German Mk II tanks are seen in Wenceslas Square, Prague, April 20, 1939. During World War II, Czechoslovakia ceased to exist and was divided into the Protectorate of Bohemia and Moravia of the Third Reich and the newly declared Slovak Republic, with small slices (e.g. the Teschen) going to Poland and Hungary.
The German economy, burdened by heavy militarisation, urgently needed foreign currency. Setting up an artificially high exchange rate between the Czechoslovak Koruna and the Reichsmark brought consumer goods to Germans (and soon created shortages in Czech lands).
Czechoslovakia was a major manufacturer of machine guns, tanks, and artillery, most of which were assembled in the Škoda factory and had a modern army of 35 divisions. Many of these factories continued to produce Czech designs until factories were converted for German designs. Czechoslovakia also had other major manufacturing companies. Entire steel and chemical factories were moved from Czechoslovakia and reassembled in Linz, Austria which incidentally remains a heavily industrialized sector of the country.