Secondly, in response to communist revolutions in Greece and Turkey in March of 1947, President Harry Truman announced that America now promised to “support free people who are resisting attempted subjugation by armed minorities or by outside pressures (with U.S. military aid).” This policy meant that America was prepared to send money, equipment and advice to any country which America considered to be under threat from a Communist takeover. The Marshall Plan, to a certain extent, was the economic extension of the Truman Doctrine. At the end of World War II, starvation and economic crisis threatened to overtake many European nations. In a rare move, the Allied victors took it upon themselves to prevent an economic crisis by helping to rebuild the most devastated areas as quickly as possible. However, the American government also thought that a strong German economy was vital for the growth of a non-communist Western Europe. The Western Allies believed that the Soviet Union was scheming to set up a central German government that would be Communist-controlled.
Thirdly, in order to address the issue of post-war European recovery and reconstruction, the U.S., Great Britain and France held a series of discussions in London from February through June of 1948 known collectively as the London Conferences. The result of these discussions was the London Program, the main goal of which was to establish a West German government through a combination of the three western occupation zones and currency reform. Therefore British and American zones were joined, followed by the French zone in June 1948 to form one Western zone and a single economic unit. Stalin watched these events with mistrust. In mid-June, the West issued a new currency in their merged zones (although they did not extend it to their zones in Berlin), and the Soviet Union issued a new currency in its zone. The Soviets were threatened by the new currency instituted by the Western Allies, both because the USSR would have no control over it and because it signalled a strengthened West Germany. The USSR, which had been invaded twice by Germany, found the idea of a stronger West Germany particularly alarming. As a result, the Soviets responded by installing a separate new currency in East Berlin just a day later. In a further attempt to stifle economic regeneration, the Soviets imposed a partial blockade of West Berlin in April 1948. On June 20th 1948, the West introduced their new currency into Berlin. In response, the Soviet Union stepped up to a full blockade the very next day, cutting off all land and rail routes into the merged sectors.
The Berlin Blockade alarmed people and governments in the U.S.A. and Western Europe and there were to be consequences. Firstly, the North Atlantic Treaty Organisation (N.A.T.O.) came into being in 1949 as a result of the Berlin Crisis. It was formed in Washington between the U.S.A., Canada and ten Western European countries because America was convinced that a new military alliance was needed. This agreement between nations stated that each country would give each other military aid in the event of armed aggression. All members agreed to regard an attack on any one of them as an attack on them all and all agreed to place their defence forces under a joint N.A.T.O. command, which would co-ordinate the defence of the West. Also in 1949, the three western zones in Germany were united to become the Federal Republic of Germany. Bonn became its capital city and Dr Konrad Adenauer became its first Chancellor.
The failure of the Berlin blockade had far-reaching effects on Russia and the Communist countries of Eastern Europe. The Russian zone in Germany became the German Democratic Republic led by a communist, Walter Ulbricht. In response to West Germany joining N.A.T.O., the Russians formed the Warsaw Pact. This was also a military treaty in which the Communist countries of Eastern Europe (and later China) all agreed to help each other – and the Soviet Union – in the event of armed attack from the West.
Later, in 1954, the West formed the South East Asia Treaty Organisation (S.E.A.T.O.) which was aimed at preventing attacks by communists, and also in 1959, they formed the Central Treaty Organisation (C.E.N.T.O.) helping prevent the spread of communism in the Middle East.
So after the Berlin crisis, East-West relations entered a deadly new phase. On the one hand, the Soviet Union had exploded their first atom bomb late in 1949 (much sooner than the West had expected) and 350 000 American troops still remained in Western Europe. The whole world was now divided and was on the brink of a nuclear war.