The Great Depression, a period of time lasting from 1929 to 1939, drastically affected the United States and created ripples through all world economies. European economies already hurting from economic problems prior to and after World War I were magnified after the 1929 crash of the U.S. economy.

Increased Production During the 1920s

Advancements in mechanized equipment and access to electricity lead to increases in crop and manufacturing production, which created price declines.

Hyperinflation

European countries needing to pay for war expenses printed additional money, creating hyperinflation during and after World War I and during the depression. This devalued personal wealth and created economic instability.

Lack of U.S. Investment and War Debts

After World War I, American investments were used to rebuild European infrastructures and industries. When Wall Street collapsed, investments ended. Germany was no longer able to pay reparations to European Allies dependent upon those payments.

Collapse of European Currencies

Currencies collapsed when the United States withdrew its funds from European banks. Countries began selling their own currencies to maintain values, but it was not sufficient to prevent bank failures.

Tariffs on Imports

In a desperate attempt to protect domestic production of goods, European countries increased or created new tariffs on imported products. International trade was negatively affected, which in the end caused further reduced production within European economies.

Rationing

Governments attempted to control inflation through rationing and restrictions on trade. This meant businesses could not access goods or materials to increase, improve or begin new production.

Source:

University of Illinois: About the Great Depression

Pearson Higher Education: Europe and the Great Depression of the 1930's

History Today: The Great Depression in Europe, 1929-39