The large amount of foreign capital that flowed into the country from 1924 improved the standard of living, as funds were directed towards public works, housing, transport and social welfare. Germany industry was restructured and coal, iron and steel production surpassed pre-war figures. This economic prosperity was not completely legitimate as Germany was largely functioning off borrowed money and was over-dependent on foreign loans and investments. Stresemann realised that if the money supply ceased Germany would be in strife writing in November 1928, "we are not only military disarmed, we are also financially disarmed". This issue was largely overlooked throughout the "Years of Stability", Germany instead embracing the economic prosperity that had been absent for a prolonged period of time. The strength of the economy would in turn lead to Germany possessing an efficient foreign policy that allowed the nation to eradicate its diplomatic isolation following World War I. .
As foreign minister, Gustav Stresemann was the driving force behind Germany foreign policy from 1924-1927. He believed that Germany could restore itself to a position of European power, through careful and patient diplomacy. His immediate aim was to improve relations with France, the 'old enemy'. The result was the treaty of Loranco, signed between France, Germany, Belgium, Britain and Italy in October 1925. The treaty guaranteed the French-German and the German-Belgium borders and France, Germany and Belgium renounced the use of war in the future. Stresemann's signing of the Loranco treaty marked a new beginning in European relations, with Wright (2002) stating, "he earned the respect of his French and British counterparts" (pg. 54). Both Germany and France were given a sense of security and amid this new spirit of friendship and reconciliation and subsequently Germany was admitted to the League of Nations.
