So long as US capital flowed to Europe, Germany could grow (or at least borrow) enough to pay its debts to France and the United Kingdom, which in turn used the same money to pay back its debts to the United States, so long as the United States sent it back to Germany to keep the whole system of payments going. As Fred Block put it with justified irony, “The American contribution to … the problem was to lend Germany huge sums of capital, which were then used to finance reparations payments.” If you think this sounds a little like continually giving the European periphery loans that those countries can never hope to pay back because of their already high debt burdens, again, you would not be completely wrong.

Mark Blyth, Austerity, loc. 501