While the concept of asset stranding has become a common place in the literature on the Green Transition, there is a lack of historical case studies that investigate at a large-scale level through which mechanisms asset stranding can actually manifest itself in real-world context and what the wider political-economics implications are. To remedy this gap, we interpret the Treaty of Versailles—concluded in June 1919 as the peace agreement for the First World War—as the ‘mother of all asset stranding’ in the 20th century as they rendered the outstanding sovereign debts of the defeated German Empire impossible to be repaid. We adopt the ‘Monetary Architecture’ framework to trace how the contraction of the outstanding debt burden has been managed. To this end, we investigate three types of debt that according to our definition got stranded after the war: German war bonds, German reparation debt, and inter-allied war debts. We trace the ways and mechanisms how policymakers sought to maintain funding or bring about contraction of these financial instruments and derive implications for the literature on asset stranding in the context of the Green Transition.
Presentation at the “Spring Meeting” at Hertie School of Governance in Berlin (04/2025).
Co-authors:
Armin Haas, Global Climate Forum
Verena Gradinger, Global Climate Forum
Andrei Guter-Sandu, University of Bath
