Weimar: Years of Stability 1924-9. ECONOMIC RECOVERY (7)

Strengths of G. economy

• Heavy industry recovered quickly - more efficient production methods and increased investment from foreign bankers
• Growing number of cartels (business agreements) - so G. industry could lower costs
• 1925-1929 G. exports rose 40%
• 1924-1930 Wage rates rose every year

Benefits of Social Welfare

• Principles of welfare state written into Constitution
• Generous pensions + sickness benefits introduced
• 1927 - compulsory unemployment insurance covering 17 million workers introduced
• State subsidies provided for parks, schools, housing etc

Weaknesses in G. economy

• Economic growth = uneven. 1926 - production declined
• Value of imports exceed exports
• Unemplopyment never fell below 1.3 million
• Grain production - only 3/4s of its 1913 figure + farmers faced falling incomes

Fundamental economic problems

• World economic conditions didn't favour G.:
  • G. exports hindered by protective tariffs
  • T.O.V meant they lost resources in Alsace-Lorraine and Silesia
  • Fall in world prices from mid-1920s placed great strain on farmers who made up 1/3rd of G. population
  • This…