WI: Modern Germany refuses to pay Versailles reparations?

Germany paid off the last reparations imposed by the Treaty of Versailles in 2010.

From hearsay, I heard that Germans to this day are still pretty pissed by the treaty's blatant unfairness. Suppose that in the late 20th or 21st century, Germany, for whatever reason said "screw it, we're not abiding by that ridiculous, one-sided treaty" and simply refuses to pay any more reparations money. What would be the reaction?
 
Between 1919-1936, Germany gets stomped by England and France.
Between 1936-1939, More limited WW2, probably ending in the USSR invading Germany for easy pickings.
Between 1945-1990, Germany doesn't much exist as a country, certainly it doesn't have any freedom to object (US forces could just leave and Germany would immediately get back to paying or risk Russian invasion). Though I'm not sure if Germany was paying in this time.

After 1990, it might hurt their relationship with France a little, but no war will come out of it. The EU has basically joined the two countries together. WWI was so long ago that everyone who remembers it is dead. France's economy wasn't 90% dependant on reparations any more. Germany is strong enough to defend itself. Modern Germany has a similar government to the French (its democratic, relatively pacifistic). Too many issues have clouded people's minds since WWI, such as WWII. So many reasons.

In essence, not much.

- BNC
 
I believe, nothing.

Nationhood and by corollary, corporations in law last forever, unlike human personhood. So if the Germans decided to suspend payment (which was token, ceremonial and NOT resumed until AFTER reunification) the contract is still valid. Just like when Hitler suspended payments in 1933, which also did not start a war. The real problem was that the UK and France borrowed to fund WW1, and had to make payments to the Americans. No reparations, no money to the Americans, unless the Americans were generous and allowed default.

Within any industrialised nation there is a vast bureaucracy and civil service which outlasts governments to prevent leaders from doing stupid things. Barring any sort of purges or true revolution (even then some), treaty is law and nations respect law. There may be blips in history where law is suspended, but unless the country is completely cut off from the world and the entire educated class liquidated, lawyers and civil servants will recommend what is sensible and nudge leaders to respect treaties. If a nation wants any connection to its past, it will respect treaties and laws if only in token. The most likely excuse is reunification is too costly so we will "pay later"... maybe in the 21st or 22nd or 23rd Centuries. After all, you can always inflate the currency, make up excuses, etc., because you aren't limited by a human lifespan. And you can always issue more bonds, a reverse bond ladder. Of course a demagogue can be elected or become Prime Minister or Supreme Leader or whatever the title... but government lives on, far beyond any hot heads or issues of the moment.

http://www.nytimes.com/2014/12/28/world/that-debt-from-1720-britains-payment-is-coming.html?_r=0

Long answer short, it wouldn't happen... once everyone who cared was dead and in the grave, no more emotions or politics, and the bureaucratic machine of government takes over and will pay just to maintain goodwill... when 10 million is worth 1 million... but it will be paid.
 
Unfair? To borrow a recent meme: #dryyoureyes Germany.

If it is in the late 20th, or early 21st Centuries then bye, bye credit rating.
 
If we are talking about 1990-2010: negative impacts on credit rating, higher level of guarantees required in newer treaties, probably a bunch of lawsuits. No war, no dissolution of EU, but lots of mudslinging by tabloids on all sides.
 
If it is in the late 20th, or early 21st Centuries then bye, bye credit rating.

why? Ignoring an century old treaty forced on you isn't exactly the same as refusing to pay back your debts. Germany would still be an extremly safe debtor.
 
why? Ignoring an century old treaty forced on you isn't exactly the same as refusing to pay back your debts. Germany would still be an extremly safe debtor.

Germany signed the treaty and IIRC the BRD agreed that they had responsibility for the debt when the country was formed. From the perspective of Germany's creditors this could be the thin end of the wedge. What if she decides she also doesn't feel her other debts are fair and defaults?
 
Between 1945-1990, Germany doesn't much exist as a country, certainly it doesn't have any freedom to object (US forces could just leave and Germany would immediately get back to paying or risk Russian invasion). Though I'm not sure if Germany was paying in this time.

I don't see Americans being so stupid. They wouldn't abandon one of its most important ally. More plausible thing is that USA, UK and France try negotiate fairer reparations.
 
What if she decides she also doesn't feel her other debts are fair and defaults?

What if she decides to invade belgium suddenly? Abandoning such a treaty doesn't raise the chances its gonna default on other debts noticably.
 

oberdada

Gone Fishin'
Actually we payed money back to the US for credits we used to pay the reperations.
The real reperation payments ended in 1932.

It would have been a rea stupid thing to stop it.
The Federal Republic is identical acourding to international law with the German Empire and has taken over its debts and international treaties.
Stopping payment damges your credit rating, and we just need to keep that AAA rating.

I don't think tht it was ever up for debate, more an oddity.
 
Actually we payed money back to the US for credits we used to pay the reperations.
The real reperation payments ended in 1932.

It would have been a rea stupid thing to stop it.
The Federal Republic is identical acourding to international law with the German Empire and has taken over its debts and international treaties.
Stopping payment damges your credit rating, and we just need to keep that AAA rating.

I don't think tht it was ever up for debate, more an oddity.

The last payments were peanuts in the greater scheme of things. What was it? It turns out to be $94 million. https://en.wikipedia.org/wiki/World_War_I_reparations#End_of_German_reparationsNot nearly enough to get into a diplomatic spat and jeopardize Germany's credit rating. The cost would far, far exceed the benefit.
 
Last edited:
I don't see Americans being so stupid. They wouldn't abandon one of its most important ally. More plausible thing is that USA, UK and France try negotiate fairer reparations.
The US abandoning one of its most important allies in Europe because it doesn't pay WWI stuff is a extremly remote possibility...

The US may threaten to unless Germany resumes payments. Whether they would follow through on their threat is another discussion altogether. I think the threat would be enough though.

- BNC
 
People in this thread need to read up on the Versailles debt more.

IOTL it was basically written off after World War II. It was agreed that Germany wouldn't pay off its World War I reparations until it was reunified - at the time, this was considered extremely unlikely, and so was considered tantamount to forgiving the debt. When the unthinkable happened and Germany reunified, loan papers were mostly historical artifacts.

If Germany refuses to pay off its Versailles debt after 1990, it might cause a little bit of tension, but nothing seriously damaging. By then, most people agreed that the amount of reparations imposed on Germany was unjust anyways.
 

CalBear

Moderator
Donor
Monthly Donor
As noted, what happens is Moody's, S&P and Fitches drop Germany credit rating from AAA to AA+, maybe to AA-, which makes the cost of money greater to the German government (keep in mind that these ratings firms dropped the U.S. to AA+ because the House discussed refusing to raise the debt ceiling).

With a current Sovereign Debt of $2.3T the hit to the Germany's credit rating would cost more than the defaulted amount (~$190M) in about two months.
 
As noted, what happens is Moody's, S&P and Fitches drop Germany credit rating from AAA to AA+, maybe to AA-, which makes the cost of money greater to the German government (keep in mind that these ratings firms dropped the U.S. to AA+ because the House discussed refusing to raise the debt ceiling).

With a current Sovereign Debt of $2.3T the hit to the Germany's credit rating would cost more than the defaulted amount (~$190M) in about two months.

Assuming it doesn't drop it even more. After all Germany refusing to pay such a small debt would raise questions about the German government. It would be the equivalent of you not paying a friend of yours the $5 you owe him. That raises questions why you are not doing so. On top of that the German stock market would crash and the Euro would plunge. The German government would wind up a laughingstock for doing something this stupid. This is very, very close to ASB scenario if not out and out ASB.
 
Top