Treaty of Versailles

The peace that ended one war engineered another. Keynes walked out of the negotiations in disgust — "a Carthaginian peace" — and published a bestseller predicting exactly the collapse that followed.

The Treaty of Versailles was signed on 28 June 1919 in the Hall of Mirrors, five years to the day after Franz Ferdinand's assassination in Sarajevo. Its 440 articles formally ended the First World War, redrew the map of Europe, created the League of Nations, and assigned to Germany sole responsibility for the war and every mark of reparation the Allies could extract.

Article 231

Article 231 — the "war guilt clause" — became the treaty's most politically radioactive line. It was drafted as a legal basis for reparations, not as a moral verdict, but it read like one. The German delegation, handed the finished treaty and given a deadline of days to accept, signed under protest. The clause was used by every German political faction of the next two decades as evidence that the country had been unjustly humiliated.

Keynes's Carthaginian peace

John Maynard Keynes attended as an economic adviser to the British delegation, grew increasingly alarmed by the reparations demanded, and resigned before the treaty was signed. His book The Economic Consequences of the Peace, published later that year, was read on both sides of the Atlantic. He argued that the reparations were economically impossible, that insisting on them would impoverish Germany and destabilise Europe, and that a vindictive peace would plant the next war inside the one just concluded.

He was broadly correct. Germany's attempts to pay triggered hyperinflation in 1923. The reparations were renegotiated twice — the Dawes Plan in 1924, the Young Plan in 1929 — suspended in the Great Depression, and repudiated by the Nazi government in 1933. Six years later Europe was at war again.

Legacy

Historians argue both ways: that Versailles was too harsh (Keynes's view), or that it was not harsh enough to deter a rearmed Germany (the revisionist case). What is not contested is that every subsequent attempt at a peace settlement — Potsdam in 1945, Maastricht in 1992, even the eastward enlargement of the EU — was designed consciously against the mistakes of 1919.