The Treaty of Versailles was signed in 1919 and had serious effects on the economy in Europe after World War I. One of the biggest problems was the heavy payments that Germany was forced to pay as reparations. These payments were about $132 billion in gold marks, which wrecked the German economy. This led to extreme inflation, meaning prices went up a lot, and Germany ended up with huge debts. By 1923, the value of the German mark dropped sharply, making everyday items incredibly expensive and wiping out people’s savings.

Economic Problems Across Europe:

1. Hyperinflation in Germany:

   • To pay the reparations, the German government started printing more money.
   • As a result, $1 could be worth trillions of marks.
   • Workers had to be paid several times a day because the value of their wages dropped so quickly.

2. Trade Issues:

   • When Germany’s economy fell apart, it couldn’t trade as much, hurting other countries that depended on German products.
   • Nearby countries saw fewer customers for their goods and faced rising unemployment.

3. Political Unrest:

   • The tough economic times led to radical politics and helped groups like Adolf Hitler and the Nazi party gain power.
   • Countries like Italy and Hungary also faced similar problems, leading to strict governments.

4. High Unemployment:

   • With many industries failing, unemployment rates skyrocketed.
   • In Germany, nearly 30% of people were unemployed in the early 1930s.
   • Many struggled just to meet their basic needs, which caused more social unrest.

Possible Solutions:

To tackle the economic struggles from the Treaty of Versailles, reasonable solutions were needed:

• Debt Relief: A better way to manage reparation payments could have eased Germany’s economic struggles, helping bring stability to Europe.
• Economic Cooperation: Working together in trade could have helped rebuild economies and benefited everyone, instead of isolating countries from one another.
• Investment in Recovery: Financial aid from other countries and investment programs could have provided a way for recovery and growth, similar to the later Marshall Plan.

In summary, even though the Treaty of Versailles was supposed to bring peace, its harsh economic rules ended up creating more problems later on and caused economic hardship across Europe. Better solutions could have eased these struggles and helped create a more stable and cooperative Europe.