ARMY HISTORICAL SERIES

        OFFICE OF THE CHIEF OF MILITARY HISTORY
 UNITED STATES ARMY
As in 1918-19, the defeat of Germany again led to a catastrophic political, social and economic collapse. With many German cities reduced to rubble by Allied bombing, millions of military and civilian refugees attempting to return home or flee the invading armies, the economy in complete collapse, and infrastructure (roads, bridges, rail roads) destroyed, the country was occupied and divided by the four victorious powers (France, Britain, USA, and USSR). Between 1945 and 1949 the four powers attempted to bring some order to the chaos of the defeated Third Reich, to feed and house millions of displaced Germans, to capture and punish Nazi war criminals (through the Nuremberg War Crimes Trials), to "denazify" German society and to begin the complex task of rebuilding central Europe.

As relations between the USA and USSR became worse as a result of the "Cold War" plans to reunify the occupied sectors of Germany were abandoned. In 1948-9 the division of Europe into an American dominated, "capitalist" West and a Russian dominated, "socialist" East became permanent. Russian sponsored communist revolutions in the revived independent states of
Czechoslovakia, Hungary, Poland led to the creation of Stalinist centrally planned economies on the eastern side of the "Iron Curtain." Tensions also arose in 1948-49 between the Russian controlled "east" Germany and "west" Germany "(France, Britain, USA). The Russians attempted to blockade Berlin (ruled jointly by the 4 powers) in order to drive the other allied powers out and this resulted in the famous Berlin airlift. In 1949 conservative free market politicians in the "western" sectors of Germany introduced radical free market reforms which led to a total break with the communist dominated east. The end result was the formation of a free market "Federal Republic of Germany" (Bundesrepublik Deutschland - BRD) in the west and a Stalinist centrally planned "German Democratic Republic" (Deutsche Demokratishe Republik - DDR) in the east.

Vienna and Austria were occupied and divided in a similar way to Berlin and Germany. However, the allied powers were able to agree upon the creation of a second Austrian Republic which would be neutral and a complete withdrawal of occupying forces was completed by 1955.