On this day 90 years ago, the end of German reparations payments after the First World War was decided. Many of you may remember the Treaty of Versailles from history classes, where it is often portrayed as decidedly harsh and one of the reasons for the fall of the Weimar Republic. For example, Germany lost about 13% of its previous territory in the peace treaty, while Austria-Hungary and the Ottoman Empire were virtually dissolved. The reparations payments, too, although a burden on the German economy, were quite manageable.

The reduction, postponement and final termination of reparations payments was a longstanding goal of German foreign policy. Several plans were negotiated to settle the payments without too much harm to the world economy and the German economy.

The German government deliberately left the inflation rate high in order to exploit it as a reason for default.

Weakening Germany to prevent another attack was France’s top priority after the war. This included paying for the Allies’ war expenses and separating the Rhineland from Germany.

As a result of the Great Depression, Germany was found no longer able to pay reparations at the Lausanne Conference in 1932 and was to make only a smaller residual payment over the next 15 years, rather than the previously envisioned payment into 1988.