ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT

avatar
Created by
Jaena

Cards (6)

  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - TOV

    • Germany’s economy was devastated because of the war. The added burden on its economy came with the reparation costs it had to bear as a result of the Treaty of Versailles.
  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - Hyperinflation
    • Germany failed to pay reparations.
    • France & Belgium invaded and occupied the Ruhr Valley
    • German workers went on strike. Industrial production stopped
    • German government printed large amount of banknotes
    • Prices in Germany rose uncontrollably. Currency became worthless
    • Many Germans saw their savings wiped out. Widespread unemployment and hardship
  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - Hyperinflation

    • From 1924-1929, there was a period of hope and economic recovery under a new Chancellor, Gustav Stresemann. Some of his policies included:
    1. Replacing the old worthless currency with the new Rentenmark
    2. Negotiating the withdrawal of the French from the Ruhr Valley
    3. Getting the Allies to agree to stretch reparations over a longer period
    4. Struck deals with the USA (1924 Dawes Plan and 1929 Young Plan) for massive loans to Germany to help the economy
    • However, Stresemann passed away just before the Great Depression
  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - The Great
    Depression

    • Wall Street crash in the United States
    • US banks and businesses asked German banks to repay loans immediately
    • Sudden withdrawal of cash led to collapse of the German economy
    • Businesses went bankrupt and had to retrench the workers
    • Unemployment rocketed, reaching 6 million by 1932
    • Germans faced homelessness, starvation and suffering
    • Weimar was unable to solve the problems.
  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - Impact
    • Both economic crises made the Germans lose faith in the Weimar government, who seemed unable to solve the problems and meet their needs
    • The Great Depression in particular saw a rise in support for the Communist and Nazi parties.
    • During the crisis, the different parties in the coalition were unable to agree on the steps to take.
    • Even when President Hindenburg used Article 48 to rule by decree and tried to push through laws to help the situation, the Reichstag did not support him and the measures failed.
  • ECONOMIC CHALLENGES OF THE WEIMAR GOVERNMENT - Impact
    • When Germans saw how ineffective the Weimar government was they began to support more extreme parties like the Communists and the Nazis
    • These parties promised change and suggested strategies to improve economic situation
    • Many who were poor and desperate had nothing to lose, began supporting the Communists
    • This alarmed the middle class and businessmen
    • They began supporting Hitler and the Nazis, who were strongly anti-Communist
    • Inability of Weimar and fear of Communism led to large increase in votes for the Nazi party in elections