Germany had many economic and political problems after the war.
- Bankruptcy - no gold reserves and all money used for reparations, could no longer pay.
- France occupied the Ruhr (industrial area).
- Hyperinflation - government kept printing more money.
- The extremist political parties were gaining more support and revolting (e.g. Spartacist League & Kapp Putsch).
Gustav Stresemann was appointed as chancellor and foreign secretary of Germany in August 1923.
He resigned as chancellor in November but remained foreign secretary until 1929. He introduced many new policies to help the recovery of Germany.
To stop hyperinflation he introduced the rentenmark in 1923.
This was a temporary currency to stop inflation.
People were confident in it because if the currency failed they were promised shares in land or industry.
It was replaced again in August 1924 by a permanent currency, the reichmark. This had its own independent national bank, the reichsbank.
This resulted in people being confident in German currency and deposits in the banks rose from 900mill marks in 1924 to 4,900mill marks by 1927.
Dawes Plan, 1924
To reduce reparations.
Germany were unable to pay reparations as the yearly payments were too high and Germany was bankrupt.
Stresemann agreed with the Allies:
- Reduce annual payments to an affordable level.
- American banks invest 800,000,000 marks in German industry.
This meant that:
- Germany could resume paying reparations.
- The French left the Ruhr.
- German economy recovered.
- Coal output and manufactured goods sales increased and unemployment fell.
Locarno Pact, 1925
Signed with: Britain, France, Itay and Belgium.
- Germany agreed to keep its new border with France and Belgium.
- The Allies agreed to remove their troops from the Rhineland.
- They agreed to discuss Germany entry to the League of Nations.
This meant Germany was treated more equally and not dictated to.
League of Nations, 1926
In 1919 the Allies founded the League to work for world peace. Germany was excluded.
Stresemann convinced them to let Germany join in 1926. They got a place on the League's council.
This again meant Germany was trusted and treated more equally.
Kellogg-Briand Pact, 1928
One of 65 countries to sign the pact.
International agreement promising not to use war for achieving foreign policy aims.
This showed Germany as a respectable member of the international community.
Young Plan, 1929
Cut reparation payments.
59 years, £2 billion.
Strengthened Weimar Republic and showed it was trusted.
Many criticisms still - Hitler said it was "passing on the penalty to the unborn".
3 October Stresemann died. Late october Wall Street Crash - back into turmoil.