Editing World War I reparations (section)

====Overall====
During the period of reparations, Germany received between 27 and 38&nbsp;billion marks in loans.{{sfn|Boemeke|Feldman|Glaser|1998|p=417}}{{sfn|Henig|1995|p=62}}{{sfn|Mantoux|1952|p=155}} By 1931, German foreign debt stood at 21.514&nbsp;billion marks; the main sources of aid were the United States, Britain, the Netherlands, and Switzerland.{{sfn|Tooze|2007|p=7}} [[Detlev Peukert]] argued the financial problems that arose in the early 1920s, were a result of post-war loans and the way Germany funded her war effort, and not the result of reparations.{{sfn|Peukert|1993|p=62}} During the First World War, Germany did not raise taxes or create new ones to pay for war-time expenses. Rather, loans were taken out, placing Germany in an economically precarious position as more money entered circulation, destroying the link between paper money and the gold reserve that had been maintained before the war. With its defeat, Germany could not impose reparations and pay off her war debts now, which were now colossal.{{sfn|Peukert|1993|p=62}}

Historian [[Niall Ferguson]] partially supports this analysis: had reparations not been imposed, Germany would still have had significant problems caused by the need to pay war debts and the demands of voters for more social services.{{sfn|Boemeke|Feldman|Glaser|1998|pp=420–421}} Ferguson argued that these problems were aggravated by a trade deficit and a weak exchange rate for the mark during 1920. Afterwards, as the value of the mark rose, inflation became a problem. None of these were the result of reparations.{{sfn|Boemeke|Feldman|Glaser|1998|p=413}} According to Ferguson, even without reparations total public spending in Germany between 1920 and 1923 was 33 per cent of total net national product.{{sfn|Boemeke|Feldman|Glaser|1998|pp=420–421}} [[A.J.P. Taylor]] wrote "Germany was a net gainer by the financial transactions of the nineteen-twenties: she borrowed far more from private American investors&nbsp;...&nbsp;than she paid in reparations".{{sfn|Taylor|1991|p=44}} P.M.H. Bell stated the creation of a multi-national committee, which resulted in the [[Dawes Plan]], was done to consider ways the German budget could be balanced, the currency stabilized, and the German economy fixed to ease reparation payments.{{sfn|Bell|1997|p=37}} [[Max Winkler]] wrote that from 1924 onward, German officials were "virtually flooded with loan offers by foreigners". Overall, the German economy performed reasonably well until the foreign investments funding the economy and the loans funding reparations payments were suddenly withdrawn after the [[Wall Street Crash 1929|1929 Stock Market Crash]]. This collapse was magnified by the volume of loans provided to German companies by US lenders. Even the reduced payments of the Dawes Plan were mainly financed through a large volume of international loans.{{sfn|Winkler|1933|pp=86–87}}

While Germany initially had a trade deficit, British policy during the early 1920s was to reintegrate Germany into European trade as soon as possible. Likewise, France attempted to secure trade deals with Germany.{{sfn|Martel|1999|p=24}} During the mid-to-late 1920s, trade between France and Germany grew rapidly. French imports of German goods "increased by 60 per cent", highlighting the close links between French industrial growth and German production, and the increase in cooperation between the countries.{{sfn|Bell|1997|pp=38–39}}

Max Hantke and Mark Spoerer provide a different perspective on the effect of reparations on the German economy. They wrote that focusing on the reparations and inflation ignores "the fact that the restriction of the German military to 115,000 men relieved the German central budget considerably".{{sfn|Hantke|Spoerer|2010|p=849}} Hantke and Spoerer argue that their findings show "that even under quite rigorous assumptions the net economic burden of the Treaty of Versailles was much less heavy than has been hitherto thought, in particular if we confine our perspective to the Reich's budget".{{sfn|Hantke|Spoerer|2010|p=851}} They say, "though politically a humiliation", the limitation on the military "was beneficial in fiscal terms" and that their economic models show that "the restriction of the size of the army was clearly beneficial for the Reich budget".{{sfn|Hantke|Spoerer|2010|p=860}} Additionally, their economic scenarios indicate that while the Treaty of Versailles was "overall clearly a burden on the German economy", it "also offered a substantial peace dividend for Weimar's non-revanchist budget politicians." They conclude that, "The fact that [these politicians] did not make sufficient use of this imposed gift supports the hypothesis that the Weimar Republic suffered from home-made political failure".{{sfn|Hantke|Spoerer|2010|p=861}}