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Explain how Germany suffered from social and economic problems up to 1923 and how it had begun to recover by the end of 1924.

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Introduction

Explain how Germany suffered from social and economic problems up to 1923 and how it had begun to recover by the end of 1924. After Germany lost the war it was announced in January 1921 they had to pay out large sums of money to the countries they had destroyed. These reparations totalled up to an amazing 6.6 billion marks. Most of this money was owed to Belgium and France and was to be paid in instalments. Germany just about managed to gather enough money to pay the first instalment but in December 1922 they announced they could not afford to meet the next payment. French (France being the country owed the most money) ...read more.

Middle

The government was running out of money but still need to pay the workers so they decided to print more money to give to the workers. As more money was being spent the prices in shops increased. To solve this, again, the government printed more money so as people could afford to buy food and other necessary supplies. The shops responded to this by raising their prices again. This cycle was repeated and soon what was a 0.29m loaf of bread now cost 32,428,000,000,000m! This was known as hyperinflation. The value of money started to decrease quickly and soon money was worthless. This affected a lot of people badly as they may have been on a fixed income, pension or maybe living off live savings. ...read more.

Conclusion

In August 1923 Ebert powered under Article 48 formed a new government, he made Gustav Stresemann chancellor. Stresemann was Germany?s saviour. He ended a stop to passive resistance and sharply ended government spending. He agreed Germany would keep paying reparations to their allies as it was the best way in his opinion to get the French and Belgian troops out of the Ruhr. Gradually the economy started working again and Stresemann created a new bank named the Reichbank and new currency named Rentenmark. The economy was working its way back up again and in 1924 Stresemann became Germany?s new Foreign Minister. He signed the Dawes plan that year agreeing that Germany would pay the exact amount of reparations owed but they now had a longer time to do it. ...read more.

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