I recently learned that Germany paid war reparations from the Versailles treaty up until 2010. How did that affect the relations between France and Germany, their rapproachement and the formation of the EU?

by anthroponaut

That war reparations from the first world war were still being paid into the early 21st century feels like a geopolitical dinossaur, especially after all the events that unfolded after the treaty, including WWII and the formation of the EU. Was this treated like "it is not worth it to get into this subject again, let's just pay and move on?"

davepx

The payments weren't actually WW1 reparations, which had been suspended and effectively stopped in 1932. Rather they were the last instalment of repayments under the 1953 London Debt Agreement which had roughly halved Germany's debt and deferred settlement of East German private borrowings and interest on the eastern component of interwar debt (the GDR not being a party to the deal) until after reunification, whenever that might be. This last element was accordingly triggered in 1990 (settlement of the rest having been completed in 1983), running for 20 years.

So what were the debts concerned? Some were indeed linked to reparations, but in the form of loans (largely from US lenders) to the pre-nazi Reich government to assist with payments under the Dawes and Young Plans. Other interwar amounts related to federal, state and municipal borrowing for social or infrastructure spending, or commercial business debt. the large postwar component represented mostly US reconstruction credits.

The pattern of settlement thus bore little relation to the interwar ranking of intended reparations beneficiaries: the bulk of the money this time went to the US, followed a long way behind by Britain and further behind still by Switzerland and the Netherlands: France ranked among these lesser recipients. So Franco-German relations and the EU project were affected little if at all as the final 2010 payment was very much about now old, greatly reduced and fairly uncontentious debt: reparations had died 78 years earlier.

Two recent treatments are Timothy Guinnane, Financial Vergangenheitsbewältigung: the 1953 London Debt Agreement, Bankhistorisches Archiv 4 (2014); and Gregori Galofré Vilà et al, Economic consequences of the 1953 London Debt Agreement, NBER working paper 22557 (2016).