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Germany puts Versailles behind it with final reparation payment

Published: 29 Sep 2010 11:39 GMT+02:00
Updated: 29 Sep 2010 18:30 GMT+02:00

Germany is to pay €69.9 million this Sunday – which coincides with the 20th anniversary of German reunification – as a final payment on the massive debt it owed to the Allied countries after the war ended in 1918.

The payment, which covers interest on bonds issued by the German government, will bring to an end the country’s financial obligations covering the destruction wrought by WWI, the Federal Office for Central Services and Unresolved Property Issues told news magazine news magazine Der Spiegel on Tuesday.

Under the 1919 Treaty of Versailles, the victorious allies ordered Germany to pay 132 billion Reichsmarks – a little under €300 billion in today’s money – a sum that crippled the already battered nation. Anger among Germans over the size of the reparations payments and the allies’ insistence that Germany take sole responsibility for the First World War helped pave the way for the Nazis’ rise to power.

Germany stopped making the payments in 1931 to cope with the Global Depression and when Adolf Hitler’s Nazis came to power in 1933, they refused to resume the payments.

Ursula Rombeck-Jaschinski, a historian who has written a book on the London Agreement, told The Local that this last payment was “in principle … the end of World War I.”

“The London debt settlement (of 1953) was an absolute milestone. It was the key to getting back into the western world because Germany showed that she is a reliable debtor – and paying her debts was the basis for the future.

“So in principle it is the end of World War I, now that these funding bonds are fully paid.”

Whether it would make the average German feel any different was another matter, however.

“I don’t think many people actually knew about it,” she said.

Sunday's sum is the final payment on interest accrued between 1945 and 1952 on foreign bonds the German government had issued between the two world wars to raise capital for Treaty of Versailles payments.

The money Germany pays on Sunday will therefore actually go to private investors who own these bonds.

The actual reparations payments themselves were finished in 1983. Under the London Agreement on German External Debts, signed by then Chancellor Konrad Adenauer in 1953, Germany was excused from paying off the €125 million in interest on the bonds until after the country was reunified.

This last payment will come exactly 20 years after East and West Germany were formally reunited following the fall of the Berlin Wall and the end of the Cold War.

The Local/dw

The Local (news@thelocal.de)

Your comments about this article

12:05 September 29, 2010 by Aschaffenburgboy
Does this mean lower taxes for us?
12:15 September 29, 2010 by pepsionice
@ Aschaffenburgboy

There's a law in Germany against lower taxes. You can't possibly be serious. There are a hundred German economists working on newer and more creative taxes in the years and decades to come.
12:21 September 29, 2010 by retprob
Versailles is finally buried.Can we please get back to the business of world domination now??
13:03 September 29, 2010 by DepotCat
Interesting. It seems while the U.K paid off it's World War 2 debts, those from World War I remain unpaid. In 1934, Britain owed the US $4.4bn in World War I debt, roughly £866m at the 1934 exchange rates.

"We just sort of gave up around 1932 when the interwar economy was in turmoil, currencies were collapsing," says Prof Harrison of Warwick University

Britain is also owed money. These war loans remain in limbo. The UK Government's position is this: "Neither the debt owed to the United States by the UK nor the larger debts owed by other countries to the UK have been serviced since 1934, nor have they been written off."

Source...The BBC:

http://news.bbc.co.uk/1/hi/magazine/4757181.stm
16:47 September 29, 2010 by chrishale53
So just remind me why Germany started these very expensive wars?
19:25 September 29, 2010 by DinhoPilot
@chrishale53

There are several answers to your question depending on the point of view!

Some will say Germany was forced by the Allies to start the wars... long story.

Others will say UK attacked Germany.

Also the most know reason was the nazi expansion plans.

But again in the end I really don't know why... just that it wasn't right!
20:01 September 29, 2010 by bramblebush
Did Austria, Hungry and Turkey have to pay or was it just Germany?
02:21 September 30, 2010 by DavidtheNorseman
@DepotCat....I doubt the Bulgarian or Russian monarchies are ever going to pay back their 100 year old debts to Merry Old England LOL

I think I'm owed war reparations from .. wait we of Norwegian stock usually did the agressing and though the Swedes sometimes attacked we wouldn't want them to add up both totals so I'll just be quiet about 1814... :-) There is the issue of whether the English paid us enough for the Isle of Mann in 1266 though....750 years at 7% on ... :-)
02:58 September 30, 2010 by ngwanem
and when would the debt of the transatlantic slave trade and colonialism be paid??? all rubbish with such news, because neither the french public nor the german public would gain from reparations... a private few fund wars and gain from it afterward...

"The money Germany pays on Sunday will therefore actually go to private investors who own these bonds."

what else do we need to know? people wake up and stop servicing private pockets, for a war/conflict you never created ... do they mean to tell us that we should pay for what was committed in the past?

should we postulate that our ancestors mortgaged our futures?
03:52 September 30, 2010 by ww77ww
Something ironic about paying debts for a settlement that led to the worst war in the history of western civilization, which stunts Europe to this day.

The proceeds going to private investors, undoubtedly in the top tenth of a percent, should tell everyone about the reality of this world, who pays (via lives and money) and who profits.

No matter, looking at those old "allies" today, it's hard to imagine they won anything. This money will eventually end up in China. It'd be something to see the limeys and amis pay for their generations of crime. Germany is more or less the only nation able to face the past.
06:57 September 30, 2010 by ErickDDiaz
Just keep paying your Taxes to fund the Bush /Obama wars.
07:27 September 30, 2010 by JohnPaul44
Germany should be praised for paying off its "alleged" Versailles debt while other countries have routinely reneged on their war debts. Germany did not "start" World War I. It simply recognized treaty obligations and came in on the side of Austria after Russia came in on the side of Serbia. In all my history reading, I am still not clear how or why Britain managed to join in this big-money game, but after the war, France and Britain certainly seized the opportunity to blame Germany and impose outrageous and unjustified penalties on Germany in a cynical effort to prevent Germany from becoming a future economic competitor. The Nazis would never have had any appeal to the German people without the economic disaster caused by the unfair provisions of the Treaty of Versailles. It can fairly be said that Britain and France caused World War II by their greedy efforts to suppress German economic recovery.

.
08:46 September 30, 2010 by lordkorner
Phew,finally got that out of the way...next item please.
09:44 September 30, 2010 by JohnPaul44
I have noticed before that economics tends to put people to sleep. Sorry!
19:58 September 30, 2010 by MaKo
Hey, Local, congratulations on being on NPR's Morning Edition!
14:44 October 1, 2010 by tallady
The treaty of Versailles 1919 was draconian by any measure. Germany, arguably the most civilized nation on earth in 1914, was required to accept full responsiblity for starting the war - a ridiculous requirement by France and Britain that was not only false but required a proud nation to humiliate herself. (in truth the war was started by a terrorist state, Serbia and expanded by Russia, the first to militarily mobilize). The great German army and navy were ordered disbanded and scuttled respectively. Submarines and aircraft were banned entirely. 100% of German overseas possessions were stripped away (even in her wildest fantasies, the German leadership had never considered stripping their enemies ENTIRELY of their colonies). Huge amounts of European territory were stripped away and given to competitors, leaving large German minorites behind foreign borders. Economically the Allies demanded the largest reparations settlement in the history of the world. Finally, to further crush the German economy, Germany was required to give up 100% of her patents (Germany being the world leader in chemistry and physics, this was a major blow). In no time in recent history had vanquished nation been so harshly treated. Only the victims of Ghengis Khan or Rome over Carthage would compare in cruelty.
18:16 October 1, 2010 by Prufrock2010
For the uninitiated, Ernst Zundel is one of the most visible and outspoken neo-nazis in North America. He runs his little operation from his basement in Toronto, and has direct links to all the major neo-nazis in Germany, particularly Ewald Althans. I never thought I'd see the day when I'd read a defense of the slimeball Zundel on a German website that is not run by nazis.

For more on Zundel and Althans, I recommend the excellent documentary "Beruf Neonazi." You'll be able to hear them in their own unvarnished words and watch them in action with no editorial narrative. None is needed.
23:14 October 1, 2010 by DrGideonPolya
Well, that's WW1finally paid for by Germany (if not by the Allies who were equally culpable) but now Germany needs to pay up remaining reparations owed for the following atrocities.

1. Namibian Genocide. 100,000 Namibians butchered in the 1904-1907 Namibian Genocide in "German" South West Africa.

2. Armenian Genocide. 1.5 million Armenians were killed by Germany's WW1 ally Turkey in the 1915-1923 Armenian Genocide using German weapons and techniques used by the Germans in Namibia (notably driving populations into the desert to die).

3. WW2 Holocaust. 30 million Slavs, Jews and Gypsies were killed in the WW2 Holocaust and billions of dollars worth of property seized and never returned. Indeed Germany as part of the EU supported the 2004 entry of Hungary into the EU which retrospectively approved permanent theft of seized Jewish property (including that of members of my family). We want it back with interest.

4. Palestinian Genocide. Post-war Germany gave billions of of reparations as well as diplomatic support that went to support the ongoing Palestinian Genocide (post-1967 excess deaths 0.3 million, under-5 infant deaths 0.2 million; 7.5 million refugees; 4 million Occupied Palestinians under abusive military rule since 1967 and without human rights; 1.5 million Occupied Palestinians (including 800,000 children) incarcerated in what the Catholic Church described as Israel's Gaza Concentration Camp; only 13% of Palestinians are eligible to vote for the Government of Apartheid israel that has been ruling all of Palestine plus, variously, chunks of of Syria , Egypt and,Lebanon, 1950-2005 excess deaths in countries occupied by Apartheid Israel now total about 24 million.

5. Afghan Genocide. Germany is still involved in the US-led Afghan Holocaust and Afghan Genocide (post-invasion non-violent deaths from deprivation 3.5 million; post-invasion violent deaths perhaps 1 million; post-invasion under-5 infant deaths 2.4 million; 3-4 million Afghan refugees; the annual death rate is 7% for Afghan infants as compared to 4% for Poles under Nazi Germany).

All decent folk believe that "all men are created equal" and the US EPA values an American human life at about US6.9 million and accordingly US$6.9 million x 4.5 million deaths = US$31 trillion owed by the US Alliance (including Germany) for the Afghan Genocide alone).
23:35 October 1, 2010 by JohnPaul44
@aubreyfarmer

Wow! So the Jews rule the world and have caused all our problems? I say, if you can't beat them, join them! Where can I convert to Judaism?
23:44 October 1, 2010 by Prufrock2010
I'm sorry you missed my comment on the thread about the guy who killed his teacher, John Paul. I was looking forward to your response. We may have more in common than you think.
04:56 October 3, 2010 by JohnPaul44
Hello, Profrock,

As rational, thinking human beings, we have much in common. We both see many of the same problems, but have different ideas about the best solutions.
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