London Agreement on German External Debts

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The London Agreement on Foreign Debt , also known as the London Debt Agreement (Germany: Londoner Schuldenabkommen ), is a debt relief agreement between the Federal Republic of Germany and creditor countries. This agreement was signed in London on 27 February 1953, and entered into force on 16 September 1953.

Video London Agreement on German External Debts

Overview

The Conference on Foreign Debt of Germany (also known as the London Debt Conference) was held between 28 February 1952 and 28 August 1952. The agreement reached at the Conference was signed in London on 27 February 1953. This Treaty was ratified by the United States, France and England on the 16th September 1953, at which point the treaty came into force.

The London Debt Agreement includes a number of different types of German debt from before and after the Second World War. Some of them emerge directly from efforts to finance the reparations system, while others reflect extensive loans, mostly by US investors to German companies and governments. The parties involved besides West Germany include Australia, Belgium, Canada, Denmark, France, England, Greece, Iran, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Pakistan, Spain, Sweden, Switzerland, South Africa, USA. , Yugoslavia and others. The Eastern Bloc state is not involved.

The total that was being negotiated was the 16 billion debt signature resulting from the Treaty of Versailles after World War I that had not been paid in the 1930s, but the Germans decided to pay back to restore his reputation. This money is owned by the government and private banks in the US, France and the UK. Another 16 billion mark represents postwar loans by the US. Under the London Agreement, the amount to be refunded decreases by 50% to about 15 billion marks and spans more than 30 years, and compared to the fast-growing German economy has little impact. An important term of the agreement is that repayments are only made while West Germany has a trade surplus, and repayments are limited to 3% of export earnings. This gave German creditor strong incentives to import German goods, assisted in reconstruction.

Part of the related debt agreement must be paid after German reunification. For decades this seems unlikely, but in 1990 Deutsche Mark 239.4 million deferred interest became matured. This claim is repaid by way of "Fundingungsschuldverschreibungen" (Funding Debt Securities) with a maturity of 20 years. On October 3, 2010 the last payment, Euro 69.9 million, was made on this bond. This marks the last payment by Germany of the known debt resulting from both world wars.

Maps London Agreement on German External Debts

Impact

This agreement significantly contributes to Germany's postwar economic growth and the resurgence of Germany as a world economic power. A study in 2018 at the European Economic History Review shows that the London Agreement "spurs economic growth in three major ways: creating fiscal space for public investment, lowering borrowing costs, and stabilizing inflation." This allowed Germany to enter international economic institutions such as the World Bank, International Monetary Fund and World Trade Organization.

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See also

• German reparations for World War II
• Marshall Plan
• WWI Reparations
• Dawes' Plan, 1924-29
• Young Plan, 1930-32

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Note

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References

• Osma? czyk, Edmund Jan; Anthony Mango (2003). Encyclopedia of the United Nations and International Treaties: G to M (2003 ed.). Taylor & amp; Francis. ISBN: 978-0-415-93922-5.
• Guinnane, Timothy W. (July 2015). "Financial VergangenheitsbewÃÆ'¤ltigung: The 1953 London Debt Agreement". Yale University Economic Growth Discussion Paper No. 880 . SSRNÃ, 493802 .
• Rombeck-Jaschinski, Ursula (2005), Das Londoner Schuldenabkommen: die Regelung der deutschen Auslandsschulden nach dem Zweiten Weltkrieg German with abstract English), Oldenbourg: Deutsches Historisches Institut London, ISBNÃ, 9783486575804, Originally presented as a writer's habilitation (DÃÆ'¼sseldorf) under the title: Der Weg zum Londoner Schuldenabkommen. Die Regelung der deutschen Auslandsschulden nach dem Zweiten Weltkrieg. CS1 maint: Unknown language (link)

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External links

• The text of the agreement
• ÃÆ' â € ° ric Toussaint, The Marshall Plan and Debt Agreement on German debt
• Timothy W. Guinnane, Financial VergangenheitsbewÃÆ'¤ltigung: Debt Agreement 1953 London

Source of the article : Wikipedia