John Maynard Keynes

Keynes measured Germany's capacity to pay reparations by:

"Her only means of paying was through an export surplus. Pre-War her deficit had been £74 million. By reducing imports and increasing exports, she might turn this into a £50 million surplus. Spread over 30 years this would come to a capital sum of £1700 million invested at 6%. Add £100 - 200 million for transfers of gold, property etc. and £2 billion is a safe maximum figure of Germany's capacity to pay." p.38

Keynes resigned his position at the Treasury as the reparations were set up to  22 billion pounds by the Allied victors - mostly Britain, France and America.

In Keynes' view, price stability was more important than exchange rate stability. So he argued against Britain's return to the Gold Standard. p.50-51

Germany achieved dramatic economic growth from its low point of 1932. In that year, industrial production was more than 40% below its 1929 level and there were 6 million people unemployed. By 1938, industrial production was 25% above the 1929 level and unemployment had been virtually eliminated. P. 100 How could Germany make it?

Pugh, P. & Garratt, C. (2012). Introduction to Keynes: a graphic guide. London: Icon Books.