War reparations

A postwar payment extracted from a losing nation by a victorious one. Although reparations—often in the form of plunder or tribute—date to antiquity, they were first widely viewed as a legal compensation for damages in the late nineteenth century. The true motives behind reparation, however, have remained the same: national aggrandizement, the reconstruction of wrecked economies at the cost of the defeated, punishment of the losing nation, and a hindrance to any economic reclamation that nation might undertake.

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In the aftermath of World War I (1914–1918), the Allies exacted large reparations from the Germans, who were perceived as the “aggressors.” The resulting aggravation of Germany’s economic crisis contributed to the rise of the Nazis in the 1930’s. Except for the Soviet Union (which exacted massive reparations from its occupation zone in Germany), the Allies, recalling the instability that followed World War I, decided not to demand monetary compensation from the defeated Axis Powers after World War II (1939–1945).