The German Democratic Republic was formed from what once was the Soviet Zone of Germany. After the tensions of the cold war became too hostile for all participants Germany was divided into East Germany and West Germany and were renamed the GDR for the East and the FRG for the West. The GDR was formed in October 1949 and was governed by the SED, a political party made up of the Communist Party and the Socialist Party. Wilhelm Pieck was appointed president, Otto Grotewohl Prime Minister and Walter Ulbricht became the First Secretary, a role which was more superior when it came to decision making. This new socialist state was a part of the Eastern Bloc and it soon became the most successful state within it. The USSR had a very big influence on East Germanys policies and there economy, due to the communal beliefs in socialist and communist ideas. In addition, I believe that the USSR did control the GDR as East Germanys markets and resources were managed for the benefit of the Soviet Union, not for the benefit of the Citizens of the GDR.
In 1949, the newfound GDR not only experienced a change in authority, but a new approach in governing. Instead of developing the state by creating a competitive market like in the West, the GDR took the approach of making everything equal and state owned, like the USSR. The GDR pursued policies of state ownership of agriculture and industry which was modelled on the policies pursued by Stalin in the USSR in the 1930s. Even though East Germany was now a new state, it still was obligated to pay reparations to the USSR. The USSR heavily demanded 25% of all of East Germanys industrial goods. However, now industry was owned by the state, the government were able to increase the rate of production by establishing five year plans, consisting of ambitious targets. The targets were set so that East Germany were able to pay the reparations to the USSR and have a