Economic Development

• End of hyperinflation

  Took just 3 months

  Passive resistance called off in the Ruhr which meant goods were back in production

  Ruhr occupation ended as reparations began to be repaid

  Rentenmark introduced which stabilised prices and made money rise in value

  Government began to spend less money so budget deficit would reduce
• Renegotiating reparations

  Dawes Plan (September 1924) - lowered reparation payments so they were easier to pay and loaned 800 million marks from USA

  Young Plan (January 1930) - reduced amount of reparations to be paid by 20% and allowed for postponed payments, paid over 59 years until 1988, US banks continued loaning money
• Positives

  Industrial production levels increased Exports increased by 40%

  Hourly wages rose yearly

  German company IG Farben became the largest industrial company in Europe

  Generous pension/health/unemployment schemes introduced from 1927
• Negatives

  Agricultural production did not recover to pre-war levels

  More was spent on imports than exports - loss of money

  Unemployment increased

  Industry became dependent on US loans

  Had to continue to run deficits