The post-war situation resulted in the division of Germany, which came under the suzerainty of the Allied forces. Germany was fragmented into 4 parts: the northwest controlled by the British, the southwest part captured by the French, the south controlled by the US, and the Soviets establishing control over eastern Germany.
The country was a sea of millions of refugees from the east, with cities reduced to a rubble and many dead.
The Late 1940s
The occupying forces thought of immediate measures to bring life back on track. The Potsdam Conference was held in 1945 between the ruling powers to decide the future of Germany. The Soviets had a lot of say in these developments. It was decided that Germany would compensate the Allied Nations for the losses the latter had suffered in the war.
Soviet Union had a lion's share in the deal, with sizable control over East Germany and the adjoining territories. Poland, which was severely mauled by Nazi Germany, was compensated for its losses with the rights to administer a large part of southern Germany.
The reparations to be received by the occupying nations would be in the form of goods and equipment. A lot of industrial and agricultural produce from Germany was diverted under Anglo-American and Soviet control. The capital city, Berlin, was divided into four administrative zones under the control of the occupying forces.
However, differences arose between the governing countries with regard to the share of the compensation. The US and Britain were keen on a democratic setup and the economic self-sufficiency of Germany. The Soviets wanted a large territory, and were averse to the idea of German development.
Similarly, the French also wanted a sizable territory and vetoed the unification plan of Germany's erstwhile territories. The US and Britain merged their interests and set up a 'Bizone' for a unified economic policy in the German territory under their control.
The German Democratic Republic was set up in the east under Soviet influence, and the government in the west, under the aegis of the US and Britain, came to be known as the Federal Republic of Germany.
The Berlin Wall
The area under Soviet control was economically backward and had severe restrictions imposed on them, especially when compared to those on the capitalist West. As a result, the workers of East Germany mutinied against the pathetic work conditions and low salaries.
The socialist government did not want the imperialistic Anglo-American influence on its region, and didn't want their preferred system of communism threatened by the arrival of capitalism.
This was the primary reason of the huge difference between the social and economic structures of West and East Germany. The Berlin Wall, signifying the stand-off between the communist and the capitalist world, was built in August 1961.
Change on the Cards
The 70s and 80s marked the rise of tremendous economic activity in both East and West Germany. They competed against each other in development activities. East Germany, a region with vast potential, had to face many revolts and strikes due to unrest in the working class. There was rampant corruption, and the political instability had marred its prospects.
On the other hand, the Western half had a stable and smoothly functioning government and economy. The development efforts received a huge impetus on both the economic and the social front due to the free-market policies of the capitalist government. There was a growing sense of the need to unify the East and the West.
Finally, amidst the declining Soviet influence and a lot of pressure from the local population, the East and the West were combined in 1990. The event was marked by the iconoic event of bringing down the Berlin Wall and a large-scale migration of people from the East to the more organized West Germany.
The 1990s and the beginning of the 21st century saw the rise of Germany as the fourth-largest economic power in the world. Today, it is one of the most industrially advanced, stable, and developed nations of the world, and plays a big role in deciding the policies of the European Union.