German Reparations after World War II: Political Decisions and Economic Evaluations

In this article, on the basis of declassified archival documents as well as the latest domestic and foreign studies, the authors examine the genesis, development and results of the Allies' reparation policy towards Germany. The history of the institution of reparations was examined from its very origin during the preparation of the Versailles Peace Treaty of 1919, through the development of expert proposals and political discussions within the "Big Three" period of the Second World War, to formalization in the final documents of the Yalta and Potsdam conferences of the 1945. The authors analyze the implementation of the reparation policy by the Soviet Union and the Western powers in the post-war period, identify the differences in practical approaches to the implementation of the Potsdam agreements among them. Economic estimates of the volume of Soviet reparations from East Germany range from 4.3 to 22.1 billion dollars, which can be explained by different calculation methods as well as arbitrary classifications of certain elements of expenditure as reparations. The amount of reparations from West Germany also varies from 4.8 to 16.8 billion dollars, to which Western economists tend to add subsequent compensation payments to Israel and other countries under international treaties as well as individual compensations of the total amount of 17 billion dollars. The authors conclude that while in the Federal Republic of Germany the reparations did not affect the systemically important sectors of the economy and almost did not affect the capital ratio of the industry, in the GDR they struck the basic branches of production.