Germany still owes £50m in reparations for the First World War

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Published Date: 03 December 2009
By Allan Hall in Munich
GERMANY has still to pay off about £50 million of the notorious “reparations” demanded from it after the end of the First World War more than 90 years ago.
The German Finance Agency, the country’s authority on debt management, has revealed that tens of millions of euros are still being transferred to private individuals holding debenture bonds as agreed under the Treaty of Versailles, signed on 28 June,

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1919.

Those bonds were issued at the time to investors hoping to make money out of Germany’s financial quagmire.

“The still-open contract for interest and amortisation payments is around 56 million,” agency spokesman Boris Knapp said. “That is the debt still outstanding from all those years ago, but Germany will make good on it.”

The news that modern-day Germany is still in debt for one world war that laid the foundations for the next one was revealed by the agency after a written freedom of information request by a newspaper.

With the signing of the Versailles accord, Germany accepted blame for the war which cost nine million men their lives.

Article 231 of the peace treaty – the so-called “war guilt” clause – declared Germany and Austria-Hungary responsible for all “loss and damage” suffered by the Allies during the war and provided the basis for reparations.

The treaty was despised by Germans and seized on by the Nazis to foster a feeling of victimhood among their countrymen.

The initial agreed sum for war damages in 1919 was 226 billion Reichsmarks, a sum later reduced to 132 billion Reichsmarks. This was the equivalent at the time of some £24 billion.

France, which had been ravaged by war – its farmlands devastated by battles, its industries laid waste and some three million men killed – pushed hardest for the steepest possible 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 scale of the demands, warning correctly that it was stoking the fires for another war in the future.

“Germany will not be able to formulate correct policy if it cannot finance itself,” he warned.

When the Wall Street Crash happened in 1929, the Weimar Republic – Germany’s first and only democracy until after the defeat of Nazism in 1945 – spiralled into debt.

What the Bank of England now calls “quantitative easing” was started in Germany, with the printing of money to pay off the war debt, triggering inflation to the point where ten billion marks would not even buy a loaf of bread.

Up until 1952, Germany had paid some 1.5 billion marks in war reparations to the Allied countries. However, in 1953, the outstanding balance was suspended pending a reunification of East and West Germany.

After the two states officially became one on 3 October, 1990, the old debts went into effect again, with 20 years for them to be paid. Germany plans to pay off all its First World War debts by 3 October next year.

Can you believe this?

What do you think?

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7 Responses to Germany still owes £50m in reparations for the First World War

  1. Pedro Nardi says:

    I can believe it, because Germany had to pay £24 billion that is a lot of money, and from 1953 to 1990 they did not pay a thing so they had to pay everything they did not pay through all those years. And the debts the Wall Street Crash caused to Germany made them delay their payment, because USA was asking back their loans to Germany.
    I think that although Germany started the war and caused a lot of damage so many things were ordered to them to do, reduce their armies, pay repairments, and more, and this not only devastated Germany but she also wanted to make payback the countries that made that to her.

  2. Gitika says:

    In my opinion this is something pitiful! I can’t believe that until 2009-2010 or maybe until today Germany still owes money from the WW1, and that till today countries like France and Britain still are asking for that money. I can’t believe that those war debts were not cancelled. Germany still owes money from a war we have been studying from last year and countries are still asking for that money. It is incredible how for all this time Germany is still working on how make numbers reach to pay war debts. If it wasn’t ’cause of this I thought Germany had already payed all the debts…The Treaty of Versailles was too harsh.

  3. Nacho Salaverri says:

    Actually, i can believe it because it is normal now a days that debts from the past are still being paid. this happens to important country like Germany in this example and also our country, Argentina has that problem. the reparations debt was a huge debt because they ahd to pay for the war damages and they are still paying for them because they had to add the second world war and it recovery.

  4. Marina Menendez says:

    In my opinion, as in the treay of versailles it says that Germany should pay for all the damaged caused during WW1, i can not believe that they still havent payed. Germany should collect money from everybody from her country and pay for the money.

  5. catalina says:

    cata: i think its unbelievable, it has already past lots of years since it happened and they still owe money, i think germany should pay and forget what happened

  6. Yes I can believe it because for me it was quite obvious that Germany wouldn’t be able to pay that amount of money to the involved countries. I’m impressed about the fact that Germany was allowed in the UN while owing those debts. I think that Germany will never pay it, maybe she will pay a part of what is left, but not all of it.

  7. Francisco Vazquez Avila says:

    I need to say I’m not surprised, because Germany spent a lot of time re-negotiating the Reparations and worked a lot to buy more time to pay them.

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