CC14 ECONOMIC Crisis in Europe After First World War

ECONOMIC CRISES IN THE EUROPE AFTER FIRST WORLD WAR
INTRODUCTION
While the war was a devastating experience for France and the United Kingdom, these
countries were able to recover economically without too much difficulty. It was Germany,
however, that particularly suffered following the war. Under the Treaty of Versailles,
Germany was required to make monetary payments to the Allies, called reparations. The
heavy reparations, combined with the devastated economic infrastructure throughout
Germany and political tension under the Weimar Republic, led to an economic depression.
Hyperinflation and unemployment in Weimar Germany were staggering. Reichsmarks, the
German currency, became so devalued, that it took wheelbarrows full of money to buy
basic items, such as a loaf of bread. One famous photograph shows children flying a kite
made out of reichsmarks sewn together.
In the mid to late 1920s, the German economy stabilized somewhat, but after the American
stock market crash in 1929, the Great Depression spread to Germany. From 1929 into the
early 1930s, depression again wreaked havoc on German society. It was under these
conditions that the Nazis were able to come to power.
EFFECTS OF ECONOMIC CRISIS ON EUROE
The economic crisis of the 1930s had a profound effect on European politics. The vicious
circle of underdevelopment, unemployment and poverty that started in 1929 created
massive social problems and thus favoured the strengthening of extremist parties,
especially far-right ones. The case of Germany was probably the most characteristic and
definitely the most important one as far as its long-term consequences were concerned.
Before 1929 Adolf Hitler’s National Socialist party was nothing more than a marginal
political force. In the German federal elections of May 1928 they won only 2.63 % of the
vote. Just two and a half years later, in September 1930 they secured 18.25 %. In the
elections of July 1932 they came first with 37.27 %, a place that they managed to hold in
November of the same year despite the fact that their share of the vote was reduced to
33.09 % (Gonschior 2005). On 30 January 1933 Hitler became chancellor of Germany and
gradually began to impose his dictatorial and racist regime. The Weimar Republic was dead.
Europe was, little by little, sliding towards the abyss of the Second World War.
CONCLUSION
Summing up the findings of the books presented that the First World War caused
considerable and far-reaching consequences for the economies of most of the industrial
countries in Europe. The old economic order was destroyed, while the new was faced with
a vast range of problems obstructing economic recovery and destabilising attempts to find
the way back to self-sustaining economic growth. In particular, the unsolved problem of
reparations for a long time caused problems in the monetary system as well as in trade
policy. Moreover, attempts to establish a policy of co-operation between the former
enemies, and even between former allies, were overshadowed by reparations, war debts
and monetary difficulties. This has been revealed clearly by the studies presented here.
What made the situation even worse was the lack of an adequate economic policy during
the Great Depression, which on the other hand was due to weak economic co operation
between the most important countries. The long-lasting atmosphere of mistrust and
political conflicts caused by unresolved economic problems also formed a major obstacle to
finding solutions in the times of the severest economic difficulties the world had ever seen.
Despite all attempts to achieve closer co operation and to reduce tension and hostility, as
for example Briand and Stresemann had intended, political mistrust and differing points of
views over how to solve political and economic problems remained a common feature and
experience in the majority of European countries during the whole interwar period. This
can be regarded as a specific heritage of the First World War, as all the studies reveal
clearly. This situation formed an explosive mixture which paved the way for growing
political tension and, eventually, World War Two at the end of the 1939.
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ECONOMIC CRISES IN THE EUROPE AFTER FIRST WORLD WAR

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