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Treaty of Versailles’ “war guilt clause
- Allied victors took a punitive approach to Germany at the end of World War I. Intense negotiation resulted in the Treaty of Versailles’ “war guilt clause,” which identified Germany and its allies as the sole responsible parties and forced them to pay reparations. Germany had suspended the gold standard and financed the war by borrowing.
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Following the Second World War, West Germany took up payments. The 1953 London Agreement on German External Debts resulted in an agreement to pay 50 percent of the remaining balance. The final payment was made on 3 October 2010, settling German loan debts in regard to reparations.
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After the Treaty of Versailles called for punishing reparations, economic collapse and another world war thwarted Germany's ability to pay.
At the end of World War I, Germans could hardly recognize their country. Up to 3 million Germans, including 15 percent of its men, had been killed. Germany had been forced to become a republic instead of a monarchy, and its citizens were humiliated by their nation’s bitter loss.
Even more humiliating were the terms of Germany’s surrender. World War I’s victors blamed Germany for beginning the war, committing horrific atrocities and upending European peace with secretive treaties. But most embarrassing of all was the punitive peace treaty Germany had been forced to sign.
The Treaty of Versailles didn’t just blame Germany for the war—it demanded financial restitution for the whole thing, to the tune of 132 billion gold marks, or more than $500 billion today.
How—and when—could Germany possibly pay its debt?
Nobody could have dreamed that it would take 92 years. That’s how long Germany took to repay World War I reparations, thanks to a financial collapse, another world war and an ongoing debate about how, and even whether, Germany should pay up on its debts.
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In an attempt to thwart disaster, President Herbert Hoover put a year-long moratorium on reparation payments in 1931. The next year, Allied delegates attempted to write off all of Germany’s reparations debt at the Lausanne Conference, but the U.S. Congress refused to sign on to the resolution. Germany was still on the hook for its war debt.
Soon after, Adolf Hitler was elected. He canceled all payments in 1933. “Hitler was committed to not just not paying, but to overturning the whole treaty,” historian Felix Schulz told the BBC’s Olivia Lang. His refusal was seen as an act of patriotism and courage in a nation that saw the reparations as a form of humiliation. Germany made no payments during Hitler’s rule.
But Germany wasn’t destined to win the war, and the Third Reich ended with Hitler’s suicide in April 1945 and Germany’s official surrender a few days later. By then, the country was in chaos. Millions of people had been displaced. Over 5.5 million German combatants, and up to 8.8 million German civilians, were dead. Most of Germany’s institutions had crumbled, and its populace was on the brink of starvation.
The Allies exacted reparations for World War II, too. They weren’t paid in actual money, but through industrial dismantling, the removal of intellectual property and forced labor for millions of German POWs. After the surrender, Germany was divided into four occupation zones, and in 1949 the country was split in two. Economic recovery, much less reparations payments, seemed unlikely.
Oct 21, 2024 · The war guilt clause of the treaty deemed Germany the aggressor in the war and consequently made Germany responsible for making reparations to the Allied nations in payment for the losses and damage they had sustained in the war.
- The Editors of Encyclopaedia Britannica
These treaties stripped the Central Powers (Germany and Austria-Hungary, joined by Ottoman Turkey and Bulgaria) of substantial territories and imposed significant reparation payments. Seldom before had the face of Europe been so fundamentally altered.
Oct 2, 2010 · Germany is finally paying off World War I reparations, with the last 70 million euro (£60m) payment drawing the debt to a close. Interest on loans taken out to the pay the debt will be...
Jun 25, 2019 · That provision became the basis for the Allies for demand that Germany pay reparations, which were set by a series of conferences in 1920 at $33 billion (about $423 billion in 2019 dollars).
The Allies’ determination to extract reparations from Germany hindered the nation’s recovery after World War I. Vast sums of money were demanded from Berlin, compensation for the Kaiserreich’s role in instigating war.
