Negotiations with the Axis powers
In March 1937, Stojadinović told Raymond Brugère, the French minister in Belgrade, that France was secure behind the Maginot Line, but the construction of the West Wall meant that the French Army would probably stay behind the Maginot Line if Germany should attack any of France's allies in Eastern Europe, which led him to conclude that Yugoslavia must not "provoke" Germany. Without informing France, Czechoslovakia or Romania, Stojadinović opened negotiations in the winter of 1936–37 for an Italo-Yugoslav treaty intended to resolve all of the outstanding problems between the two countries. On 25 March 1937, the Italian foreign minister, Count Galeazzo Ciano, arrived in Belgrade to sign the treaty alongside Stojadinović. Under the terms of the Italo-Yugoslav treaty, Italy promised to rein in the Ustasha, respect the borders of Yugoslavia, and accept Yugoslavia's membership in the Little Entente, the League of Nations and the Balkan pact in exchange for which Yugoslavia accepted Albania as being in the Italian sphere of influence. Although Stojadinović did not formally repudiate the alliance with France or the Little Entente, the Italo-Yugoslav treaty brought Yugoslavia much closer to the Axis powers, did much to weaken its existing alliances, and brought a definitive end to the French effort to strengthen the Little Entente. American historian Gerhard Weinberg summarized the effects of the Italo-Yugoslav treaty: "Having signed with Italy, he [Stojadinović] could hardly be expected to sign an agreement with France that was designed to protect Yugoslavia against her new associate. Conversely, he could not promise to assist Czechoslovakia against Germany, Italy's Axis partner. Stojadinović could, therefore, now safely assure the Germans that there would be no Yugoslav assistance pact with France".
The attempted Concordat with the Holy See caused severe protests from the Serbian Orthodox Church in 1937 and thus never came into effect. When the Concordat came up for ratification by the skupshtina on 23 July 1937, protests broke out overnight in Belgrade by Orthodox priests who called the concordat a sell-out to the Roman Catholic Church. The very night that the parliament was holding the vote to ratify the Concordat, the Patriarch Varnava of the Serbian Orthodox Church died, which Orthodox faithful saw as a sign that God disapproved of the Concordat. That the Patriarch died the same night caused an immense backlash against the Concordat among the Serbs, and the Orthodox Church announced that all Orthodox deputies in the skupshtina who voted for the Concordat were now penalised. Stojadinović withdrew the Concordat in a bid to save his popularity with the Serbs, damaging his own reputation among Croats as a fair-minded negotiator and prompting Maček to accuse him of dealing in bad faith. Thus, the failed Concordat cost Stojadinović popular support in both Croatia and Serbia. In October 1937, Maček signed an accord called the Bloc of National Agreement which brought together his own Croatian Peasant Party with the anti-Stojadinović faction of the Serb Radicals, the Democrats, the Agrarian Party and the Independent Democrats. By this time, despite the economic upturn, Stojadinović was widely unpopular owing to rampant corruption within his government. British novelist Rebecca West who went to Yugoslavia in 1937 to research her book Black Lamb and Grey Falcon reported that ordinary people had told her that Stojadinović was "a tyrant and enemy of freedom" who was "hated throughout the length and breadth of the land" amidst rumors that Stojadinović and his associates were looting the public treasury. In December 1937, Stojadinović visited Rome to meet Benito Mussolini and his son-in-law, the Foreign Minister, Count Galeazzo Ciano, both of whom he regarded as friends. Ciano wrote in his diary that Stojadinović: "...liked the Mussolini formula: strength and consensus. King Alexander had only strength. S[tojadinović] wants to popularize his dictatorship". Ciano reciprocated Stojadinović's admiration of Fascist Italy, writing in his diary he is "our sincere friend... a strong, full-blooded man with a resonant laugh and a strong handshake... a man who inspires confidence... Of all the political men I have encountered so far in my European wanderings, he is the one I find the most interesting". Although Stojadinović brought along his wife, Ciano arranged parties "with the most beautiful women of Rome society", knowing that Stojadinović was a womanizer who took many of the Roman beauties he met to his bed.
Under the Little Entente of 1921, Yugoslavia was obligated to go to war if Hungary attacked either Czechoslovakia or Romania. In January 1938, Stojadinović visited Germany to meet Adolf Hitler, assuring him that he was a personal admirer of der Führer who wanted much closer German-Yugoslav ties. Hitler assured Stojadinović that, as long as he continued his pro-German policies, Germany not only would never attack Yugoslavia, but would also not support Hungary's claims against Yugoslavia. Stojadinović promised Hitler that Yugoslavia would accept any Anschluss with Austria as Yugoslavia regarded the question of annexing Austria as an "internal" German matter. Stojadinović stated that Yugoslavia had always enjoyed good relations with Germany except when it viewed the Reich through "somebody's else spectacles" (a reference to France), leading Hitler to say that Germany no longer viewed Yugoslavia "through Viennese spectacles".
Stojadinović's remarks during his visit to Berlin led to an explosive meeting with Raymond Brugère, the French minister upon his return to Belgrade. Brugère was a bumptious character who did not always follow the niceties of diplomacy. Brugère confronted Stojadinović, expressing "astonishment" about his statements in Berlin, leading to charge that Stojadinović was abandoning Yugoslavia's friends for its enemies. Stojadinović who did not want to end the alliance with France responded by saying maintaining the alliance with France remained a "fundamental" element of his foreign policy, leading Brugère to demand proof of such intentions. Brugère demanded that staff-level talks between the Yugoslav and French armies resume and that that Yugoslavia start buying French arms again, saying that as far as he was concerned Yugoslavia was a French ally only in word, not deed.
In 1938, Germany was planning to attack Czechoslovakia and Mussolini, in a bid to assist Hitler, worked to detach Yugoslavia from the Little Entente. In June 1938, Stojadinović met with Count Ciano and promised him that Yugoslavia would do nothing if Germany attacked Czechoslovakia. In return, Stojadinović asked that the Italians use their influence with the Hungarians to keep Hungary from attacking Czechoslovakia, saying the Little Entente was directed against Hungary, and as long as Hungary remained neutral, so would Yugoslavia. After the Munich Agreement, Stojadinović appeared quite comfortable with the idea of Germany as the hegemonic power in Eastern Europe, and German-Yugoslav relations had improved so much that in late 1938, Stojadinović began talks about buying weapons from Germany for Yugoslavia. Stojadinović started to call himself vodja, Serbo-Croatian for "leader", but stopped doing so because its resemblance to the Serbo-Croatian word for "devil," djavo, led his opponents to mock JRZ supporters for hailing the "devil". Furthermore, Stojadinović's use of the title "the leader" led the Prince Regent Paul to doubt his loyalty to King Peter II.
