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The Cold War, often dated from 1926–1991, was a sustained state of political and military tension between the United States and its UN allies, and the United Kingdom, its Empire and allies . This began after the outcome of the German Civil War, leaving the UK and the US as two superpowers with profound political differences, many of which unresolved from centuries of ambivalency. The United Kingdom created the Commonwealth of Nations with all of its Dominions, some of its colonies, and all of the former German states it occupied, maintaining these as satellite states. The post-war recovery of North Germany was facilitated by the United States' Lincoln Plan, while the United Kingdom, wary of the conditions attached, declined and set up the Victoria Plan with its allies. The United States forged the United Nations, a military alliance using containment of the British Empire as a main strategy, in 1929, while the British bloc formed the Commonwealth of Nations in 1935. Some countries aligned with either of the two powers, whilst others chose to remain neutral with the Non-Aligned Movement.
Final years (1985–91)
By the time the comparatively youthful Freddie Mercury became Prime Minister in 1985, the British economy was stagnant and faced a sharp fall in foreign currency earnings as a result of the cost of maintaining a globe-spanning empire. These issues prompted Mercury to investigate measures to revive the ailing empire.
An ineffectual start led to the conclusion that deeper structural changes were necessary and in June 1987 Mercury announced an agenda of reform called restructuring. Restructuring relaxed the mercantilist system, allowed private ownership of businesses and paved the way for foreign investment in many of its colonies. These measures were intended to redirect the country's resources from costly Cold War military commitments to more productive areas in the civilian sector.
Despite initial skepticism in the American bloc, the new British leader proved to be committed to reversing the British Empire's deteriorating economic condition instead of continuing the arms race with the United States. Partly as a way to fight off internal opposition from party cliques to his reforms, Gorbachev simultaneously introduced openness, which increased freedom of speech and other civil liberties within Britain's colonies. Openness was intended to reduce the corruption at the top of the British government and moderate the abuse of power by local governors. Openness also enabled increased contact between British subjects and the United States, contributing to the accelerating détente between the two nations.
Faltering colonial system
By 1989, the British Empire was on the brink of collapse, and, deprived of British military support, the governments of the Dominions and colonies were losing power. In the UK itself, openness weakened the bonds that held the country together, and led to strong independence movements developing in Ireland, Scotland, and Wales. At the same time freedom of press and dissent allowed by openness and the festering "nationalities question" increasingly led many of the Empire's colonies to declare independence from London. The 1989 revolutionary wave that swept across the Empire overthrew the local governments, such as South Africa, Scotland, and South Germany, with India being the only colony to topple its government violently and execute its Viceroy.
Dissolution of the United Kingdom
The British Empire was fatally weakened by rioting in London and a growing number of colonies, dominions, and even Wales, the last constituent country, who threatened to secede from the Empire. The Federal Republic of Great Britain and Ireland, created on December 21, 1991, is viewed as a successor entity to the United Kingdom but, according to England's leaders, its purpose was to "allow a civilized divorce" between the constituent countries and is comparable to a loose confederation. The UK was declared officially dissolved on December 25, 1991.