Germany still paying off £50million in reparations following World War One

Germany is still paying off £50million of the 'reparations' demanded from it after the end of First World War.

The German Finance Agency, its authority on debt management, said tens of millions of euros are still being transferred to private individuals holding debenture bonds as agreed under the Treaty of Versailles signed on June 28, 1919.

The bonds were issued at the time to investors.

Delegates gather in the hall in the Trianon during the signing of the Treaty of Versailles, a peace treaty that officially ended World War I in June 1919

'The still-open contract for interest and amortisation payments is around €56 million,' said spokesman Boris Knapp.

'That is the debt that is still outstanding from all those years ago but Germany will make good on it.'

The news that modern-day Germany is still in debt for one world war that laid the foundations for the next was revealed by the agency after a written request by a newspaper.

With the signing of the Versailles accord Germany accepted blame for the war which cost nine million men their lives.

Article 231 of the peace treaty the so-called 'war guilt' clause - declared Germany and Austria-Hungary responsible for all 'loss and damage' suffered by the Allies during the war and provided the basis for reparations.

The treaty was despised by Germans and seized upon by the Nazis to foster a feeling of victimhood among their followers.

Crowds outside the Palace of Versailles awaiting the signal that the peace treaty had been signed

The initial sum agreed upon for war damages in 1919 was 226 billion Reichsmarks, a sum later reduced to 132 billion. In sterling at the time this was the equivalent of some 24 billion pounds.

France, which had been ravaged by war – its farmlands devastated by battles, industries laid waste and some three million men dead – pushed hardest for the steepest possible fiscal punishment for Germany.

The principal representative of the British Treasury at the Paris Peace Conference, John Maynard Keynes, resigned in June 1919 in protest at the scale of the demands, warning correctly that it was stoking the fires for another war in the future.

'Germany will not be able to formulate correct policy if it cannot finance itself,' he warned.

When the Wall Street Crash came in 1929, the Weimar Republic – Germany’s first and only democracy until after the defeat of Nazism in 1945 – spiraled into debt.

German infantrymen dig trenches in norther France during World War One

What the Bank of England calls ‘quantitative easing’ now was started in Germany with the printing of money to pay off the war debt, triggering inflation to the point where ten billion marks would not even buy a loaf of bread.

Up until 1952 Germany had paid some 1.5 billion marks in war reparations to Allied countries.

But in 1953 the balance was suspended pending a reunification of East and West Germany.

On October 3, 1990, the old debts went into effect again with 20 years for payment. Germany plans to pay off its World War I debts by October 3, next year.