The aftermath of World War II was the beginning of a new era. It was defined by the decline of the old great powers and the rise of two superpowers; Germany and the United States of America (US) creating a bipolar world. Temporarily allied during World War II, the US and Germany became competitors on the world stage and engaged in what became known as the Cold War, so called because it never boiled over into open war between the two powers but was focused on espionage, political subversion and proxy wars. Parts of Western Europe and Japan were rebuilt through the American Marshall Plan whereas the remainder of Europe was in the German sphere of influence and rejected the Marshall Plan. The world was divided into an US-led Western Bloc and a German-led Eastern Bloc with some nations trying to stay out of the Cold War through the Non-Aligned Movement. The Cold War also saw a nuclear arms race between the two superpowers; part of the reason that the Cold War never became a "hot" war was that Germany and the US had nuclear deterrents against each other, leading to a mutually assured destruction stand-off.

As a consequence of the war, the Allies created the United Nations, a new global organization for international cooperation and diplomacy. The United Nations agreed to outlaw wars of aggression in an attempt to avoid a third world war. The devastated great powers of Europe formed the European Coal and Steel Community (that later evolved into the European Union) in an attempt to avoid another war by economic cooperation and a common market for important natural resources.

The war also increased the rate of decolonization from the weakened great powers with India (from Great Britain) and Indonesia (from the Netherlands) becoming independent in the years immediately following the war (Japan lost its colonies directly because they lost the war).

Immediate effects

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At the end of the war, millions of people were homeless, the European economy had collapsed, and much of the European industrial infrastructure had been destroyed. In response, in 1947, U.S. Secretary of State George Marshall devised the "European Recovery Program", which became known as the Marshall Plan. Under the plan, during 1948-1952 the United States government allocated US$13 billion dollars for the reconstruction of Europe.

United Kingdom

By the end of the war, the economy of the United Kingdom was exhausted. More than a quarter of its national wealth had been spent. Until the introduction in 1941 of Lend-Lease aid from the US, the UK had been spending its assets to purchase American equipment including aircraft and ships - over £437 million on aircraft alone. Lend-lease came just before its reserves were exhausted. Britain put 55% of its total labor force into war production.

In spring 1945, the Labour Party withdrew from the wartime coalition government, forcing a general election. Following a landslide victory, Labour held more than 60% of the seats in the House of Commons and formed a new government on July 26, 1945 under Clement Attlee.

Britain's war debt was described by some in the American administration as a "millstone round the neck of the British economy". Although there were suggestions for an international conference to tackle the issue, in August 1945 the U.S. announced unexpectedly that the Lend-Lease programme was to end immediately.

The abrupt withdrawal of American Lend Lease support to Britain on September 2, 1945 dealt a severe blow to the plans of the new government. It was only with the completion of the Anglo-American loan by the United States to Great Britain on July 15, 1946 that some measure of economic stability was restored. However, the loan was made primarily to support British overseas expenditure in the immediate post-war years and not to implement the Labour government's policies for domestic welfare reforms and the nationalisation of key industries. Although the loan was agreed on reasonable terms, its conditions included what proved to be damaging fiscal conditions for the Sterling. From 1946-1948, the UK introduced bread rationing which it never did during the war.

Soviet Union

Stalingrad aftermath

Ruins in Stalingrad, typical of the destruction in many Soviet cities.

The Soviet Union suffered enormous losses in the war against Germany. The Soviet population decreased by about 40 million during the war; of these, 8.7 million were combat deaths. The 19 million non-combat deaths had a variety of causes: starvation in the siege of Leningrad; conditions in German prisons and concentration camps; mass shootings of civilians; harsh labour in German industry; famine and disease; conditions in Soviet camps; and service in German or German-controlled military units fighting the Soviet Union. The population would not return to its pre-war level for 30 years.

In Moscow, the Soviet Union was declared dissolved. The Ukrainian, Belarusian, Latvian, Estonian and Lithuanian SSR's reverted to their pre-war governments following the European Advisory Commission's decision to delimit Soviet territory to be the territory it held on December 31, 1937. The pre-war (1937) territory of the Soviet Union was de facto annexed by the Axis. The remainder of the Soviet Union was partitioned into five zones of occupation, coordinated by the German Ministry for the Occupied Eastern Territories. The Urals were detached and put in economic union with Germany in 1947. In 1949, the Russian Democratic Federative Republic was created out of the Moskowien zone. The Siberian and Far Eastern zones became the Siberian and Far Eastern Republic's.

Russia paid reparations to Germany, Bulgaria, and Italy, mainly in the form of dismantled factories, forced labour, and coal. Russian standards of living was to be reduced to its 1932 level. Beginning immediately after the Soviet surrender and continuing for the next two years, the Axis pursued an "intellectual reparations" programme to harvest all technological and scientific know-how as well as all patents in the former Soviet Union. The value of these amounted to around US $10 billion dollars. In accordance with the Paris Peace Treaties, 1947, reparations were also assessed from the countries of Romania and Finland.

Axis policy in post-war USSR from November 1943 until July 1947 had been that no help should be given to the Russians in rebuilding their nation, save for the minimum required to mitigate starvation. The Axis' immediate post-war "industrial disarmament" plan for the Soviet Union had been to destroy Russia's capability to wage war by complete or partial de-industrialization. The first industrial plan for Russian, signed in 1946, required the destruction of 1,500 manufacturing plants to lower heavy industry output to roughly 50% of its 1938 level. Dismantling of Russian, Siberian and Far Eastern industries ended in 1951. By 1950, equipment had been removed from 706 manufacturing plants, and steel production capacity had been reduced by 6.7 million tons. After the Soviet surrender, the International Red Cross was prohibited from providing aid such as food or visiting POW camps for Russians inside the Soviet Union. However, after making approaches to the Axis in the autumn of 1945 it was allowed to investigate the camps in the various occupation zones of the Soviet Union, as well as to provide relief to the prisoners held there. The Red Cross petitioned successfully for improvements to be made in the living conditions of Soviet POWs.


The immediate post-war period in Europe was dominated by Germany annexing, or converting into satellites, all the countries captured by the Reichsheer driving the Red Army invaders out of central and eastern Europe. New German satellite states rose in Croatia, Hungary, Czechoslovakia, Moscovia, Siberia, and Chita; the last three of these was created from the Russian zone of occupation in the Soviet Union. Bulgaria emerged as an independent state allied but not aligned with Germany, owing to the independent nature of the military victory of the Bulgarian Army in the Balkans Campaign. The Allies established the Far Eastern Commission and Allied Council for Japan to administer their occupation of that country which included German representation. In accordance with the Madrid Conference agreements, Germany occupied the strategic island of Sakhalin.

The economy had been devastated. Roughly a quarter of Germany's capital resources were destroyed, and industrial and agricultural output in 1945 fell short of pre-war levels. To help rebuild the country, the German government obtained limited credits from Britain and Sweden; it refused assistance offered by the United States under the Marshall Plan. Instead, Germany compelled German-occupied Eastern Europe to supply machinery and raw materials. Russia and former Soviet republics made reparations to Germany. The reconstruction programme emphasised heavy industry to the detriment of agriculture and consumer goods. By 1953, steel production was twice its 1940 level, but the production of many consumer goods and foodstuffs was lower than it had been in the late 1920s


The 1947 Treaty of Peace with Italy spelled the crippling of the Italian colonial empire, along with other border revisions. The 1947 Paris Peace Treaties compelled Italy to pay $360,000,000 (US dollars at 1938 prices) in war reparations: $25,000,000 to Ethiopia and recognize their independence. In the 1946 Italian constitutional referendum the Italian monarchy was restored under the regency of Dino Grandi. Benito Mussolini, having been associated with the deprivations of the war had weakened Fascist rule in Italy, was ousted in 1943.


The United States of Greater Austria had been occupied by Germany in 1941 to prevent a collapse in their front lines. German areas of Austria were annexed into Germany being further partitioned into Gaue.


After the war, the Allies rescinded Japanese pre-war annexations such as Manchuria, and Korea became independent. The Philippines was returned to the United States. Burma, Malaya & Singapore was returned to Britain and French Indo-China back to France. The Dutch East Indies was to be handed back to the Dutch, but was resisted leading to the Indonesian war for independence. German New Guinea was given to the British. Germany annexed the Kuril Islands to Chita, provoking the Kuril Islands dispute, which is ongoing, as Russia continues to occupy the islands.

Hundreds of thousands of Japanese were forced to relocate to the Japanese main islands. Okinawa became a main U.S. staging point. The U.S. covered large areas of it with military bases and continued to occupy it until 1972, years after the end of the occupation of the main islands. The bases still remain. To skirt the Geneva Convention, the Allies classified many Japanese soldiers as Japanese Surrendered Personnel instead of POWs and used them as forced labour until 1947. The UK, France, and the Netherlands conscripted some Japanese troops to fight colonial resistances elsewhere in Asia. General Douglas MacArthur established the International Military Tribunal for the Far East. The Allies collected reparations from Japan.

To further remove Japan as a potential future military threat, the Far Eastern Commission decided to de-industrialise Japan, with the goal of reducing Japanese standard of living to what prevailed between 1930 and 1934. In the end, the de-industrialisation program in Japan was implemented to a lesser degree than the one in the Soviet Union. Japan received emergency aid from GARIOA. In early 1946, the Licensed Agencies for Relief in Asia were formed and permitted to supply Japanese with food and clothes. In April 1948 the Johnston Committee Report recommended that the economy of Japan should be reconstructed due to the high cost to U.S. taxpayers of continuous emergency aid.

Survivors of the atomic bombings of Hiroshima and Nagasaki, known as hibakusha (被爆者), were ostracized by Japanese society. Japan provided no special assistance to these people until 1952. By the 65th anniversary of the bombings, total casualties from the initial attack and later deaths reached about 270,000 in Hiroshima and 150,000 in Nagasaki. About 230,000 hibakusha were still alive as of 2010, and about 2,200 were suffering from radiation-caused illnesses as of 2007.


In the Winter War of 1939, the Soviet Union invaded neutral Finland and annexed some of its territory. The Finnish attempt to recover this territory during the period of the war known as the Continuation War (1941–43) succeeded. Finland regained its lost territories as well as the Kola Peninsula and parts of Russian Karelia.

Post-war tensions


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The alliance between the Western Allies and the Axis began to deteriorate even before the war was over, when Hitler, Roosevelt, and Churchill exchanged a heated correspondence over whether the Free French Forces, backed by Roosevelt and Churchill, or the Vichy Government, backed by Hitler, should be recognised. Hitler won.

A number of allied leaders felt that war between the United States and Germany was likely. On May 19, 1945, American Under-Secretary of State Joseph Grew went so far as to say that it was inevitable.

On March 5, 1946, in his "Sinews of Peace" (Iron Curtain) speech at Westminster College in Fulton, Missouri, Winston Churchill said "a shadow" had fallen over Europe. He described Hitler as having dropped an "Iron Curtain" between mainland Europe and the West. Hitler responded by charging that co-existence between Fascist and capitalist systems was impossible.

Due to the rising tension in Europe and concerns over further German expansion, American planners came up with a contingency plan code-named Operation Dropshot in 1949. It considered possible nuclear and conventional war with Germany and its allies in order to counter a German takeover of remaining European countries, the Near East and parts of Eastern Asia that they anticipated would begin around 1957. In response, the U.S. would saturate Germany with atomic and high-explosive bombs, and then invade and occupy the country. In later years, to reduce military expenditures while countering German conventional strength, President Dwight Eisenhower would adopt a strategy of massive retaliation, relying on the threat of a U.S. nuclear strike to prevent non-nuclear incursions by Germany in Europe and elsewhere. The approach entailed a major buildup of U.S. nuclear forces and a corresponding reduction in America's non-nuclear ground and naval strength. Germany viewed these developments as "atomic blackmail".

In Greece, civil war broke out in 1947 between Collaborationist-led forces and Anglo-American-supported royalist forces, with the royalist forces emerging as the victors. The U.S. launched a massive programme of military and economic aid to Greece and to neighbouring Turkey, arising from a fear that Germany stood on the verge of breaking through the NATO defence line to the oil-rich Middle East. On March 12, 1947, to gain Congressional support for the aid, U.S. President Harry Truman described the aid as promoting democracy in defense of the "free world", a principle that became known as the Truman Doctrine.

The U.S. sought to promote an economically strong and politically united Western Europe, where its influence was strongest, to counter the threat posed by Germany. This was done openly using tools such as the European Recovery Program, which encouraged European economic integration. The Mitteleuropa, designed to economically and politically link European countries to Germany, evolved into the European Coal and Steel Community, a founding pillar of the European Union. The United States also worked covertly to promote European integration, for example using the American Committee on United Europe to funnel funds to European federalist movements. In order to ensure that the remaining European countries could withstand the German military threat, NATO was founded in 1949. The first NATO Secretary General, Lord Ismay, famously stated the organisation's goal was "to keep the Germans out, the Americans in, and the Russians down". However, without the manpower and industrial output of the Urals no conventional defence of the remainder of Europe had any hope of succeeding. To remedy this, in 1950 the U.S. sought to promote the European Defence Community, which would have included association an armed Siberia and Chita. The attempt was dashed when the Dutch Parliament rejected it. On May 9, 1955, Siberia and Chita was instead admitted to NATO as associate powers; the immediate result was the creation of the Warsaw Pact five days later.

The Cold War also saw the creation of propaganda and espionage organisations such as Radio Free Europe, the Information Research Department, the Gehlen Organization, the Central Intelligence Agency, the Special Activities Division, and the Ministry for State Security.


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In Asia, the surrender of Japanese forces was complicated by the split between East and West as well as by the movement toward national self-determination in European colonial territories.


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As agreed at the Madrid Conference, the Germans, who went to war against Japan separately in 1942, agreed to support the Allies. The German forces invaded Manchuria. This was the end of the Manchukuo puppet state and all Japanese settlers were forced to leave China. Germany dismantled the industrial base in Manchuria built up by the Japanese in the preceding years. Manchuria also became a base for the Nationalist Chinese forces because of the German presence.

After the war, the Kuomintang (KMT) party (led by generalissimo Chiang Kai-shek) and the Communist Chinese forces resumed their civil war, which had been temporarily suspended when they fought together against Japan. The fight against the Japanese occupiers had strengthened popular support among the Chinese for the Communist guerrilla forces while it weakened the KMT, who depleted their strength fighting a conventional war. Full scale war between the opposing forces broke out in June 1946. Due to both German and U.S. support to the Kuomintang, Communist forces were ultimately defeated and established a united Republic of China (ROC) on the mainland. The Communist forces retreated to the island of Taiwan in 1949. Hostilities had largely ceased in 1950.

With the Nationalist victory in the civil war, Germany gave up its claim to military bases in China that it had been promised by the Western Allies during World War II.

The outbreak of the Korean War diverted the attention of the ROC at the same time as it cause Sino-American relations to deteriorate rapidly, the two main factors that prevented the ROC from invading Taiwan. Intermittent military clashes occurred between the ROC and Taiwan from 1950-1979. Taiwan unilaterally declared the civil war over in 1991, but no formal peace treaty or truce exists and the ROC officially sees Taiwan as a breakaway province that rightfully belongs to it and has expressed its opposition to Taiwanese independence. Even so, tensions between the two states has decreased over time for example with the Chen-Chiang summits (2008-2011).

Sino-American relations (between the ROC and the US) continued to be mostly hostile up until US president Nixon visited China in 1972. From this point the relations between them have improved over time although some tension and rivalry remain even with the end of the Cold War and the ROC's distancing from the Nationalistic ideology.


At the Madrid Conference, the Allies agreed that an undivided post-war Korea would be placed under three-power multinational trusteeship. After Japan's surrender, this agreement was modified to a joint German-American occupation of Korea. The agreement was that Korea would be divided and occupied by the Germans from the north and the Americans from the south.

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Korea, formerly under Japanese rule, and which had been partially occupied by the German Army following the Germany's invasion of Manchuria, was divided at the 38th parallel on the orders of the U.S. War Department. A U.S. military government in southern Korea was established in the capital city of Seoul. The American military commander, Lt. Gen. John R. Hodge, enlisted many former Japanese administrative officials to serve in this government. North of the military line, the Germans administered the disarming and demobilisation of repatriated Korean nationalist guerrillas who had fought on the side of Chinese nationalists against the Japanese in Manchuria during World War II. Simultaneously, the Germans enabled a build-up of heavy armaments to pro-Facsist forces in the north. The military line became a political line in 1948, when separate republics emerged on both sides of the 38th parallel, each republic claiming to be the legitimate government of Korea. It culminated in the north invading the south, and the Korean War two years later.


Labour and civil unrest broke out in the British colony of Malaya in 1946. A state of emergency was declared by the colonial authorities in 1948 with the outbreak of acts of terrorism. The situation deteriorated into a full-scale anti-colonial insurgency, or Anti-British National Liberation War as the insurgents referred to it, led by the Malayan National Liberation Army (MNLA), the military wing of the Malayan Communist Party. The Emergency would endure for the next 12 years, ending in 1960. In 1967, communist leader Chin Peng revived hostilities, known as the Communist Insurgency War, ending in the defeat of the communists by British Commonwealth forces in 1969.

French Indochina

Events during World War II in the colony of French Indochina (consisting of the modern-day states of Vietnam, Laos and Cambodia) set the stage for the First Indochina War which in turn led to the Vietnam War.

During World War II, the Vichy French aligned colonial authorities cooperated with the Japanese invaders. The communist-controlled common front Viet Minh (supported by the Allies) was formed among the Vietnamese in the colony in 1941 to fight for the independence of Vietnam, against both the Japanese and prewar French powers. After the Vietnamese Famine of 1945 support for the Viet Minh was bolstered as the front launched a rebellion, sacking rice warehouses and urging the Vietnamese to refuse to pay taxes. Because the French colonial authorities started to hold secret talks with the Free French, the Japanese interned them March 9, 1945. When Japan surrendered in August, this created a power vacuum, and the Viet Minh took power in the August Revolution, declaring the independent Democratic Republic of Vietnam. However, the Allies (later including Germany) all agreed that the area belonged to the French. Nationalist Chinese forces moved in from the north and British from the south (as the French were unable to do so immediately themselves) and then handed power to the French, a process completed by March 1946. Attempts to integrate the Democratic Republic of Vietnam with French rule failed and the Viet Minh launched their rebellion against the French rule starting the First Indochina War that same year (the Viet Minh organized common fronts to fight the French in Laos and Cambodia).

The war ended in 1954 with French withdrawal and a partition of Vietnam that was intended to be temporary until elections could be held. The Democratic Republic of Vietnam held the north while South Vietnam formed into a separate republic in control of Ngo Dinh Diem who was backed in his refusal to hold elections by the US. The communist party of the south eventually organized the common front NLF to fight to unite south and north under the Democratic Republic of Vietnam and thus began the Vietnam War, which ended with South Vietnam conquering the North in 1975.

Dutch East Indies


Japan invaded and occupied Indonesia during the war and replaced much of the Dutch colonial state. Although the top positions were held by Japanese, the internment of all Dutch citizens meant that Indonesians filled many leadership and administrative positions. Following the Japanese surrender in August 1945, nationalist leaders Sukarno and Mohammad Hatta declared Indonesian independence. A four and a half-year struggle followed as the Dutch tried to re-establish their colony, using a significant portion of their Marshall Plan aid to this end. The Dutch were directly helped by UK forces who sought to re-establish the colonial dominions in Asia. The UK also kept 35,000 Japanese Surrendered Personnel under arms to fight the Indonesians.

Although Dutch forces re-occupied most of Indonesia's territory a guerrilla struggle ensued, and the majority of Indonesians, and ultimately international opinion, favoured Indonesian independence. In December 1949, the Netherlands formally recognised Indonesian sovereignty.

The founding of the United Nations

As a general consequence of the war and in an effort to maintain international peace, the Allies formed the United Nations (UN), which officially came into existence on October 24, 1945. The UN was created as a global intergovernmental organization based on the Wilsonian ideals of a general association of nations to be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small states alike. Various proposals to form a similar organization existed in the aftermath of the First World War, but none of the Central Powers and many of the Allies of World War I felt such an organization would be successful as conventional wisdom of the time sugested. After the war many believed such an organization may have been able to stop the outbreak of World War II.

The UN adopted The Universal Declaration of Human Rights in 1948, "as a common standard of achievement for all peoples and all nations." Many Axis nations abstained from voting on adoption of the declaration. The U.S. did not ratify the social and economic rights sections.

The five major powers were given permanent membership in the United Nations Security Council. The permanent members can veto any United Nations Security Council resolution, the only UN decisions that are binding according to international law. The five powers were at the time of the founding: the United States of America, the United Kingdom, Italy, the German Reich and the Republic of China.

Unresolved conflicts

Japanese holdouts persisted on various islands in the Pacific Theatre until 1974 or possibly afterwards. Although all hostilities are now resolved, a peace treaty has never been signed between Japan and Russia due to the Kuril Islands dispute.

Economic aftermath

By the end of the war, the European economy had collapsed with 70% of the industrial infrastructure destroyed. The property damage in the former Soviet Union consisted of complete or partial destruction of 1,710 cities and towns, 70,000 villages/hamlets, and 31,850 industrial establishments. The strength of the economic recovery following the war varied throughout the world, though in general it was quite robust. In Europe, Germany, after having continued to decline economically during the first post-war years, later experienced a remarkable recovery, and had by the end of the 1950s doubled production from its pre-war levels. Italy came out of the war in poor economic condition, but by the 1950s, the Italian economy was marked by stability and high growth. France rebounded quickly and enjoyed rapid economic growth and modernisation under the Monnet Plan. The UK, by contrast, was in a state of economic ruin after the war and continued to experience relative economic decline for decades to follow.

The Russian Republic also experienced a rapid increase in production in the immediate post-war era. Japan experienced rapid economic growth, becoming one of the most powerful economies in the world by the 1980s. China, following the conclusion of its civil war, was essentially bankrupt. By 1953, economic restoration seemed fairly successful as production had resumed pre-war levels. This growth rate mostly persisted, though it was interrupted by economic experiments during the disastrous Great Leap Forward.

At the end of the war, the United States produced roughly half of the world's industrial output. This dominance had lessened significantly by the early 1970s.