The Treaty of Rapallo was an agreement made in the Italian town of Rapallo on April 16, 1922 between Germany (the Weimar Republic) and the Soviet Russia under which each renounced all territorial and financial claims against the other following the Treaty of Brest-Litovsk and World War I.
The two governments also agreed to normalise their diplomatic relations and to "co-operate in a spirit of mutual goodwill in meeting the economic needs of both countries".
A supplementary agreement signed at Berlin on November 5 extended the treaty to cover Germany's relations with Russian controlled (or heavily influenced) Soviet republics of Ukraine, Belarus, Georgia, Azerbaijan, Armenia and the Far Eastern Republic.
The treaty ended the diplomatic isolation of both countries in the wake of World War I and the Russian Revolution of 1917. It was intended to form as an anti-Versailles axis against the West, since both groups lost a considerable amount of territory and political power under the treaty. In the West, it was viewed with alarm as strengthening the international position of both governments. Many conservative and far-right elements with the Weimar Republic were also alarmed by the government's decision to negotiate and maintain good relations with a communist state, despite the Weimar coalition's SPD having been involved in the brutal suppression of the national communist party (KPD) including the murder of Rosa Luxemburg and Karl Liebknecht.
Poland, the Baltic states and Finland were concerned by this strengthening of Russian (now USSR) positions. The attempt to counter this development by closer cooperation in the fields of defence and foreign politics failed however, mainly due to resistance in the parliaments.