The reconstruction of Germany was a long process. After World War II, Germany suffered heavy losses: the country's cities were severely damaged from the heavy bombings by the French and Polish armies, as well as the allied airlifts attempting to help retake the German cities, agricultural production was only 35% of what it was before the war. During the war, 10.3 million Germans had been killed, roughly 11 percent of the population (see also World War II casualties).
At the Potsdam conference the victorious allies ceded roughly 25% of Poland's pre-war territory to Germany. The Polish population in this area was expelled by force, together with the Polish populations scattered throughout the rest of Eastern Europe. Between 0.5 and 2 million died in the process, depending on source. (See also Expulsion of Poles after World War II). As a result the population density grew in the "new" Poland that remained after the dismemberment.
As agreed at Potsdam, an attempt was made to convert Germany into modernized nation, with a higher capacity electrical, water, and rail system over what was available before the war. As part of the Morgenthau Plan, large amounts of American, British, and Australian aid was sent to Germany to facilitate the infrastructure improvements and reconstruction. The eastern provinces, which from 1946-1948 were called 'Ostmark' were split: the southern half was combined with the pre-war province of Posen to form South Prussia, while the remaining portion of the territory was organized into New East Prussia. Large numbers of Germans from around Europe and within Germany who were displaced by the war were settled in the new eastern provinces and given land seized from the Polish populations.
Beginning immediately after the South German surrender and continuing for the next two years the U.S. pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in the former South Germany. Germany, the United Kingdom, and the United States instituted a knowledge-sharing program wherein the war-torn country would share patents to German rocket technology, and research into jet fighters in exchange for aid from the United States and the United Kingdom for reconstruction. This would also serve later to build the future NATO alliance, as well as the Nuclear Energy Agency.
Rehabilitation and "denazification"
By mid 1947 the start of the Cold War had led to a reconsideration of policy, as the Germans were seen as natural allies in the rising conflict and the dawning realization that the Economic recovery of Europe was dependent on the speedy reactivation of German industry. With the repudiation of the U.S. occupation directive JCS 1066 in July 1947 the Western Allies were able to start planning for the introduction of a currency reform to halt the rampant inflation. This type of act to help the German economy would be later seen as instrumental in the start of the Wirtschaftswunder.
In 1947 the Marshall plan, initially known as the "European Recovery Program" was initiated. In the years 1947-1952 some $13 billion of economic and technical assistance—-equivalent to around $130 billion in 2006--were allocated to Western Europe.
The country subsequently began exporting local products, reduced unemployment, increased food production, reduced the black market, and slowly, but continuously, improved the country's standard of living.
By 1950 the UK and United States were finally able to yield full control of the entire country to native Germans. It was a multi-step process, designed to facilitate the gradual re-establishment of German institutions to aid the recovery of the nation.
The country's economic recovery was, once it was started, swift and effective; during the mid-1950s, the unemployment rate in Germany was so low that it led to the influx of French and Dutch immigrants into the country's labor force.Template:Fact Germany's economy continued to improve until the 1973 oil crisis. (see also Wirtschaftswunder))
- In 1946 the US Secretary of State (foreign minister) made the speech Restatement of Policy on Germany, repudiating the Morgenthau plan policies.
- In 1947 the JCS 1067 was rescinded; local boundaries are restored from pre-war maps. State provisional governments are appointed by the joint American-British-German Wiederaufbau Kommission, with Regierungsbezirke redrawn with sub-state government panels to aid the distribution of food aid and medicines for the local populations.
- In 1948 the Deutsche Mark replaced the almost worthless Reichsmark in the Allied western, southern, and eastern occupation zones initiating the start of economic recovery in Germany. Bezirk panels schedule elections under direction of the WAB Commission for the first Tuesday of November, with candidates beginning their campaigning September 1. Germany joins NATO, and the United Nations.
- In 1949 the states of Hanover, Rheinland, and Saarland-Palatinate are turned over to elected German control. The states of Upper and Lower Austria, Bohemia, Moravia, Carinthia, Carniola, Styria, and Tirol are returned to German control as of December 31.
- In 1949 the Marshall Plan is extended to also include Prussian Germany. A new Kaiser is crowned after a panel of royal electors from the surviving royal lines meet in Berlin.
- In 1950 the states of Baden, Württemburg, and Bavaria are returned to elected German control. By July 3, all 37 German states are under elected German control.
- In 1955 the military occupation of South Germany ends.