Another issue that caused Cold War tension was the Russian insistence on reparations. In response, the Western powers grew increasingly frustrated and forced the West to take measures which in turn frustrated the Russians. At Yalta, Stalin exacted $20 billion in reparations from Germany, of which half would be given to the USSR. This had to do with the Russian psyche of getting revenge for the destruction of Russia in WWII. They wanted Germany to pay for the damages brought to Russia. Russia was a battlefield during the war and it had suffered much more physical damage than the US and the UK, which were not directly conquered by Germany. These Russian sensitivities were not irrational, just impractical. The Potsdam agreement allowed for reparations to be taken from one’s own zone. But this was to be done with complete centralised accounting, and contradicted the principle of Germany functioning as a single economic unit, which was also agreed at Potsdam as the first-charge principle for “proceeds of exports from current production and stocks shall be made available in the first place... to pay for imports approved by the control council in Germany” (Jackson, 2006). Due to this inherent contradiction in the agreement, the Russians effectively made use of this loophole to take as much reparations as they wanted to and crippled the German economy. The Western powers began to have most of the burden of propping up the German economy, which had not been able to recover as effectively as other West European countries due to the post-war policies of deindustrialisation and reparations. Furthermore, Russians did not strictly adhere to the agreement that Russia was to send foodstuffs from the Soviet zone in exchange for industrial capital and goods and frequently delayed shipments. This caused food shortages in West Germany. Because the East did not contribute to the German economy in terms of agriculture, Britain and America had to import food supplies from the home countries to feed previously industrialised and densely populated West Germany. The implementation of the welfare system in the United Kingdom was draining the British Treasury and this payment for food for the German people caused it to struggle further. In other words, while the Russians was impoverishing East Germany, the West impoverished the Western powers. In May 1946, the Western Allies stopped sending reparations to Russia, citing the long delays of food shipments. This had the effect of officially breaking the agreement agreed on at Potsdam. Then the Cold War intensified, rapidly. In June the same year, the British Foreign Secretary Bevin raised the issue of the trade deficit at the Council of Foreign Ministers meeting. He asked for the implementation of full German economic unity so as to eliminate this burden on the British taxpayer, to which the Soviet Foreign Minister insisted that Russia would continue to extract reparations from the East while not providing food shipments to the West. All these incidents, reactions and re-reactions to the Russian need to see Germany economically crippled worsened relations between the Soviet Union and United States, causing mutual distrust between the wartime Allies.
Furthermore, this economic problem evolved into a political ideology issue which further exposed the opposition between American and Russian ideological interests in Germany, and how the West tried to solve this economic problem caused the Soviets to distrust the West more, deepening Cold War tensions. The British were “desperate for a solution to this impasse” to the problem of paying large sums for food imports. (Grunbacher, 2004) To counter this draining of resources on the Western powers, the US proposed to get rid of the zonal borders which functioned directly as trade barriers. Thus, in December 1946, the Bevin-Byrnes agreement was signed, and the Anglo-American Bizone came into being. This was done primarily due to economic issues described in the previous paragraph and was a way for the US and the UK to decrease some of their economic burden on Germany. This move would increase trade and economically rejuvenate the Combined Economic Area. The Americans, however, also had less altruistic motivations for this move: this increase in economic welfare for the Germans would decrease any possibility of them turning to Communist ideologies. The Americans were particularly fearful after the speech made by Molotov in Paris, in which Molotov attacked what he saw as British imperialism, downplaying Soviet interests in Europe by saying that Russian troops were provided by treaties. If Germans continued to be impoverished in the West, they might turn to the Communist ideology from the Russians, and the Americans sought to avoid this. Also, Bizonia had the effect of limiting Soviet influence in event of unification. In the even that Germany was unified and dominated by Russia, Bizonia would divide the country economically and socially, making it less possible for Russia to wield influence over the Bizone. The establishment of Bizonia gave the Soviets the perception that the United States was trying to exclude the USSR from economic gains, while attempting to dominate West Europe. In the larger picture of the Cold War where the Americans have attempted to interfere into the Soviets’ traditional sphere of influence, in countries like Iran, the Soviets thus might have seen this as a sign of Western aggression against Russian aims of expanding its influence over Europe. This issue of reunification will be discussed later, after key events have been discussed.
The US’s introduction of the Economic Redevelopment Plan (commonly known as the Marshall Plan), proposed in 1947, implemented in 1948, sent a signal to the Russians and the rest of Europe that it was then determined to reconstruct Germany both politically and economically. This was an implementation of the signs that the West had been giving off for some time, after the creation of the Bizone, in contrast to its previous talk of keeping Germany at a lower standard of living than the rest of Europe, not exceeding the average in other European countries, around 74 percent of Germany’s for 1936. The ERP is linked to the attempt of the US to contain communism, and promote democracy, although there are claims that Marshall did not have the Truman doctrine of containment in mind when he formulated the policy. Whether or not the Plan was created with the purpose of communist containment, however, is not an issue. In assessing the deepening of tensions in the Cold War, the perception of whether the Russians thought it as such, and thus as a challenge to their dominance of Europe, is more important in determining how it affected Cold War tension. The Marshall Plan came right after Truman’s declaration of containment policy and was thus likely to be seen by the Russians in that ideological light. Even if this Marshall Plan was created solely for altruistic purposes, using 70 – 90 billion of current US dollars, for the selfinterest-less help of the whole of Europe, the Russians perceived it as a political move to increase the US’s dominance over Europe, and reacted to block the Marshall Plan from East Germany and the rest of Eastern Europe. This point thus tolerates and is strengthened by both revisionist and post-revisionist schools on the Cold War.
In addition, the Russians reacted to the Marshall Plan strongly and increased suspicions on both sides. The Russians’ reaction caused American suspicions about Soviet expansionism to increase, and split Europe into two sides, consolidating the global Cold War. The Soviet Politburo had refused to acknowledge the Marshall Plan. At the London Council meeting in December, Molotov is recounted as being uncooperative; to counter the ERP, he desperately brought to the discussion table the issue of central economic control and German unification. There is a case to be made for the fundamental ideological difference between the US and the Russia and the liberalisation of the economy required of countries receiving aid under the Marshall Plan that provoked such opposition from the communist Soviet government, as this would mean decreasing its power over the countries it influenced in Eastern Europe, notably East Germany, and betraying the communist and state control ideology. Nonetheless, the Soviets’ marked abhorrence of the ERP the Americans offered gave Americans and the British the impression that Russia wanted to purposely stall European recovery, and that this might have bought time for the Russians for its purposes of worldwide expansion of Communism, and this perception more so in American officialdom and public opinion even after the official declaration of the American policy of containment. The Council meeting was ended prematurely by Marshall, who was determined to pass the Marshall Plan regardless of the Soviet Union’s say on it. This premature ending was one of the causes of the creation of the North Atlantic Treaty Organisation, in which Germany was involved, but will not be discussed in this essay. NATO was significant as a marker for the next stage of the war. After the Council meeting, America decided to go ahead with the Plan and arranged a meeting with the parts of Europe that agreed to receive aid from the US. This firmly put East Germany in the Soviet side, while the West was placed with the Western powers. The drawing of sides in Europe had become clear, and this worsened Cold War tension by increasing the separation that the two powers had and increasing mutual distrust of each other’s motives.
The economic problems that Germany faced was a unique problem and whatever solution the West or East moved towards had concomitant effects which affected Cold War tensions in a less than surprising manner. These problems were not purely economic and were interpreted in light of the developing Cold War, where America had officially come down on Communism since the declaration of the Truman doctrine in 1947, which also obligated it to allow for independence for free peoples like in Germany, and Russia which saw American aggression and imperialism in Europe in the post-war era. In December 1947, Russia finally decided to withdraw from the Council of Foreign Relations and in March 1948, Berlin Allied Control Council meetings. This marked a turning point in relations as there was now no more governmental relations between the Russia and the West. This was a culmination of the build-up of suspicions and ill-will that Russia had towards the West due to the tensions caused by the Marshall Plan, Bizone creation, and deindustrialisation, and indicated a descent into full-blown Cold War where the two powers cut off completely any political and social ties with each other. It created a larger separation between the 2 powers and caused even greater mutual suspicion. With this separation between the two powers, they could not iron out issues and misconceptions about each other’s motives, and this accentuated the mutual misunderstanding post-revisionists purport as the main reason for the Cold War.
The culmination of the West’s attempts to solve this economic and political problem of preventing Soviet expansionism, along with the communist threat over Germany was in the formation of the West German state, the Federal Republic of Germany, in 1949, through the merger of the British, American, and French zones. This showed how Cold War tensions, contributed to by the Russian insistence on reparations and deindustrialisation, and the Soviet refusal of the Marshall Plan, had intensified to a state where the West could no longer be under the pretence of quadripartite control any longer. Yet, there had been signs already, since 1945, that the West had been prepared to split Germany up into two. The agreement that the Soviets could only take reparations from its zone could be thus interpreted as a step towards that direction. The creation of Bizonia in 1946 was a preparation for this, in the sense that the borders of Bizonia could be a natural border for the separation of Germany. The West however, then in 1946, did not want to outrightly declare independence for West Germany, leaving a possibility for both sides of Germany to be reconciled. 3 years later, the merger of France’s zone into Bizonia, into the Federal Republic of Germany, was an extension of this attempt to limit the influence that Russia would have over Germany. This move was prompted by the increasing tensions of the Cold War elsewhere and from the build-up of tensions caused by previous conflicts, and provided a confirmation of these tensions while causing existing tensions to increase as well, by showing very clearly to the Soviets that it had an interest in continuing to influence West Germany, and that then, clearly, the West is aligned against the East in the non-military grab for Europe, against Communist ideology at all costs.
Comments: First 2 and half pages very good. After that the essay loses its focus + clarity somewhat. And why does it end here? The whole issue on Berlin is missed out.
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