How Did The Treaty Of Versailles Affect The Economy Of Germany

After World War I the German economy completely collapsed due to the effects of the conflict and the Treaty of Versailles. There were large numbers of German people out of work and the country was looking for a way back to prosperity. Adolf Hitler and the Nazi party promised a return to prosperity and power for the German people. Hitler promised to reject the Treaty of Versailles in order to restore economic strength and Germany’s rightful place at the head of the world. (History.co.uk). At first they were able to create growth through government programs, such as the autobahn and other government initiatives. These turned out to be unsustainable over the long haul. The Nazi’s had other more ambitious plans that they would rapidly begin to implement that had a dramatic effect on the economic and social conditions of Germany in WWII.

After taking control, Hitler then began his strategy of invading other European nations in order to revive

the economy and the country as a whole. Germany had limited natural resources and needed the resources of neighboring countries along with their strategic geographic locations. The Germans chose to have a dictatorship as the government because they wanted someone to follow and tell them what to do. The Nazis named their Regime the Third Reich or the third empire describing Aryan supremacy. The Nazis believed that the Aryans, or “pure Germans”, were the master race and it was their destiny to rule the world. (The Big Book of World War II, 6-7) This was the major motivating factor behind the Holocaust and other brutal acts on all non-German people that impacted social conditions in Germany.
Hitler blamed Germany’s economic failure on the Jewish people and since there were already strong anti-semitic attitudes it was easy to believe him.

In order to “cleanse society”, the Jews were thrown into the concentration camps and that started one of history’s biggest genocides. (The Big Book of World War II, 38-39) Simultaneously the Jews were stripped of their German citizenship. They were no longer permitted to hold government positions and Jewish businesses were boycotted. The Nazis began rounding up Jewish people in Germany and Austria and forcing them to live in ghettos. These communities had horrible conditions and made day to day life extremely difficult. They continued this practice after they invaded Poland and the Baltic regions. As these practices expanded, the German economy began to turn more positive. The German citizens believed that these outcomes were related to each other. But actually the positive change in the economy was mainly from the focus on the machinery and weapons production because of the

war.
After Germany surrendered to the Allies and The Soviet Union, the leaders of the four major allied nations met in July of 1945 and partitioned Germany into 4 zones of occupation. (Volume Library) Due to the destruction of the majority of the German infrastructure by the allied forces the recovery was long and difficult. The UK and France continued dismantling the German industry for, fear of the rise of the “German War Machine” once again, all the way until 1950. Complicating matters was the fact the national economy was financially destroyed by the Nazi’s desperate spending attempts to wage the war. They continued the spending binge all up to the final days of the conflict.
This led to the division of Germany into West and East Germany. The recovery for each Germany was very different and at a different pace. West Germany supported by the Allies focused on rebuilding from the destruction from the war and develop and expand its industries. West Germany had open elections and became fully sovereign in 1955. West Germany also benefited from the Marshall plan. The program provided financial and structural aid to the European economies in order to help speed the recovery process. The plan provided more than just hard dollars, it also removed trade barriers as well as removing regulations that would possibly constrain trade. The large majority of the aid was designated for the Allied countries with far less going to the Axis aligned countries. East Germany was occupied by the Soviet Union. They wanted them to be Pro-Soviet and wanted them to pay reclamation payments for war damages in the Soviet Union.(Volume Library,Chapter 26, pg 47). In fact the Soviets extracted 23% (of the East German GNP for these reparations. This demand for payments delayed the economic recovery by pulling money out of East Germany for rebuilding efforts. The work force was also reduced by refugees fleeing to the West for a better life. Over 15 years later they built the Berlin wall which divided Germany and split the recovery efforts until the wall was taken down in 1989.
World War II had a profound impact on the social and economic conditions in Germany as it did for the rest of the world. Hilter’s rise to power and his political agenda dramatically changed the course for the German economy. His “final solution” destroyed the lives of over 6 million Jews whose effects are still felt today. The German people have recovered and unified to become a stronger industrial leader in the world today.