Great Depression in Central Europe
Encyclopedia
The Great Depression
severely affected central Europe. The unemployment rate in Germany
, Austria
and Poland
rose to 20% while output fell by 40%. By November 1932 every European country had increased tariff
s or introduced import quota
s.
Under the Dawes Plan
the German economy boomed in the 1920s, paying reparations and increasing domestic production. Germany's economy retracted in 1929 when Congress discontinued the Dawes Plan loans. This was not just a problem for Germany. Europe received almost $8 billion USD in American credit between 1924 and 1930 in addition to other war time loans.
Germany's Weimar Republic
was hit hard by the depression as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities. Repayment of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932
. By that time Germany had repaid 1/8 of the reparations.
Falling prices and demand induced by the crisis created an additional problem in the central European banking system, where the financial system had particularly close relationships with business. In 1931 the Creditanstalt
bank in Vienna
collapsed, causing a financial panic across Europe.
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
severely affected central Europe. The unemployment rate in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
and Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
rose to 20% while output fell by 40%. By November 1932 every European country had increased tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s or introduced import quota
Import quota
An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time....
s.
Under the Dawes Plan
Dawes Plan
The Dawes Plan was an attempt in 1924, following World War I for the Triple Entente to collect war reparations debt from Germany...
the German economy boomed in the 1920s, paying reparations and increasing domestic production. Germany's economy retracted in 1929 when Congress discontinued the Dawes Plan loans. This was not just a problem for Germany. Europe received almost $8 billion USD in American credit between 1924 and 1930 in addition to other war time loans.
Germany's Weimar Republic
Weimar Republic
The Weimar Republic is the name given by historians to the parliamentary republic established in 1919 in Germany to replace the imperial form of government...
was hit hard by the depression as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities. Repayment of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932
Lausanne Conference of 1932
The Lausanne Conference was a 1932 meeting of representatives from Great Britain, Germany, and France that resulted in an agreement to suspend World War I reparations payments imposed on the defeated countries by the Treaty of Versailles...
. By that time Germany had repaid 1/8 of the reparations.
Falling prices and demand induced by the crisis created an additional problem in the central European banking system, where the financial system had particularly close relationships with business. In 1931 the Creditanstalt
Creditanstalt
The Creditanstalt was an Austrian bank. The Creditanstalt was based in Vienna, founded in 1855 as K. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe by the Rothschild family...
bank in Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
collapsed, causing a financial panic across Europe.