In May 1921, British Treasury officials developed a proposal that they believed to be so reasonable that Germany would find it difficult to turn down. The reparations bill was to be set at the equivalent of $12.5 billion, roughly 100 percent of the German prewar GDP. To meet the annual interest and principal repayments on this new debt, Germany was required to pay between $600 million and $800 million, a little over 5 percent of its annual GDP.
