Effects Of Post Ww2 On Germany
Post WWII, the economic situation was very difficult for Germany, as East Germany was captured by the Soviets and West Germany, which is now known as Germany. Partition of the country between West and Soviets created a huge gap within the economy as West specialized in industry and East specialized in agriculture. In order to fix Germany’s economy, United States agreed to finance The Marshall Plan. It is an aid program for Europe of $13 billion, of which $2 billion will go to Germany. However, the amount Germany received was less compared to $2.4 billion that Germany had to pay to their Allies.
Ludwig Erhard, the West German minister, contribution boosted the West Germany economy. Erhard reduced the tax rates, abolished restrictions on prices,
and also introduced a new currency in 1948, called the Deutschmark, which also helped in eliminating inflation. Erhard’s policy was a major success for West Germany economy. The success was so huge that the Germans decided to name the period from late 1940s to 1950s the “Wirtschaftswunder”. After that tough period, Germany went on to become the powerhouse of Economy in Europe, which it still is today.
Ludwig Erhard, the West German minister, contribution boosted the West Germany economy. Erhard reduced the tax rates, abolished restrictions on prices,
and also introduced a new currency in 1948, called the Deutschmark, which also helped in eliminating inflation. Erhard’s policy was a major success for West Germany economy. The success was so huge that the Germans decided to name the period from late 1940s to 1950s the “Wirtschaftswunder”. After that tough period, Germany went on to become the powerhouse of Economy in Europe, which it still is today.