The Young Plan (1929)
The Young Plan was intended to advance the Dawes Plan of 1924 and create a more permanent solution to the issue of Germany's reparations payments. The committee of representatives from the U.S, Britain, France, Italy, and Belgium was led by Owen Young.
What were the key terms of the Young Plan?
The Young Plan reduced the total amount of reparations that Germany was required to pay from the original 132 billion gold marks to 112 billion gold marks, to be paid at approximately 2 billion marks each year, until 1988.
The Bank for International Settlements was established in 1930 as a result of the Young Plan. It aimed to manage Germany's reparation payments, make the transfer of payments smoother and improve international financial cooperation.
The agreement also increased Germany's control over their economic policies.
What was the impact of the Young Plan?
On the one hand, the Young Plan was a success.
The Young Plan reduced the weight of the reparations, and make it easier for Germany to meet the requirements for repayments.
The Bank for International Settlements was key in managing international payments and building economic ties internationally.
On the other hand, the Young Plan had little positive effect.
Despite the increasingly lenient policies towards Germany, The Young Plan was intended to provide relief was rejected bynationalist and right-wing groups, such as the Nazi Party, who opposed reparations as a whole.
The onset of the Great Depression later that year slashed Germany's ability to make any sort of reparations payments, straining its diplomatic and economic relationships. In 1932, the Lausanne Conference recognised that Germany was unable to pay its reparations, and cancelled them.