The political instability was aggravated by the financial implications of the Treaty of Versailles. By 1921, the level of reparations had been fixed to 132,000,000 gold marks. It was clear that the weakened Germany would not be able to pay. By January 1923, the French invaded the Ruhr region as Germany could not afford more payments. The citizens of the Ruhr began to hate the French who were exploiting them, and so again needed someone to blame. They decided to blame the people who had agreed to pay reparations, the government. By November 1923, a situation of hyperinflation had developed. Money was becoming more and more worthless by the day. The middle classes had their savings go down considerably, and there was general unhappiness and discontent. A piece of bread would cost people billions of marks.
The Treaty of Versailles was signed by the new government, and this treaty was causing discontent. The people had no one to blame but the government, the majority of the country were angry, and it could be considered that with universal criticism, the new republic, the Weimar Republic, was doomed to fail from the start.
In 1923, Stresemann was appointed as Chancellor. Stresemann developed a policy he called 'Fulfilment'. This was an attempt to show good faith in attempting to carry out the terms of peace, it was to show how hard that task was, pretty much impossible and try to get the allies to become more lenient. In 1924 came the Dawes Plan. This reorganised the Reich bank, to prevent inflation. This would prove essential in Germany's improving economy. Stresemann was significantly involved in introducing the “Rentenmark.” This began to stabilise the currency and began to make inflation better.
In 1926, Germany joined The League of Nations, and Germany had a voice at the international level. Germany could now do more for her people abroad and at home, by 1929 even the withdrawal of the allies from the Rhineland was to be done. The German people were more uplifted during the late 1920's, and cultural improvements were occurring all around Germany. There was greater production and use of literature, music, and theatre. Germany was beginning to get back on its feet after a hard war, and relations with the allies and between the government and the people were improving. The extremist Nazi’s had only 12 seats in 1928, and had little or no voice in national government. The socialists were in control with 153 seats. The government it self had progressed form an imperial autocracy to a democratic republic.
There was optimism for the republic, the economy, and German culture. This optimism ended however, by the Wall Street crash of 1929. Investment was withdrawn from the economy, causing it to go into decline again. This caused unemployment to reach record levels of six million. Many people began to turn to Hitler, who preached employment and greatness.
From the very start, the Weimar republic faced opposition from both sides, the left and the right. There was also several attempted revolutions that occurred. The public blamed their problems on the Treaty of Versailles, and therefore they blamed the government for having accepted to sign it. The new government were in a difficult situation. It was impossible to say that the new government would have faced no difficulties from the start, but to say doomed would be unfair. They were in a bad situation as they had just lost the war and been blamed. Any other government in that situation would have been the same. The republic was beginning to get over it's difficulties during the mid 1920's as economic, political, and cultural improvements were occurring. It is normal that it took a lot of time to get over their problems. If there hadn't been the Wall Street Crash, the republic would have continued for many years. These circumstances gave the extremists, the Nazi's, an opportunity for advancement as the people searched for a better solution to the depression. It was not evident that the republic was doomed from the start, but it was later evident that it was doomed after 1929 when the country was splitting into two groups, left and right, who both wanted an end to the republic, and a change to another political system, communist or Nazi. The Republic was not doomed from the start but it is the combination of events that led to its collapse.