How did countries afford to stay neutral in wars, primarily WW1 and WW2?

Question

In WW2 the likes of Spain, Portugal and Switzerland remained neutral, how could these countries stay neutral?

What stopped the Axis powers from invading these countries to add to their countries?

In: 278

Answer 1

Germany valued the neutrality of the Netherlands In World War I because it allowed access to international trade (the British limited Dutch imports, but the Dutch could cut back on their own consumption and sell to Germany at high prices). Swiss neutrality also had value (and the costs of invasion would be high), and the same went for Sweden in both wars. Both were neutral, pro-German until late in World War II, so sold iron ore, armaments, optics and so on. Portugal was out of reach. Spain was aligned with Germany and Italy ideologically, but demanded a price Germany could not pay to enter the war on Germany’s side (guaranteed deliveries of food, oil and armaments and a slice of French North Africa).

So the belligerents and the neutrals made their calculations in each case – the costs of invasion and occupation against the value of neutral production. In Iceland’s case the Allies occupied it despite neutrality, fearing a German move and needing bases to cover the Atlantic convoy routes.