Ion Antonescu
Defense portfolio and the Codreanu trials

In late 1937, after the December general election came to an inconclusive result, Carol appointed Goga Prime Minister over a far right cabinet that was the first executive to impose racial discrimination in its treatment of the Jewish community. Goga's appointment was meant to curb the rise of the more popular and even more radical Codreanu. Initially given the Communications portfolio by his rival, Interior Minister Armand Călinescu, Antonescu repeatedly demanded the office of Defense Minister, which he was eventually granted. His mandate coincided with a troubled period, and saw Romania having to choose between its traditional alliance with France, Britain, the crumbling Little Entente and the League of Nations or moving closer to Nazi Germany and its Anti-Comintern Pact. Antonescu's own contribution is disputed by historians, who variously see him as either a supporter of the Anglo-French alliance or, like the PNC itself, more favourable to cooperation with Adolf Hitler 's Germany. At the time, Antonescu viewed Romania's alliance with the Entente as insurance against Hungarian and Soviet revanchism, but, as an anti-communist, he was suspicious of the Franco-Soviet rapprochement. Particularly concerned about Hungarian demands in Transylvania, he ordered the General Staff to prepare for a western attack. However, his major contribution in office was in relation to an internal crisis: as a response to violent clashes between the Iron Guard and the PNC's own fascist militia, the Lăncieri, Antonescu extended the already imposed martial law.

The Goga cabinet ended when the tentative rapprochement between Goga and Codreanu prompted Carol to overthrow the democratic system and proclaim his own authoritarian regime (see 1938 Constitution of Romania, National Renaissance Front). The deposed Premier died in 1938, while Antonescu remained a close friend of his widow, Veturia Goga. By that time, revising his earlier stance, Antonescu had also built a close relationship with Codreanu, and was even said to have become his confidant. On Carol's request, he had earlier asked the Guard's leader to consider an alliance with the king, which Codreanu promptly refused in favour of negotiations with Goga, coupled with claims that he was not interested in political battles, an attitude supposedly induced by Antonescu himself.

Soon afterward, Călinescu, acting on indications from the monarch, arrested Codreanu and prosecuted him in two successive trials. Antonescu, whose mandate of Defense Minister had been prolonged under the premiership of Miron Cristea, resigned in protest of Codreanu's arrest. Antonescu's mandate ended on 30 March 1938. He also served as Air and Marine Minister between 2 February and his resignation on 30 March. He was a celebrity defense witness at the latter's first and second trials. During the latter, which resulted in Codreanu's conviction for treason, Antonescu vouched for his friend's honesty while shaking his hand in front of the jury. Upon the conclusion of the trial, the king ordered his former minister interned at Predeal, before assigning him to command the Third Army in the remote eastern region of Bessarabia (and later removing him after Antonescu expressed sympathy for Guardists imprisoned in Chișinău). Attempting to discredit his rival, Carol also ordered Antonescu's wife to be tried for bigamy, based on a false claim that her divorce had not been finalized. Defended by Mihai Antonescu, the officer was able to prove his detractors wrong. Codreanu himself was taken into custody and discreetly killed by the Gendarmes acting on Carol's orders (November 1938).

Carol's regime slowly dissolved into crisis, a dissolution accelerated after the start of World War II, when the military success of the core Axis Powers and the non-aggression pact signed by Germany and the Soviet Union saw Romania isolated and threatened (see Romania during World War II). In 1940, two of Romania's regions, Bessarabia and Northern Bukovina, were lost to a Soviet occupation consented to by the king. This came as Romania, exposed by the Fall of France, was seeking to align its policies with those of Germany. Ion Antonescu himself had come to value a pro-Axis alternative after the 1938 Munich Agreement, when Germany imposed demands on Czechoslovakia with the acquiescence of France and the United Kingdom, leaving locals to fear that, unless reoriented, Romania would follow. Angered by the territorial losses of 1940, General Antonescu sent Carol a general note of protest, and, as a result, was arrested and interned at Bistrița Monastery. While there, he commissioned Mihai Antonescu to establish contacts with Nazi German officials, promising to advance German economic interest, particularly in respect to the local oil industry, in exchange for endorsement. Commenting on Ion Antonescu's ambivalent stance, Hitler's minister to Romania, Wilhelm Fabricius, wrote to his superiors: "I am not convinced that he is a safe man."
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