On May 7, 1945, Germany presented its unconditional surrender. At the Yalta Conference the preceding February, the Allies had agreed to divide the soon-to-be-defeated Germany into four military occupation zones—French in the southwest, British in the northwest, American in the south, and Soviet in the east. Berlin, in the Soviet sector, was also divided into four zones. Territories east of the Oder and Neisse rivers were administered either by Poland or by the Soviet Union and were eventually absorbed by those countries. In 1947 the Saar region was put under separate French administration. In 1945 and 1946 an international tribunal was held at Nürnberg to try Nazi leaders. Almost all were executed or imprisoned for war crimes and crimes against humanity (Nürnberg Trials).
The years from 1945 to 1947 were economically desperate times for all Germans. During this period, more than 10 million refugees fled or were expelled from the Soviet zone and elsewhere in the East. The refugees posed a grave problem in the Western zones, where food and housing were already scarce, but once economic activity revived they provided valuable labor and skills.
Britain, the United States, and eventually France distrusted the USSR, which they saw as expansionist. To counter the USSR, they sought to rebuild Germany into a major Western European power. In 1947 the U.S. and British zones were combined into one administrative unit, called Bizonia, and the French zone was later added to form Trizonia.
In the Western zone, the former German currency was abolished in 1948, and a new, stable currency, the deutsche mark, was introduced. United States aid under the Marshall Plan (see European Recovery Program) helped revive the private economy. This was the start of the reconstruction that eventually transformed West Germany into the most prosperous country in Europe. In the Soviet zone, a very different economic system developed. All landholdings of more than 100 hectares (250 acres) were broken up and distributed to small farmers and landless workers.
Banks were nationalized. Many factories were dismantled and shipped to the Soviet Union as partial reparation for war damages. What industry remained was mostly nationalized. "Germany" © Emmanuel BUCHOT, Encarta, Wikipedia
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