Which Agreement Reduced Reparation Payments to $2 Billion?

The agreement that reduced reparation payments to a figure of 2 billion Marks per year was the Young Plan.

Understanding the Young Plan and German Reparations

Following World War I, Germany was obligated to pay substantial reparations to the Allied powers. Several plans were put in place to manage these payments, with the Young Plan being a pivotal one in revising the financial burden.

Introduced in 1929, the Young Plan was a program for settling Germany's World War I reparations. It was chaired by American industrialist Owen D. Young and aimed to replace the Dawes Plan of 1924, which had proven unsustainable in the long run.

The primary objective of the Young Plan was to reduce the overall amount of reparations owed by Germany and to create a more manageable payment schedule.

Key Provisions of the Young Plan:

• Significant Reduction: The Young Plan reduced the total amount of Germany's reparation payments by approximately 20 per cent.
• Annual Payments: It stipulated that Germany was to pay 2 billion Marks per year. It is important to note the currency specified in historical records and by the referenced information is "Marks," not U.S. dollars.
• Flexible Payment Terms: A key feature designed to ease Germany's financial strain was the provision that two-thirds of the annual payment could be postponed each year if necessary, offering a degree of flexibility in times of economic hardship.
• Longer Payment Period: The plan also extended the payment period for reparations over 59 years, pushing the final payment date to 1988.

This agreement was intended to stabilize the German economy and integrate it back into the international financial system, though its full implementation was curtailed by the onset of the Great Depression.

For more details on the Young Plan and its impact on German reparations, further information can be found in resources covering the recovery of the Republic in the post-World War I era.