Germany's economy was devastated by World War 2: 1) The nation was financially destroyed due to massive spending on the war machine and the failure of Operation Barbarossa against the Soviet Union. 2) After the war, Germany was divided into East and West with East Germany under communist control and West Germany receiving aid through the Marshall Plan. 3) It took years for the German economy to recover as the nation dealt with inflation, reparations, and the return of prisoners of war, but economic reforms eventually led to a period of strong growth known as the "Economic Miracle".

1. Impact of world war II on
German Economy

2. Germany during WWII
• In 1940, Germany invades Denmark, Norway (to protect
neutrality against Allies, capitalize on their resources, sea
access for U-boat attacks)
• Germany then proceeds to invade France in 1940 as well,
controlling the entire nation (the north by direct occupation,
and the south via a puppet regime)
• Began exterminating Jews and other “undesirables” en masse
in 1940

3. Countries invaded by Germany during
WWII
Germany
Bulgaria
Greece
Yugoslavia
France

4. Invasion of SOVIET UNION,
June 1941
Adolf Hitler had always regarded the German-Soviet non
aggression plan, signed on August 23, 1939, as a temporary
tactical maneuver. In July 1940, just weeks after the German
conquest of France and low countries, Hitler decided to attack
the Soviet Union within the following year. On December 18,
1940, he signed Directive 21 (code-named Operation
"Barbarossa"), the first operational order for the invasion of the
Soviet Union.

5. Chain of action
July 1940
• Conquest of
France
June 22, 1941
• Invasion for
USSR
commenced
October 15,
1941
• Final
solution :
annihilation
of the
European
Jews
December 6,
1941
• Russians
launched a
major
counter
attack on
the
Germans
End of
December
• RED ARMY
finally
eliminated
the threat
pose to
Moscow by
sabotaging
the entire
german
forces

6. After WWII
• Germany was utterly devastated
• Allied fighter jets carpet bombed cities, killing many
• The nation was financially destroyed, due to the Nazi's
desperate spending to feed the war machine, even down to
the final days
• The nation was also disgraced due to the atrocities carried
out, especially the Holocaust
• BARBAROSSA had failed

7. War Casualties
20%
7%
73%
Total Deaths
Military Deaths
Civilian Deaths
Jewish Holocaust
Deaths

8. Division of Germany

9. Aftermath
East Germany
• It was given to Russia
• Greatly effected by
communism
• Life was much harder there
were much more laws to
follow. Easterners wanted to
move to the west because of
harsh laws
West Germany
• It was given to U.S., France
and Britain
• Implementation of Marshall
plan by the united states
• Western Germany was
capitalist and people had more
rights and an easier life

10. Process of “denazification”
• As soon as 1945, the Allied forces worked heavily on
removing Nazi symbolism from Germany
• 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
• In 1948, the Deutsche Mark replaced the occupation currency as
the currency of the Western occupation zones, leading to their eventual
economic recovery.
• By 1950, the UK and France were finally forced to stop the dismantling of
German heavy industry

11. Economic condition in Post –World
War II
• The first several years after World War II were years of bitter penury
for the Germans. Seven million forced laborers left for their own
land, but about 14 million Germans came in from the East, living for
years in dismal camps. It took nearly a decade for all the German
POWs to return
• High inflation made savings (and debts) lose 99% of their
value, while the black market distorted the economy
• The Soviets extracted about 23% of the East German GNP for
reparations, while in the West reparations were a minor factor

12. Economic Miracle
• The economic reforms and the new West German system received powerful
support from a number of sources: investment funds under the European
Recovery Program, more commonly known as the Marshall Plan
• In 1957 West Germany gained a new central bank, the Deutsche
Bundesbank, generally called simply the Bundesbank, which succeeded the
Bank Deutscher Länder and was given much more authority over monetary
policy. That year also saw the establishment of the Bundeskartellamt (Federal
Cartel Office), designed to prevent the return of German monopolies and
cartels
• In 1967 the Bundestag passed the Law for Promoting Stability and
Growth, known as the Magna Carta of medium-term economic management

13. Growth Scenario

14. Presentation made by
• K.U.SANDEEP KUMAR