After World War II, according to the Potsdam conference held between July 17 and August 2, 1945, Germany was to pay the Allies US$23 billion mainly in machinery and manufacturing plants. Dismantling in the West stopped in 1950. Reparations to the Soviet Union stopped in 1953.
Germany was also responsible for paying reparations after World War II. Although the total debt was estimated at over $300 billion, Germany was responsible for paying about $3 billion, according to the London Agreement on German External Debts in 1952.
The Treaty of Versailles didn't just blame Germany for the war—it demanded financial restitution for the whole thing, to the tune of 132 billion gold marks, or more than $500 billion today. How—and when—could Germany possibly pay its debt? Nobody could have dreamed that it would take 92 years.
Loan payments
Germany agreed to repay 50 per cent of the loan amounts that had been defaulted on in the 1920s, but deferred some of the debt until West and East Germany were unified. In 1995, following reunification, Germany began making the final payments towards the loans.
The case of debts arising from World War II is somewhat less complicated. At this time only four countries, discussed below, owe the U.S. government debts of any size arising from World War II programs to aid our allies. Other countries have paid their debts in full.
Within part of its wartime financial aid, the American government gave China a $500 million credit in 1942 and shipped these funds in the form of gold bullion. This was done to stabilize their currency. Our own State Department records show that China never paid back this debt to the American government either.
The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
Some of these loans were only paid off in the early 21st century. On 31 December 2006, Britain made a final payments of about $83m (£45.5m) to the US and about $23.6m to Canada. By the end of World War II Britain had amassed an immense debt of £21 billion.
Reparations amounting to US$550 million (198 billion yen) were made to the Philippines, and US$39 million (14.04 billion yen) to Viet Nam. Payment to the International Committee of the Red Cross to compensate prisoners of war (POW) of 4.5 million pounds sterling (approximately 4.54109 billion yen) was made.
The U.K. only paid off the last of its World War II debts to the U.S. at the end of 2006.
From 1946 to early 1948, the United States provided large loans and aid to a number of European countries. In addition to funds from international organizations, these funds enabled Germany and the rest of Europe to pay for the large inflows of imports that were crucial for postwar recovery.
After World War II both West Germany and East Germany were obliged to pay war reparations to the Allied governments, according to the Potsdam Conference. Other Axis nations were obliged to pay war reparations according to the Paris Peace Treaties, 1947.
Over the next four years, U.S. banks continued to lend Germany enough money to enable it to meet its reparation payments to countries such as France and the United Kingdom. These countries, in turn, used their reparation payments from Germany to service their war debts to the United States.
World War II Debt
During World War II (1939 to 1945), the U.S. lent Britain and other countries money to help pay for military costs, and spent a great deal for their own military. By the end of that war, U.S. debt reached $285 billion.
A liberal business-friendly market economy made industry prosper, and a liberal tax-financed social security prevented the worst forms of poverty. Since the German economy had collapsed, the Dawes Plan was put into place to save Germany and lessen the impact of the war reparations.
Germany National Government Debt reached 2,814.8 USD bn in Mar 2023, compared with 2,742.0 USD bn in the previous quarter. Germany National Government Debt data is updated quarterly, available from Mar 2000 to Mar 2023.
After the war ended in 1945, China demanded that Japan pay reparations as a way to compensate for these atrocities. However, due to the Cold War context at the time, Japan refused to provide any form of reparations to China as it was seen as an attempt by the United States and its allies to contain communism in Asia.
Japan's economic growth after the 1940s was based on unprecedented expansion of industrial production and the development of an enormous domestic market, as well as on an aggressive export trade policy.
After the defeat of Japan in World War II, the United States led the Allies in the occupation and rehabilitation of the Japanese state.
Second World War: fatalities per country 1939-1945. Estimates for the total death count of the Second World War generally range somewhere between 70 and 85 million people. The Soviet Union suffered the highest number of fatalities of any single nation, with estimates mostly falling between 22 and 27 million deaths.
A total of $50.1 billion (equivalent to $606 billion in 2021) was involved, or 17% of the total war expenditures of the U.S. Most, $31.4 billion ($380 billion) went to Britain and its empire.
The costs of fighting a protracted war on several continents meant Britain's national debt almost doubled from 1756 to 1763, and this financial pressure which Britain tried to alleviate through new taxation in the Thirteen Colonies helped cause the American Revolution.
An Associated Press analysis of a dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel.
China and Japan are the largest foreign investors in American government debt. Together they own $2 trillion — more than a quarter — of the $7.6 trillion in US Treasury securities held by foreign countries.
As recently as 2020, total debt in the United States relative to GDP exceeded China's. But as of mid-2022, China's relative debt burden stood 40 percent higher than America's.