THE AMERICAN-EUROPEAN DISPUTE ABOUT WAR DEBTS AND REPARATIONS (1921-1932)
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At the time of joining the first world war the United States pronounced slogans of salvaging the moribund European democracy and civilisation, threatened by German militarism and autocracy. The American ally granted considerable financial support to strengthening the Entente. Consequently, the US became the creditor of the majority of the Entente states, and due to the rendered financial aid - also of states established after the war (such as Poland and Czechoslovakia). After the war, the USA began treating European debts in purely economic categories, and awaited their payment. Meanwhile, the debtors initially protested against refunding, and when that option proved impossible - they created a mechanism of settling debts with money obtained from the reparations owed by Germany. It soon became obvious that the effectiveness of this mechanism depended on the USA, forced, already in its own interest, to correct the procedure and to ensure a satisfactory condition of the German economy, which generated funds for successive instalments of the debts owed by former Entente members. When the Great Depression undermined further US impact on both these questions, the debts became the reason for serious tension and, finally, forced the USA to turn towards isolationism. Questions related to debts and reparations proved to be too demanding both for America and Europe, and turned out to be irresolvable, in the manner of squaring a circle.
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