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In July 1945, the three victorious Allies decided in Potsdam to form a joint body which would solve problems concerning Germany as a whole. This Council, which later included the French, met in Berlin and was headed by the four allied commanders-in-chief. Almost from the start, it had trouble agreeing on any central administrative measures or institutions. The French representative informed the others that his government could not agree at this time to one important goal that the three war-time Allies had set at the Potsdam Conference — i.e., to create eventually a central German government. Because of the French objection, certain central administrative agencies envisioned in the Potsdam Agreement, such as the one planned for transportation and finance, were not formed. If we can regard this failure to form common German institutions as the first stumbling block to the unification of the four zones, a second, weightier one soon emerged. The Soviet Union proceeded quickly to shape the political institutions, industrial economy, and agriculture of its zone according to Communist principles, resulting in profound changes. By this time there could no longer be any illusion that the Soviet Union would let its zone be ruled according to Western democratic principles. Consequently, a unified German government no longer seemed a realistic prospect, at least in the short term. At the same time, the Soviet Union forced its Marxist-Leninist interpretation of democracy on the Eastern European countries. It pressured Poland, Rumania, Bulgaria, and in 1948 Czechoslovakia to set up Communist governments. Soviet military strength made sure that any serious opposition was futile. On March 5, 1946, Winston Churchill made his famous speech in Fulton, Missouri, in which he declared: “An Iron Curtain has descended across the Continent.”

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The rising tensions at the onset of the Cold War made it unlikely that the Germans would be granted the right to form a central government in the foreseeable future and to live again in a united country. Those Germans who had the misfortune of living in the area occupied by the Soviet Union felt increasingly isolated, and many East Germans fled to the western zones. For those Germans, however, who lived in the three western zones, the rising tensions between the Western Allies and the Soviets held the promise of improved living conditions and more political autonomy. Americans in particular began to look upon “their” Germans in a new light. They wanted to make sure that living conditions improved in the western zones so that the population would resist Communist influence. Secretary of State James F. Byrnes signaled in a speech in Stuttgart on September 6, 1946, that from now on the United States’ policy towards Germany would be more conciliatory. The United States and Great Britain combined their zones into one zone, which was created on January 1, 1947. The declared purpose was the improvement of economic planning, but actually it was also to serve as the seed for a central West German government. France hesitated because it tried at the time to annex the Saarland economically and even politically and believed that the creation of any kind of central German government would hinder this endeavor. (In 1955, the people in the Saarland made it clear in a plebiscite that they wanted union with Germany, and the territory was joined to West Germany as a new state or Land in 1957.) But with the Communist coup in Czechoslovakia in 1948, the French joined their zone to the American and British zone in February 1948, thus uniting the three Western zones economically and setting the stage for political union the following year.