The Great Depression had an absolutely catastrophic effect upon Germany. The German economy was particularly vulnerable, as it was built largely on foreign capital, mainly American. So when the Wall Street Crash of 1929 hit, the impact upon the German economy was immediate and deeply damaging. American banks and other financial institutions began calling in their debts, but Germany couldn't afford to pay them back, nor could German industry find any ready markets for its exported goods. The results were disastrous: industrial output ground to a halt, causing mass unemployment; banks failed, wiping out the savings of millions.

As well as increased poverty and unemployment, the Great Depression undermined the confidence of large numbers of Germans in the Weimar Republic. Though it had never enjoyed much in the way of enthusiastic support, the Weimar Republic had, with the assistance of American loans, been getting back on its feet economically after the disasters of hyperinflation in the early 1920s. But once the Great Depression hit, many began to question the whole basis of the Weimar Republic, especially after the government implemented a brutal program of austerity that made matters worse.

People started to look for a political alternative, any alternative to a system that appeared to be failing miserably. Political life in Germany became increasingly polarized, with growing numbers flocking to the extremes of Left and Right. Violent confrontations between Nazis and Communists became an all-too-common sight on the streets of the big cities. In electoral terms, both Nazis and Communists greatly increased their support among a population tired of the political gridlock and economic chaos with which the Weimar Republic was now synonymous. The Great Depression, and the cumbersome way in which it was handled by the German government, had now put violence and extremism at the heart of German public life. Ominously, this development created the ideal conditions for the Nazis' eventual seizure of power in 1933.

There were two main impacts of the Great Depression in Germany.  There was a huge increase in unemployment and, partly because of that, there was a turn to extremism in politics and society.

The Great Depression hit Germany very hard because it exported a lot of its goods and because it relied on loans from the United States.  Both the export markets and the loans dried up during the Depression and the unemployment rate in Germany went as high as 33%.

This economic impact turned into a political and social impact.  People were upset about the economy and turned to extremist groups like the Nazis.  They hoped the outsiders would have some sort of answer to the country's problems since the insiders clearly did not.