The treaty strained Germany's economy and gave enemies of democracy a grievance to attack the new government.
Reparations and lost resources put pressure on Germany's damaged economy. In 1923, Germany fell behind on the goods it owed as reparations. French and Belgian troops occupied the Ruhr, a key industrial region, to force payment.
The German government told workers to refuse to cooperate with the occupiers. This was passive resistance. The government kept paying these workers while production fell, and printed more money to cover its costs. This made an existing inflation problem far worse. Prices rose extremely fast, which is called hyperinflation, and many people's savings became worthless. Reparations were only part of the cause; war debts and government decisions also mattered.
Germany's new democracy, the Weimar Republic, was blamed for accepting the treaty. Nationalists, who stressed German strength and pride, used its terms to attack democratic leaders as traitors. They pointed to the small army and lost land to argue the government had let Germany down.
But this resentment did not make Nazi rule or another war certain. Germany stabilised its currency in late 1923. Negotiations and foreign loans helped the economy recover in the mid-1920s. Later events, especially the Great Depression, help explain why Hitler gained power in 1933.
- Ruhr, 1923
- French and Belgian troops occupy it over unpaid reparations.
- Hyperinflation, 1923
- Prices soar and savings become worthless.
- Weimar Republic
- Blamed by nationalists for accepting the treaty.
Worked example: Turn a list into a chain
A paragraph says: there were reparations; the Ruhr was occupied; Germans lost savings.
- Germany falls behind on reparations, so France and Belgium occupy the Ruhr.
- The government pays striking workers by printing money.
- This drives hyperinflation, so savings lose value and trust falls.
Watch out for this
Versailles made Hitler chancellor straight away.
Hitler became chancellor in 1933, after the Depression. Germany recovered for a time in the mid-1920s.
Check your understanding
Why did hyperinflation happen in 1923?
- The government printed money to pay workers resisting the Ruhr occupation.
- Germany paid off all its reparations at once.
- The Great Depression began in 1923.