The First World War is finally over!

Now here’s a thing: the Germans have finally paid off the reparations bill from the First World War; the Versailles diktat is no more! The odd thing is that I was under the impression that this was over and done with years ago, that no further mention was made of it after Hitler repudiated the Young Plan, a repayment schedule devised by an American banker in 1929, when he became Chancellor in 1933. It wasn’t; it was merely placed on permanent hold, as I discovered on reading a report in The Times.

Victory in 1945 left the Allies with a huge dilemma. Germany, in a state of ruin, had debts amounting to 400 billion Reichmarks, and that’s before the outstanding bill from the First World War was added. Western politicians sensibly realised that a demand for fresh reparations would only create new forms of instability in a sensitive region, unlike Stalin, who continued to plunder his own zone of control.

At a London conference in 1953 creditors agreed to write off a great many of the more recent debts of the new Federal Republic, created out of the British, American and French zones of occupation. Principal on the First World War debt still had to be paid but it was agreed that no interest payments should be made until such time as the country was completely reunified. As the Soviet Zone had by now become the German Democratic Republic, and as communist control across the whole of Eastern Europe looked permanent, this was no more than a pious hope, an obligation quietly exported to Never Land.

When it comes to history one should never say never. Germany was reunified. While the nation was celebrating the fall of the Berlin Wall, civil servants realised that a forgotten obligation had come back home! In 1990 interest payments started anew after a gap of almost sixty years.

In case you’re wondering this went not to nations, not to the victors of the Great War, but to individual bondholders. Ironically before 1989 these bonds, like currency from the inflation of the 1920s, could be bought in flea markets for a few pennies, just an historical curio, because nobody believed that Germany would ever be reunited or further payments made. Practically worthless at one moment, the bonds suddenly acquired real value. I love Clio; I love her ironic sense of humour.

Anyway, if you are a bondholder look to a last windfall. On Sunday the final instalment, a cheque for almost sixty-one million euros, was handed over. For Germany the First World War is finally over.