Communists lead by Ulbricht established Lander governments under soviet military authority
Population 17.3m
Mainly rural, had key industry areas including Saxony but needed Ruhr coal imports
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Western Zones
Favoured ‘democratic’ govs but wanted to prevent Nazism & Communism so suspended political activity
Sep 1945 licensed some parties to have Lander elections, SPD, KPD, CDU, LDP
CDU lead by Adaneur dominated
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British Zone
Contained Ruhr with 87% of coal production and 70% of steel production
Agriculture dependent on imports
22\.3m population
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US Zone
Modern manufacturing in some areas but needed coal imports
Good agriculture
17\.2m population
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French Zone
Saar coalfields & Black forest timber
Some agriculture
15\.9m population
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Potsdam Conference
July-Aug 1945, attended by “big 3” and saw specific differences in opinion over future development
Agreed to take reparations from own zones
Turned zones into seperate economic units
Main issue was Stalin pushing polish border into Germany meaning 1/4 territory lost
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Reparations
USSR were extensive and broke up/moved whole factories, had extra from allied zones
Allies were less demanding and wanted economic revival - from 1946 refused to pay USSR
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Denazification
1946 Nuremburg trials 19/22 Nazis convicted of war crimes
USSR imprisoned them at first but later offered amnesty to anyone willing to support socialism
West saw it as individual issue, many kept their positions
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Democratisation in East
Soviet Zone merged SPD & KPD forming SED, smaller left wing parties forced to coalition
Drew up plans for GDR in 1946 but hoped not to use
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Democratisation in West
Americans heavily promoted democracy
French were suspicious of the Germans
British wanted to impose their own processes
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Feb 1947
British & American zones merge into ‘Bizonia’ which became efficient for distributing Marshall Aid
Operated in Federal way, central gov with Lander representatives
By 1948 had a supreme court
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June 1947
USSR set up German Economic Commission in response to Bizonia, to coordinate Soviet economic policy
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1947-48
Ulbricht calls two “people’s congress” meetings to first try and go against division, and then made to draw up new constitution
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1948
Establishment of Bank Deutscher Lander in Western Zones: France are pressured to join but USSR refuse
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June 1948
Trizonia is formed and the Deustchmark is introduced. Soviets claim this breaks Potsdam terms
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June 1948
Road/Rail passage to Berlin is halted to ‘protect from currency’ and the Ostmark is introduced in the East
E.Berlin refuses to accept western stamps or currency
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June 1948
Temporary airlift begins to get supplies to Berlin, aimed to make Soviets back down but ended up lasting 11 months
Counter-Blockade cuts off steel, chemicals and manufactured goods
UN gets involved and agreement reached in May 1949
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FRG (West)
“Basic Law” allowed for provisional constitution, came into effect 1949
Aug 1949 held first national elections, CDU largest followed by SPD
Nov 1949 admitted to associate member status of council of Europe
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GDR (East)
1949 volkscongress elections held
Volksrat became provisional government, Ulbricht made deputy PM but retained much of his power
SMAD became soviet control commission, and KVP “peoples police” was set up
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350m
Fall in value of exports 1929-1932
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1700m marks
Budget deficit by 1929: Bruning tried to balance by implementing austerity/deplation and cutting spending
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1931 banking crisis
Government set up customs union with Austria, angering France who withdrew currency from Austrian banks
Caused both Austria’s and Germany’s largest banks to collapse
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Sep 1932
Papen issues emergency decree offering tax rebates for employers that took on new staff and relaxation of wage agreement system
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Nov 1932
Schleicher tries to win over unions with: public works, price-fixing and reduced land settlements in East Prussia. However, this alienated industrialists, including Hindenburg.
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12b marks
All peasant debts totalling … are Suspended as part of more ‘socialist’ Nazi policies
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Reich food estate
Introduced July 1933, laid down guaranteed prices for produce and increased protection tariffs
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Wehrwirtschaft
Economy prepared for war - priority so introduced Schact as minister for economics in 1934
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1933 Law to reduce unemployment
Increased government spending on public work schemes, subsidies for private construction and tax rebate and emergency release schemes
Development of amarmemt factories
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1935
Reintroduction of Conscription and creation of “Reich Labour Service” (RAD) where 18-25s had 6 months mandatory work
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Mefo Bills
Credit notes issued by the Reichsbank and guaranteed repayment
Repaying accounted for 50% gov expenditure 1935
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Autobahn
7000km commissioned in 1933, utilised surplus labour
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2\.2b marks
Public expenditure/investment 1932, later exceeded by private investment
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New plan
Sep 1934: increased regulation of imports, development of trade with poorer countries
Strikes later banned
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Negligible
Unemployment in 1939
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Recovery under Schact
(minister of economics 1934-37, also head of Reichsbank)
Unemployment massively decreased however other factors did influence this
Balance of payments deficit remained and reserves of foreign currency stayed low
Food prices increased
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Four Year Plan
Created 1936 with Goering as director, aimed to prepare the economy for war
Included promoting synthetic materials, chemical industry and steelworks
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1/3
Raw materials still imported by 1939: at this point rearmament programmes were also incomplete
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Albert Speer
“Nazi Architect” appointed as minister of economics in 1942, helped organise economy
Established Central planning board to oversee distribution of raw materials
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50%
Increase in armament production within 6 months of planning board’s creation
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25,000+
Aircraft produced in 1944 (over 5x 1940 amount)
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Post-War East Economy
Centralised bank replaces private banks
Nationalised mines and factories
“SAGs” = soviet joint stock companies, “VEBs” = ex-Nazi companies, by 1948 these controlled 60% of industries
“Centralised command economy”
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Post-War west economy
Originally suggested living standards should meet 1932 level, industrial capacity should be 50% of 1938 level & industries would be dismantled
U.S. changed this and said wouldn’t be dismantled if useful
Marshall aid helped grow economy, raising production targets and allowing restructuring
Deutschmark stimulated growth and economy green 30% March-Aug 1938
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1933
Independent unions replaced by mandatory D.A.F
Created “strength through joy” scheme to organise workers free time and offers opportunities
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Nazis & Births
Nazis got rid of Abortion & Birth control centres to increase birth rates
Increased maternity benefits & Child income tax allowances
Honour cross of German motherhood
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Nazis & Marriage
Couples needed certificate of “fitness to marry”
“Unproductive” marriages could be ended
Couples cohabiting after marriage prohibited could be imprisoned
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Nazis & Women
“Law for reduction of unemployment” offers allowances to women who give up work
Marriage loans repayment reduced after birth of each child
Banned from jury service & holding senior party / Reichstag positions
Universities took only 10% female students (late 1930s)