Tuesday, September 28, 2010

The last act of World War One?

It was reported today that on Sunday, October 3, 2010, Germany will make the final payment on reparations due to the victorious Powers in terms of the Treaty of Versailles that concluded World War I.

World War One finally ends for Germany on Sunday with the last payment of nearly £60 million [almost US $95 million] of a mammoth £22 billion [almost US $35 billion] debt imposed for starting the Great War.

The reparations were set at the Treaty of Versailles on June 28, 1919, by the Allied victors - mostly Britain, France and America - as both compensation and punishment for the 1914-18 war which, before World War Two, was the bloodiest in history.

Most of the money was intended to go to Belgium and France, whose land, towns and villages were devastated by the war, and to pay the Allies some of the costs of waging it.

The initial sum agreed upon for war damages in 1919 was 226 billion Reichsmarks, a sum later reduced to 132 billion. In sterling at the time this was the equivalent of some £22 billion.

The German Federal Budget for 2010 shows the remaining portion of the debt that will be cleared on Sunday, October 3.

The bill would have been settled much earlier had not one Adolf Hitler reneged on reparations during his reign.

Hatred of the settlement agreed at Versailles, France, which crippled Germany as it tried to shape itself into a democracy following defeat in the war, was of significant importance in propelling the Nazis to power.

West Germany, formed after defeat in 1945, took on responsibility for most of the outstanding principle and interest, settling the bill in 1983.

But there was a clause in the so-called London Debt Agreement of 1953 that interest on multi-million pound foreign loans taken out in the Weimar Republic era, to pay off the reparations bill, should themselves be repaid if Germany were ever reunited.

Payments on this interest began again in 1996.

'On Sunday the last bill is due and the First World War finally, financially at least, terminates for Germany,' said Bild, the country’s biggest selling newspaper.

Most of the money goes to private individuals, pension funds and corporations holding debenture bonds as agreed under the Treaty of Versailles.

There's more at the link.

It's an odd feeling to read this news, and realize that payments were continuing even after so long. My grandfathers both fought in World War I. As a very young child, I can recall my maternal grandfather coughing and spluttering through his final years of life - the result of injuries sustained in a German gas attack on the Western Front, from which he never fully recovered.

Gas attack during World War I (image courtesy of Wikipedia)

The fallout from the Treaty of Versailles led inexorably to World War II, in which my father fought, and my mother went through years of German air raids, standing watch at night with a stirrup pump and a bucket to extinguish incendiaries before they could burn through roofs and set fire to buildings.

I suppose Sunday's payment will, in one sense, also be a closure for my family, even though neither of my parents or any of my grandparents are alive to see it. I'll hoist a glass to their memory on the occasion, for old times' sake.


1 comment:

Anonymous said...

Interesting. I'll forward to my friend, a college history professor.

If memory serves, it took the USA about as long to pay off the debts from the Revolution (sometime in the 1830's). I don't know how we'll pay off Obama's trillions, though.

Ulises from CA.