“Kriegsschulduge” or war-guilt lie which further spread negative discourse around the Treaty and the reparations payments it called for. Advocating the payment of reparations was very risky to the political future of politicians – the assassinations of Vice-Chancellor Matthias Erzberger and Foreign Minister Walther Rathenau make this evidently clear – and so Weimar ministers resorted to a policy of obstruction and inaction towards reparations. In this context, many German citizens started withholding their tax payments as they viewed the reparations as being too punitive. In addition, the French and Belgian occupation of the Ruhr in 1923 following the German default on its reparations only stunted Germany’s ability and willingness to pay down the debt, as German workers (supported by the government in Berlin) started a go-slow job action and passive resistance towards the occupying forces.
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Generally, countries are fearful of defaulting on international obligations as a default damage the creditworthiness of national bonds and make reentry into international borrowing markets more difficult, but the impact of punitive action towards Germany would ostensibly be lower because most German assets and patents overseas had already been seized after the war. Therefore, there was substantial incentive for Germany to default on its reparations payments. Furthermore, the government imprudently invested the capital that came under the Dawes Plan into unproductive public sector projects such as sport stadiums, not projects that would increase exports and aid in the payment of reparations. Thus, proving that the government was not resolutely focused on reparations payments.
Nevertheless, German politics was not solely to blame for the poisoned atmosphere in Germany towards reparations, as the allies’ political decisions also share considerable responsibility. The
Generally, countries are fearful of defaulting on international obligations as a default damage the creditworthiness of national bonds and make reentry into international borrowing markets more difficult, but the impact of punitive action towards Germany would ostensibly be lower because most German assets and patents overseas had already been seized after the war. Therefore, there was substantial incentive for Germany to default on its reparations payments. Furthermore, the government imprudently invested the capital that came under the Dawes Plan into unproductive public sector projects such as sport stadiums, not projects that would increase exports and aid in the payment of reparations. Thus, proving that the government was not resolutely focused on reparations payments.
Nevertheless, German politics was not solely to blame for the poisoned atmosphere in Germany towards reparations, as the allies’ political decisions also share considerable responsibility. The