Question

What do you mean by Great Depression. How they impact the stability of Europe?

Answer 1

At the end of the First World War, Germany became a democratic republic known as the Weimar Republic. The government was unable to deal with the economic crisis left by the war.

In 1923, France occupied the Ruhr Valley, the heartland of German industry, because Germany was unable to pay war reparations demanded by the Treaty of Versailles. The new Weimar Chancellor (like president) or Prime Minister succeeded in getting France to withdraw, and America loaned Germany money to stabilize the German economy.

The economic situation in Germany briefly improved between 1924-1929. However, Germany in the 1920s remained politically and economically unstable. The Weimar democracy could not withstand the disastrous Great Depression of 1929.

The disaster began in the United States of America, the leading economy in the world. The American stock exchange is in the city of New York in a building on Wall Street. The Wall Street stock exchange collapsed in 1929 and the American economy collapsed with it. This event was known as the Wall Street Crash, and was the start of the Great Depression.

The Great Depression affected all capitalist economies in the world. American banks immediately withdrew the loans they had made to Germany. Businesses closed, unemployment rose and inflation was rampant. German money had so little value, that it might take a wheelbarrow full of notes to buy a few groceries!