Agreement on German External Debts

The London Agreement on German External Debts, also known as the London Debt Agreement, was a debt relief treaty between the Federal Republic of Germany on one part and on Belgium, Canada, Ceylon, Denmark, the French Republic, Greece, Iran, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Pakistan, Spain, Sweden, Switzerland, the Union of South Africa, the United Kingdom of Great Britain and Northern Ireland, the United States of America, and Yugoslavia and others. The negotiations lasted from February 27 - August 8, 1953 The London Debt Agreement covers a number of different types of debt from before and after the second World War. Some of them arose directly out of the efforts to finance the reparations system, while others reflect extensive lending, mostly by U.S. investors, to German firms and governments.

In the London Agreement, the German government under Chancellor Konrad Adenauer undertook to repay the external debts incurred by German government between 1919-1945.

The total under negotiation was 16 billion marks of debts from the 1920s which had defaulted in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 billion marks represented postwar loans by the U.S. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.

The agreement significantly contributed to the growth of the post-war German economy and reemergence of Germany as a world economical power. It allowed Germany to enter international economic institutions such as the World Bank, International Monetary Fund and World Trade Organization.

See also

• Marshall Plan
• World War I reparations
• Dawes Plan, 1924–29
• Young Plan, 1930–32

Bibliography

References

• Osmańczyk, Edmund Jan; Anthony Mango (2003). Encyclopedia of the United Nations and International Agreements: G to M (2003 ed.). Taylor & Francis. ISBN 978-0-415-93922-5. 
• Timothy W. Guinnane, "Financial Vergangenheitsbewältigung: The 1953 London Debt Agreement" (Economic Growth Center, Yale University, 2004) online

Notes

External links

• Text of the treaty
• Éric Toussaint, The Marshall Plan and the Debt Agreement on German debt
• Timothy W. Guinnane, Financial Vergangenheitsbewältigung: The 1953 London Debt Agreement