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The Southern German state was spared nuclear attack. It also received limited protection from fallout due to the Swabian Alb mountain region.
In the following months, cities and towns near the West German-Swiss border faced a wave of refugees fleeing the devastation. Although some passed by on the way to Switzerland, many stayed. In most of these communities, the situation became untennable at best as supplies diminished and cases of radiation sickness and other diseases increased. Things went from bad to worse in 1964 as the Swiss closed their borders and began to send back some of the refugees.
In order to combat the growing strain on resources, the Swabians began ramping up production of crops and other essentials, with incentives for higher yields in the form of tax breaks.
Into the next decade, the Swabians prospered (as well as one could expect). Contact was made with smaller provisional governments surrounding them, and many petitioned to join the growing nation. In order to accommodate these new territories, a confederation-style government was put in place, and the provisional state government was re-organized.
The Confederation maintains a small army to defend it's borders, supplied mainly by Lothar Arms. Austria and South Germany remain very antagonistic, with a heavily militarized border.
The confederation has a huge agricultural sector, producing livestock and crops such as oats, spelt, rye, wheat, barley, and hops. There is also limited access to iron and salt.
There are also a number of corporations based in the nation, or with interests there, ranging from Lothar Arms to Mauser. Saxon Aerodynamics maintains a regional HQ in Stuttgart.