In the following essay I will analyze the economic and political problems that affected Europe as a result of the Paris Peace Treaties. Examples of this were the size of the war debts and reparations, the problems of inflation, and the widespread political instability best seen in France´s search for security during the 1920s. The Paris Peace Treaties was responsible for many economic problems in Europe during the 1920s. For example the economic disintegration, the point of self-determination was welcomed by many countries but there was a down side. As more nations were created there were more tariffs, more borders and more limitations for each country. Before the First World War there were 20 economic units, that from many years had been trading and things were settled; but after the Paris peace Treaty 7 new economic units were created that weren't aware of previous settlements and wanted to impose their own. This was a bad news for the countries because after the war they needed money but this caused less trade, which lead to less production which lead to less money and more social and political problems. Therefore the Paris peace Treaties caused economic disintegration because of self-determination creating new countries and as a result of those new poor economies and less money to the existing ones.
A further difficulty caused by the Paris peace Treaties was inflation. Inflation means the sustained increase of prices over time so to buy the same amount of food you had to pay much more money. Before World War 1 many countries used the Gold standard because, although each country had a limited amount of gold, it stopped inflation. Another negative thing of the gold standard is that as the price of gold is high, your currency is high and this leads to expensive exports and cheap imports severely damaging your economy. By 1920 most countries stopped using the gold standard because it could not keep up with the market prices and as a result many countries suffered from Inflation.
