As a Cold War junkie, I always wondered how East and West Germany came to be. At the Yalta Conference in February 1945, the Allies agreed to govern Germany as a whole, with the United States, the Soviet Union, the United Kingdom and France, each to temporarily administer a zone.
How did this arrangement break down? How did two rival German republics emerge? What caused the Berlin blockade? Why were the United States and the Soviet Union brought to the edge of war?
Benn Steil, senior fellow and director of international economics at the Council on Foreign Relations, offers answers lot these questions in his book The Marshall Plan: Dawn of the Cold War (Simon & Schuster).
The breaking point between East and West was economics. In the months after the surrender, Germany and much of Western Europe were destitute. Britain was broke. France wanted to dominate the Rhineland. The Soviets wanted as much reparations—removal of industrial assets and exports of manufactured goods—as Germany could yield.
The United States was left with the responsibility of feeding Germany and getting the Western European economies on the road to recovery.
The immediate split between East and West was over monetary policy. The United States and the Soviet Union each proposed plans for currency reform. These two great powers could never reach a compromise. Eventually each side implemented their own versions of currency reform in their zones of Germany.
To get the Western economies on the road to recovery, the United States proposed the Marshall plan, which drew the three western zones of Germany and most of Western Europe into America’s orbit. The ever suspicious Soviet Union, saw the Marshall Plan as an instrument of imperialism. The Soviet Union forbade the Eastern European states from participating in the Marshall Plan.
The final rupture happened when the Soviet Union blockaded the Western sectors of Berlin, from June 1948 to May 1949. The final division of Europe was solidified when the United States and Britain oversaw the founding of the Federal Republic of Germany in May 1949. The Soviet Union responded by organizing the rival German Democratic Republic in October 1949.
Benn Steil has written a scholarly and comprehensive history. Whatever your interest in the Cold War–be it ideology, economics, strategy, diplomacy, American politics, or just a good story–Steil has a chapter for you.