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Germany finishes paying WWI reparations, ending century of 'guilt'

Few people in Germany noted the country's final $94 million WWI reparations payment on Sunday. Some historians say that's for the best.

By Isabelle de PommereauCorrespondent / October 4, 2010

The Reichstag building is illuminated with a German flag during a reception marking the 20th anniversary of Germany's reunification in Berlin, Germany, on Oct. 3. Germany's post-World War II division ended on Oct. 3, 1990, less than 11 months after communist East Germany opened the Berlin Wall amid pressure from massive protests.

Michael Sohn/AP

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Frankfurt

To some historians, World War I ended Sunday.

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Amid the news headlines marking the 20th anniversary of German reunification, the country quietly finished paying the last of its debt stemming from reparations imposed by the Versailles Peace Treaty more than 92 years ago.

"It's a symbol. It marks the end of World War I," says Ursula Rombeck-Jaschinski, a professor of modern history at Heinrich-Heine University in Düsseldorf. "It shows that Germany is prepared to pay back its debts after 92 years. More importantly, it also shows that Germany today is a totally different Germany than it was in the 1920s and 1930s."

Today Germany has a robust economy and is a model of financial stability, far from the heavily indebted nation that once ran up inflation and shrugged off creditors. While the last payment connected with the reparations passed virtually unnoticed here Sunday, for some Germans and many historians it marked the symbolic closing of a highly controversial treaty that ended one war and laid the foundation of another.

Seeds of Hitler’s rise

The so-called "guilt clause" of the 1919 Treaty of Versailles placed full blame for the war on Germany and ordered reparations of 132 billion German marks (roughly $400 billion in today's dollars). The debt fed a cycle of hyperinflation that pushed Germany to the brink of financial collapse.

By 1931, the international community had canceled Germany’s debts. By then the country had already paid 23 billion gold marks, or 17 percent of the Versailles demands, and still had to reimburse the foreign bonds it had issued in the 1920s to raise the reparation cash. The debt continued to fuel deep feelings of resentment, which Adolph Hitler exploited to catapult himself to power in 1934.

"Nothing played a greater role in Nazi propaganda than the refusal of Versailles and the promise to go back on the treaty," says Gerd Krumeich of the University of Düsseldorf, a World War I historian. "It gave rise to a campaign of propaganda and hatred."

"Without the Treaty of Versailles, the course of German history would have been quite different," agrees Carl-Ludwig Holtfrerich of Berlin’s Free University. "That was a lesson the Americans drew after World War II. They pleaded for a new world order where reparation was out of the question."

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