The biggest negative effect of the Treaty of Versailles was on Germany. The treaty helped lead to German problems in at least two ways. Economically, it saddled Germany with a huge debt in the form of war reparations. This forced Germany to borrow money from the United States in order to pay. The debt was to cripple the German economy when the Great Depression hit.
The treaty also hurt Germany psychologically. Its terms, such as the war guilt clause and the terms that robbed Germany of territory and the right to have a true military, angered Germans. Their anger, when combined with the economic impact of the reparations, was to help allow Hitler to come to power in 1933.
The treaty of Versailles had negative effects not only to Germany, but the entire world as well. To begin with, the treaty significantly deviated from the “Fourteen Points” proposed by President Woodrow Wilson causing Germany to develop a negative attitude towards it from the very onset. The terms of the treaty were very punitive and adversely impacted Germany socially, economically and politically.
The “war-guilt” clause and reparation measures of the treaty elicited such resentment on the Germans towards the other nations and in particular France and Britain. Even though the Germans were affected by a deep-seated resentment, their nationalism bond grew stronger. Economically, Germany was crippled and social-politically, the Hitler led Nazi party caused epic distraction as exemplified by the Holocaust. The treaty also had a weakness in its disarmament policy and this ambiguity left room for Germany to maneuver and strengthen itself. In addition to the above, the Allies disagreed in almost all matters with regard to the treaty and so its full implementation was a flop. As a result, Germany had the opportunity to recoup economically and politically, contrary to what the treaty hoped for in its quest for everlasting peace and stability. Eventually, Germany, fueled by resentment of the Versailles treaty impacts, sought vengeance by attacking Poland paving way for the Second World War whose effects were more profound compared to the First World War.