WORLD HISTORY

Detailed explanation-1: -War reparations are compensation payments made after a war by one side to the other.

Detailed explanation-2: -What are war reparations? At the end of a war, countries are required to make payments as a way of making up for the damage inflicted. This was the case at the end of World Wars I and II. The debt can be paid back for many reasons, including machinery damage, and forced labor.

Detailed explanation-3: -The Treaty of Versailles (signed in 1919) and the 1921 London Schedule of Payments required Germany to pay 132 billion gold marks (US$33 billion [all values are contemporary, unless otherwise stated]) in reparations to cover civilian damage caused during the war.

Detailed explanation-4: -Over the next four years, U.S. banks continued to lend Germany enough money to enable it to meet its reparation payments to countries such as France and the United Kingdom. These countries, in turn, used their reparation payments from Germany to service their war debts to the United States.

Detailed explanation-5: -But most embarrassing of all was the punitive peace treaty Germany had been forced to sign. The Treaty of Versailles didn’t just blame Germany for the war-it demanded financial restitution for the whole thing, to the tune of 132 billion gold marks, or more than $500 billion today.

Detailed explanation-6: -After World War II both West Germany and East Germany were obliged to pay war reparations to the Allied governments, according to the Potsdam Conference. Other Axis nations were obliged to pay war reparations according to the Paris Peace Treaties, 1947.