West Germany Essay

The economy of West Germany was created by the merger of the individual zones of the French, British and Americans powers to create a united economic entity for West Germany in 1948. The Western powers were instrumental in rejuvenating the economy of the newly formed state. They instituted measures such as ending price controls and putting a new currency in place. This was done not only to create an ally and trade partner but also to impress upon West German leaders that the nation would be a part of the capitalist bloc and would consequently participate in western economic alliances such as the EU. The European Coal and Steel Community (ECSC), the precursor to the EEC, was formed by French Foreign Minister Robert Schuman in the hopes that this organization would reduce the effects of war devastation in Europe, improve relations between France and Germany and place West Germany firmly in the cohort of European nations. Due to its membership of the ECSC and the EEC, West Germany was required to reduce duties and restrictions on trade, promote its economic relations with Western European nations and integrate with other
It also became part of the atmosphere of the Cold War due to tensions with East Germany. “Side by side, these two nations offered a perfect way to compare the two major economic systems in the world.” The two nations were often at loggerheads as representations of two competitive economic ideologies and this explains why there was no trade between them. Since East Germany was firmly allied with the Soviet Union and the prosperity of West Germany was in marked contrast to the poverty of East Germany, the USSR would not trade with West Germany. Since West Germany was highly dependent on Western European countries, it had no trade relations with the USSR. This can be explained by the sharp division of Europe into the two opposing camps- the Western camp and the Soviet