In the wake of a world financial crisis, the King encouraged the formation of a National Government in 1931 led by MacDonald and Baldwin, and volunteered to reduce the civil list to help balance the budget. He was concerned by the rise to power in Germany of Adolf Hitler and the Nazi Party. In 1934, the King bluntly told the German ambassador Leopold von Hoesch that Germany was now the peril of the world, and that there was bound to be a war within ten years if Germany went on at the present rate; he warned the British ambassador in Berlin, Eric Phipps, to be suspicious of the Nazis.