The Treaty of Versailles contributed to the economic crisis in Germany during the 1920s primarily through its imposition of harsh reparations and territorial losses. The treaty demanded that Germany pay massive amounts of war reparations to the Allied powers, which put a significant strain on the German economy. This led to hyperinflation as the German government printed more money to meet its payment obligations, severely devaluing the currency and causing prices to skyrocket. Additionally, the loss of territories and resources due to the treaty further weakened the German economy and hindered its ability to recover from the war. The economic crisis sparked social unrest and political instability, paving the way for the rise of extremist ideologies and ultimately contributing to the outbreak of World War II.
