The Primacy of Economics: Reconstruction in Western Europe, 1919–1924

Abstract

Once the peace treaty was signed and the European leaders returned to their capitals, the most pressing problems they faced were financial and economic. The war had wrecked international finance and trade, it had distorted or destroyed productive enterprises, and non-European competitors had appeared in world markets who would be difficult to dislodge. The length and costs of the war meant that victors and vanquished alike were left with inflated money supplies, massive budgetary deficits, huge debts, and, in the case of most, collapsed or overstrained tax structures. The French, British, German, and, critically, the American positions were of central importance for the economic future of the continent as well as for the political balance of power. While the peace settlements cast a long shadow over Anglo-French relations, few anticipated that the long drawn-out struggle over German reparations would increasingly dominate European international relations during the early post-war years.