Hundred years ago : when Belgium invaded Germany.
On January 11th 1923, today 100 years ago, French and Belgian troops occupied the industrial Ruhr area in Germany. The motive was the cessation of the payment of war repairs by the German government, which had been imposed by the Versailles Treaty (1919).
The problem for Germany was, that it had financed its war efforts with loans, which had to be paid back. In case of a victory, these loans could have been recuperated by war repairs to be paid to Germany. But now, on top of the loans, Germany had to pay itself repairs. Despite the fact that the German industry had come out of the war undamaged, all these debts were too heavy for the German economy, and they created inflation, because money was printed to purchase the foreign currency in which the war repairs had to be paid.
France, under the radical anti-German policy of the Poincaré government, and Belgium, hoped to recover repairs in raw materials (coal and steel), and therefore sent troops into the Ruhr area (starting from the post-war Belgian occupation zone on the left bank of the river Rhine). But the German workers in the occupied Ruhr area went on strike, supported by their government, that kept paying them. This plunged the already fragile German state finances into a disastrous hyperinflation.
Internationally, the occupation was met with lots of critics, as an act of French aggression. It also caused outrage in Belgium, because the government had submitted to French interests.
The crisis was solved by the Dawes plan in 1924 (Charles Dawes, who became vice-president of US president Calvin Coolidge in his 1925-1929 term, and received the 1925 Nobel Prize for Peace for his plan). The Dawes Plan foresaw a reorganization of the German state finances (among which : financing the war repairs with American loans), of the war repair schedule, and on the retreat from the occupation on the Ruhr. With a less radical government in France, the way was also paved for the Locarno Treaty in 1925, which restored much of Germany’s diplomatic status. The dark side of the hyperinflation was the rise of right wing nationalist groups in Germany. The occupation of the Ruhr is sometimes called ‘the act of birth of Nazism’. Later in 1923, Hitler would carry out his failed Bierkellerputsch in Munich. The real opportunity for Nazism would come when, in the Great Depression, the US stopped providing loans, plunging German economy once more into crisis.
