Why did European nations face financial challenges after World War 1?

European nations faced financial challenges after World War I due to the enormous costs of the war, which left many countries deeply in debt. Additionally, the destruction of infrastructure and loss of workforce hampered economic recovery. The Treaty of Versailles imposed heavy reparations on Germany, leading to economic instability across the continent, while global trade disruptions and the 1920s economic downturn further exacerbated financial difficulties. These factors collectively contributed to a prolonged period of economic hardship in Europe.