The economic problems of Germany following World War I were due to the war reparations that it had to pay as part of the Treaty of Versailles. Apart from the reparations, there were other causes. Rather than raise taxes to make new taxes to finance the war. Instead, it took out loans and the increase circulation of money caused inflation and the budget was destabilized. This made it difficult for Germany to pay the reparations that the Treaty required them to pay for the war.