Post-War Economy

• Soviets took 3x amount of reparations agreed at Potsdam.
• Soviet productive capacity reduced to 50% of 1939.
• Soviets pursued nationalisation. Private banks took over by state banking, 25 soviet SAGs formed, joining 213 firms and expropriated Nazi businesses were turned into VEBs.
• By 1948, VEBs and SAGs controlled 60% of industry, private sector were forced out through harsh tax policies.
• September 1945, 7,000 large junker estates were seized.
• They set up a planning commission to coordinate economic policy and supervise SAGs and VEBs.
• Level-of-Industry Plan (1946): standard of living kept to 1932 levels, industrial capacity should be half 1938 level, limits on industry output and war related industry banned.
• USA said they should only pay reparations one self-sufficient.
• Bizonia could grow under Marshall Aid, production targets raised, rationalisation was undertaken.
• Trizonia grew due to alliance and new Deutschmark. Economy grew 30% March-August 1948.