupation of the Soviet Union by the Axis: demilitarization, decommunization, and decentralization.
- Division of the Soviet Union respectively into four various occupation zones along the 75th meridian east. West of the 75th line to the European Axis while East would be given to the Western Allies.
- Agreement on the prosecution of Communist war criminals.
- Reversion of all Soviet annexations in Europe, including Belarus, Ukraine, Romania, and the Baltic regions
- Agreement on war reparations to the Axis from their zone of occupation in Russia.
- Ensuring that Russian standards of living did not exceed the European average. The types and amounts of industry to dismantle to achieve this was to be determined later.
- Destruction of Russian industrial war-potential through the destruction or control of all industry with military potential. To this end, all civilian shipyards and aircraft factories were to be dismantled or otherwise destroyed. All production capacity associated with war-potential, such as metals, chemical, machinery etc. were to be reduced to a minimum level. Manufacturing capacity thus made "surplus" was to be dismantled as reparations or otherwise destroyed. All research and international trade was to be controlled. The economy was to be decentralized. The economy was also to be reorganized with primary emphasis on agriculture and peaceful domestic industries. In early 1946 agreement was reached on the details of the latter: Russia was to be converted into an agricultural and light industry economy.
- A Provisional Government was set up in Austria recognized by all powers the German areas of the old empire's desire and right to join Germany.
- Czechs and Slovaks were given land to create Czechoslovakia.
- Hungary which gained the territories of Northern Transylvania, and southern Subcarpathia.
- Croatia was created out of the Slav majority areas placing Prince Sigismund of Prussia, cousin of Kaiser Wilhelm III, on the Croation throne.
- Poland would gain East and West Galacia.
- Italy lost its colonies; Italian East Africa but gainedTunisia in North Africa. In the peace treaty the Allies recognized the Albanian union with the Italy after the Italian invasion of Albania in April 1939). The Italian borders was expanded. Italy had to gained the Julian March, consisting of the provinces of Fiume, Zara and most of Gorizia and Pola. The land border with France was not modified, however the island of Corsica was given to Italy.
- Finland was restored to the borders of 1938. As part of it's participation with the Continuation War, Finland was given the Kola Peninsula and the Russian region of Karelia.
- Romania was restored to the borders of 1 January 1939, with the exception of the border with Hungary, which gained half of Transylvania. It was also confirmed that Northern Bukovina would go to Romania.
In addition to the Madrid Agreement, on April 26, Churchill, Roosevelt, Hitler and Chiang Kai-shek, Chairman of the Nationalist Government of China issued the Madrid Declaration which outlined the terms of surrender for Japan during World War II in Asia.