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How Did The Treaty Of Versailles Affect The Economy

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The Treaty of Versailles was created at the Paris peace conference to officially end World War 1. It was negotiated between the allied powers to meet their individual goals and punish Germany. World War One was fought mainly in central Europe but countries from all over the world were involved. The allied powers include England, France, United States, Italy, and Japan. The central powers were Germany, the Ottoman Empire, Austria-Hungary, and Bulgaria. It is important to note that since the allied powers won the war they believed that they did not need to include the central powers. The Treaty of Versailles was supposed to created peace but instead created another war. The treaty had unreasonable terms, caused many economic problems, left many …show more content…

Their economy was dependent on trade, iron, coal and its tariff and transport system (Keynes). The treaty affected all parts of their economic system by giving overseas colonies and their transport systems to allied countries. Now, the Germans could not export goods to other countries which hurt their economy. They also had to pay large sums of money from the reparations in the treaty but there was no way for the country to pay the money since they had no flow of money coming into the economy because of the terms of the treaty, making its economy suffer greatly. The territorial loss of Alsace-Lorraine proved to be detrimental to the German economy since 75% of the iron came from the ore-fields in that area. Also, the areas of Saar Basin and Upper Silesia contained a majority of the coal fields (Keynes). The economy and country were dependent on coals since they export it to many different countries in Europe, with the terms of the treaty they were required to send tons of coal to France, Italy, and Belgium as a part of the Reparation payments (Keynes). With the territorial losses, there was also a loss in industries in those certain areas that were now in control of the allied countries. As stated before the reparations from the treaty of were extreme and greatly hurt the German economy. The country barely had any money coming into their economy because of the lost territory and the inability to export good outside of the country, so any income they did have went directly to paying the reparations. This caused the country to pay off their debts years after world war 1 ended. All of this affected the economy and weakened the country tremendously, but it did fuel the German people to become a stronger country and take back what originally belonged to

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