Although World War One destroyed the economies of many of the countries in Europe, no country was left so damaged in this regard as Germany. France and Belgium might have sustained more material damage to their territory, but Germany received lasting economic damage from which it would not recover for many years. The two main reasons for this were political deadlock and the reparations payments that the Allies made the Germans pay.
These two factors kept the German economy from functioning in the post war years and caused some of the worst hyperinflation in history.
From its foundation, the Weimar Republic was disliked by large sections of the German people. The soldiers and the far left felt that it had betrayed them, the devoutly religious felt that it did not represent them, and the communists did not believe it went far enough. Weimar had proportional representation, so any group could form its own party and receive representation in the Reichstag by only getting a small percentage of the vote. This allowed radical parties to have their voices heard.
At the same time, it led to increasing radicalization. Parties had to maintain the party line and could not afford to compromise on issues because doing so might alienate some of their supporters who might go and form their own party. To prevent this from happening, parties stayed fairly radical and unwilling to compromise. As a result, the German government was at an almost constant standstill during the Weimar Republic. These political problems hurt the economy and prevented it from rebuilding.
The main factor in the hyperinflation, however, were the reparations payments that the Allies demanded of the Germans as part of the Versailles treaty. This treaty demanded that Germany accept full responsibility for World War One and that it pay for the entire cost of the war. In 1921, the Allies set the sum to be paid at about 31.4 billion dollars. This was considerably more than the gross domestic product of the entire country, so many in Germany felt that there would be no way that Germany would be able to pay such a sum, even if given many years to do so. Many also realized that it would seriously handicap the Germany economy which was already suffering from the political deadlock.
When Germany stopped paying, however, French and Belgians occupied Germany's Ruhr industrial region to take what resources they could. In response, the workers in that area began a general strike against the foreign occupiers and refused to work for them. That strategy was eventually successful at getting the French and the Belgians to leave, but it brought the Germany economy to a standstill. Factories around the country had to shut down because they were not getting the materials they needed from the Ruhr region. At the same time, the Germany government still have numerous responsibilities that it was obliged to meet, such as army pensions and unemployment insurance.
The effect that all of this instability had on the Germany economy is astounding. From January 1919 to January 1922, the German Mark fell from 8.9 to 191.8 to the US Dollar. By June of 1922, the Mark had fallen to 350 per USD and by October of that year, it was 4,500 per USD. Between January and November of 1923, the value dropped from 18,000 per USD to 4.2 TRILLION per USD. Obviously, this hyperinflation devastated the Germany economy. Life savings became worthless and loans were essentially wiped out. It got so bad, that workers began demanding that they be paid twice per day, because their wages would otherwise be rendered worthless by the time they got off work. People had to barter for goods and used their currency as wallpaper and fuel for fires because it was more valuable as those things than as money.
