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Keynes believed the economic consequences of the Treaty for Europe would be disastrous, and create conditions leading to a general collapse of European economies and, eventually, another general war. He turned out to be completely correct.
He pointed out in his book, The Economic Consequences of the Peace, that the European powers had ignored the letter and spirit of Wilson's Fourteen Points, and were asking reparations from Germany that were impossible. Reparations demanded included damages of war per se, as well as damages to the national economies; the costs of feeding the populations after the war; the cost of looted materials including timber and iron ore, livestock, household items, etc.; damages to civilians who lost property or were deported; essentially anything the Allies chose, whether directly war related (bombing damages, etc.) or not. No attention was paid to the fact that damage was caused by the other powers allied with Germany- Germany was forced to accept total responsibility for the war and total economic responsibility as well. There was no acknowledgement that other countries' plans and political issues also brought on the war, such as France, Russia, Montenegro or Bulgaria.
The worst of this, according to Keynes was that
"The treaty includes no provisions for the economic rehabilitation of Europe- nothing to make the defeated Central empires into good neighbors, nothing to stabilise the new states of Europe, nothing to reclaim Russia..."
He pointed out nothing was decided at Versailles to help rebuild the economy of France or Italy or to set up economic cooperation among the nations. He added that "the fundamental problem of a Europe starving and disintergrating before their eyes" was the one thing the Council of Four (UK, France, US and Belgium) completely neglected. The crushing conditions of the Treaty assured an economic disaster on the mainland of Europe, and the rise of a backlash in Germany leading to another general European war.
The first link below leads to the complete text of Economic Consequences.
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