The military occupation of Czechoslovakia by Nazi Germany began with the German annexation of the Sudetenland in 1938, continued with the creation of the Protectorate of Bohemia and Moravia, and by the end of 1944 extended to all parts of Czechoslovakia.
Following the Anschluss of Austria in March 1938 and the Munich Agreement in September of that same year, Adolf Hitler annexed the Sudetenland from Czechoslovakia on 1 October, giving Germany control of the extensive Czechoslovak border fortifications in this area. The incorporation of the Sudetenland into Germany left the rest of Czechoslovakia ("Rest-Tschechei" ) with a largely indefensible northwestern border. Also a Polish-majority borderland region of Trans-Olza which was annexed by Czechoslovakia in 1919, was occupied and annexed by Poland following the two-decade long territorial dispute. Finally the First Vienna Award gave to Hungary the southern territories of Slovakia and Carpathian Ruthenia, mostly inhabited by Hungarians.
On 14 March 1939, the Slovak parliament voted unanimously to establish an independent Slovak state and German troops preemptively marched into Ostrava to prevent the Poles from occupying the region. The following day, during a visit to Berlin, the Czechoslovak president Emil Hácha was coerced into signing away his country's independence as Hungary annexed the remainder of Carpathian Ruthenia. On 16 March, Hitler proclaimed the Protectorate of Bohemia and Moravia from Prague Castle, leaving Hácha as the nominal, but almost powerless, State President. Czechoslovakia was occupied by the Wehrmacht, and real power was vested in Hitler's personal representative, the Reichsprotektor.
During the occupation, between 294,000 to 320,000 citizens were murdered, the majority of them Jews. Reprisal killings were especially harsh after the assassination of Reinhard Heydrich, including the infamous Lidice massacre. Large numbers were drafted for slave labour in Germany.
In March 1944 Germany extended the occupation of Czechoslovakia to Hungary in Operation Margarethe, then to Slovakia in August 1944 following the Slovak National Uprising. The occupation ended with the surrender of Germany at the end of World War II.
The economic crisis in Germany
Hitler's interest in Czechoslovakia was largely economic. Germany had the second-largest economy in the world, but German agriculture was not capable of feeding the population, and there was also a lack of many raw materials, which had to be imported. The Four-Year Plan that Hitler had launched in September 1936 to have the German economy ready for a "total war" by 1940 had seriously strained the German economy by 1937 as German government was forced to use up its foreign exchange reserves both to feed its own people and to import various raw materials to achieve the ambitious armament goals of the Four Year Plan. Though the Four Year Plan aimed at autarky, there were certain raw materials such as high-grade iron, oil, chrome, nickel, tungsten, and bauxite that Germany did not have and had to be imported. The need to import food and raw materials made Germany into Europe's second largest importer, being exceeded only by Great Britain. Moreover, hundreds of millions of Reichsmarks were spent on immense armament works such as the Reichswerke steel complex, an expensive program to develop synthetic fuel, as well as various costly chemical and metallurgical programs, all of which strained the German economy. The Great Depression was an era beset by trade wars and protectionism, which put further straining on the German export market and ability to generate foreign exchange. Moreover, the Four Year Plan with its aim of autarky led to Germany increasing its tariffs, which led other nations to do likewise in retaliation. The British historian Richard Overy wrote the huge demands of the Four Year Plan "...could not be fully met by a policy of import substitution and industrial rationalisation", thus leading Hitler to decide in November 1937 that to stay ahead in the arms race with the other powers that Germany had to seize Czechoslovakia in the near-future.
At the Hossbach conference on 5 November 1937, Hitler announced that seizing Czechoslovakia would increase the supply of food under German control, which in turn would lessen the need to import food, thereby freeing up more foreign exchange to import raw materials necessary for the Four Year Plan's targets. The Hossbach conference was largely taken up with an extended discussion about the necessity of bringing areas adjunct to Germany under German economic control, by force if necessary, as Hitler argued that this was the best way to win the arms race. Hitler stated: "areas producing raw materials can be more usefully sought in Europe, in immediate proximity to the Reich". Overy wrote about Hitler's attitude to the Reich's economic problems that: "He simply saw war instrumentally, as the Japanese had done in Manchuria, as a way to expand the German resource base and to secure it against other powers".
At the time, Czechoslovakia had Europe's 7th largest economy, and easily the most modern, developed, and industrialized economy in Eastern Europe. The former Austrian provinces of Bohemia, Moravia and Silesia that now comprise the modern Czech Republic had been the industrial heartland of the Austrian empire, where the majority of the arms for the Imperial Austrian Army were manufactured, most notably at the Škoda Works. One consequence of this legacy was that Czechoslovakia was the only nation in Eastern Europe besides the Soviet Union that manufactured its own weapons instead of importing them, and Czechoslovakia was the world's 7th largest manufacturer of arms, making Czechoslovakia an important player in the global arms trade.
Sudeten German pro-Nazi leader Konrad Henlein offered the Sudeten German Party (SdP) as the agent for Hitler's campaign. Henlein met with Hitler in Berlin on 28 March 1938, where he was instructed to raise demands unacceptable to the Czechoslovak government led by president Edvard Beneš. On 24 April, the SdP issued the Karlsbader Programm, demanding autonomy for the Sudetenland and the freedom to profess National Socialist ideology. If Henlein's demands were granted, the Sudetenland would be an autonomous state aligned with Nazi Germany.
I am asking neither that Germany be allowed to oppress three and a half million Frenchmen, nor am I asking that three and a half million Englishmen be placed at our mercy. Rather I am simply demanding that the oppression of three and a half million Germans in Czechoslovakia cease and that the inalienable right to self-determination takes its place.
As the tepid reaction to the German Anschluss with Austria had shown, the governments of France, the United Kingdom and Czechoslovakia were set on avoiding war at any cost. The French government did not wish to face Germany alone and took its lead from the British government, led by Prime Minister Neville Chamberlain. He contended that Sudeten German grievances were justified and believed that Hitler's intentions were limited. That made Britain and France advise Czechoslovakia to concede to the German demands. Beneš resisted, and on 20 May 1938, a partial mobilisation was under way in response to the possible German invasion. It is suggested that the mobilisation could have been launched on basis of Soviet misinformation about Germany being on verge of invasion, which aimed to trigger war in Western Europe.
On 30 May, Hitler signed a secret directive for war against Czechoslovakia to begin no later than 1 October.
In the meantime, the British government demanded for Beneš to request a mediator. Not wishing to sever his government's ties with Western Europe, Beneš reluctantly accepted. The British appointed Lord Runciman and instructed him to persuade Beneš to agree to a plan acceptable to the Sudeten Germans. On 2 September, Beneš submitted the Fourth Plan, which granted nearly all of the demands of the Karlsbader Programm. Intent on obstructing conciliation, however, the SdP held demonstrations that provoked the police in Ostrava on 7 September. The Sudeten Germans broke off negotiations on 13 September, and violence and disruption ensued. As Czechoslovak troops attempted to restore order, Henlein flew to Germany, and on 15 September, he issued a proclamation demanding the takeover of the Sudetenland by Germany.