THE First World War finally draws to a close next week when after 92 years of shouldering a crippling debt the Germans will make their final payment of wartime reparations to the Allies.
The €69.1 million payment will end the onerous debt, the price for one world war and a cause of another.
The reparations were set at the Treaty of Versailles on June 28, 1919, by the Allied victors – Britain, France and America – as both compensation and punishment for the 1914-’18 war which left up to 10 million people dead.
The initial sum agreed for war damages in 1919 was 226 billion Reichsmarks, a sum later reduced to 132bn. At the time this was the equivalent of around €28bn – the then equivalent of 100 million kilograms of gold.
However, interest on that sum was added to considerably when Hitler rose to power and refused to foot the bill any longer. The Treaty of Versailles settlement is also credited with accelerating the Nazis’ rise to power as it was a substantial roadblock to getting the country back on a sound economic footing as money poured out of the country to finance the debt.
France, which was on its last legs after the war, pushed hardest for the maximum fiscal punishment for Germany. The principal representative of the British Treasury at the Paris Peace Conference, John Maynard Keynes, resigned in June 1919 in protest at the extent of the reparations.
The Wall Street Crash in 1929 sounded the death knell of the already feeble Weimar Republic and the country sank further and further into debt. Just four years later, Hitler was elected Chancellor of Germany and by the end of the decade, the country was at war again in Europe.
The reparation debt came back at the end of World War II, and was quickly frozen again when the nation was split into West and East Germany. Following the 1990 reunification, the debt was renewed.
“On Sunday the last bill is due and the First World War finally, financially at least, terminates for Germany,” said Bild, Germany’s biggest-selling newspaper.
Most of the money goes to private individuals, pension funds and corporations holding debenture bonds.
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