At the February 1945 Yalta Conference, the Allies had agreed to jointly occupy Germany pending the final resolution of a peace treaty. Germany and Berlin, its capital, were divided into four zones to be administered by the four victorious powers. Although the occupied territories were to be treated as a single economic unit, disputes over the disposition of resources surfaced almost immediately. The future of Germany became an immediate subject of debate, with the Soviet Union pressing for the formation of a communist Germany. The first steps in this direction were taken even before the war ended. Walter Ulbricht, a German communist who had spent the war years in the Soviet Union training for this eventuality, led a group of exiles back to Germany with the Red Army. With Soviet support, they placed sympathizers in key posts in the new, superficially democratic administration of the occupied territory. The communists' record of resisting the Nazis allowed them to outmaneuver other political parties permitted in the Soviet zone. The German Social Democratic Party (SPD), however, remained a challenge. Backed by the Soviet military authorities, Ulbricht engineered the merger of the eastern branches of the SPD with the German Communist Party (KPD) in April 1946. The resulting Socialist Unity Party (SED) was under communist control by 1948.
Even though Soviet military authorities allowed the so-called Bloc Parties (the Christian Democratic Union, the Liberal Democratic Party, the Democratic Farmers' Party, and the National Democratic Party) to operate in their zone, the SED had an effective monopoly on power. The mass organizations that were given a place in the new political system (the Free German Trade Unions, the Free German Youth, the German Women's League, and the Cultural League) were also under the SED's firm control. The German communists, with the aid and support of the Soviets, had thus laid the foundations for a single-party state by the time the disputes between the Western powers and the Soviets came to a head in April 1948, in the form of the Berlin Blockade.
The blockade itself was the result of a series of disagreements over the administration of Berlin as well as over the future development of Germany. Both sides used the process of granting incrementally greater authority to Germans and German institutions as leverage in negotiations. The end result was the 1949 creation of two separate German states, the Federal Republic of Germany (FRG, West Germany) and East Germany.
The Western Allies did not immediately recognize the East German state. The West German state, they contended, was not intended as a permanent solution to the German question. By and large, the Western Allies and the new West German government viewed the division of Germany as the result of deliberate Soviet policy and continued to claim the right to represent all Germans. The Soviets, on the other hand, appeared to consider the question closed. They granted East Germany immediate recognition as a sovereign, constitutional state, whereas West Germany was deemed a self-governing Allied Protectorate.
Despite the appointment of Wilhelm Pieck as East Germany's first president, Ulbricht remained the driving force in the government's development. His policies were slavishly Stalinist. Under the slogan of "constructing socialism," he purged the SED, established the infamous Ministry for State Security (Stasi), and introduced a Marxist-Leninist curriculum in the schools. State investment focused on creating heavy industry at the expense of consumer goods, while collectivization was the goal in agriculture. In addition, the East German government continued to make reparations payments to the Soviet Union in the form of goods and capital stock. Poor economic conditions combined with an increasingly totalitarian political structure caused many East Germans to flee the country. The East German government closed its border with the West in May 1952, but the exodus continued, as Berlin remained an open city. On average, more than 175,000 people per year le