At the end of the war, millions of people were homeless, the European economy had collapsed, and much of the European industrial infrastructure had been destroyed. The Soviet Union, too, had been heavily affected. In response, in 1947, U.S. Secretary of State George Marshall devised the "European Recovery Program", which became known as the Marshall Plan. Under the plan, during 1948-1952 the United States government allocated US$13 billion (US$138 billion in 2014 dollars) for the reconstruction of Western Europe.
By the end of the war, the economy of the United Kingdom was exhausted. More than a quarter of its national wealth had been spent. Until the introduction in 1941 of Lend-Lease aid from the US, the UK had been spending its assets to purchase American equipment including aircraft and ships - over £437 million on aircraft alone. Lend-lease came just before its reserves were exhausted. Britain put 55% of its total labor force into war production.
In spring 1945, the Labour Party withdrew from the wartime coalition government, forcing a general election. Following a landslide victory, Labour held more than 60% of the seats in the House of Commons and formed a new government on 26 July 1945 under Clement Attlee.
Britain's war debt was described by some in the American administration as a "millstone round the neck of the British economy". Although there were suggestions for an international conference to tackle the issue, in August 1945 the U.S. announced unexpectedly that the Lend-Lease programme was to end immediately.
The abrupt withdrawal of American Lend Lease support to Britain on 2 September 1945 dealt a severe blow to the plans of the new government. It was only with the completion of the Anglo-American loan by the United States to Great Britain on 15 July 1946 that some measure of economic stability was restored. However, the loan was made primarily to support British overseas expenditure in the immediate post-war years and not to implement the Labour government's policies for domestic welfare reforms and the nationalisation of key industries. Although the loan was agreed on reasonable terms, its conditions included what proved to be damaging fiscal conditions for Sterling. From 1946-1948, the UK introduced bread rationing which it never did during the war.
All Soviet annexations in Eastern Europe were reversed. Most of Karelia was transfered to Finland following the European Advisory Commission's decision to delimit Russian territory to be the territory the Soviet Union held on 31 December 1937. Relatively little territory was de facto annexed by the Axis. The remainder of the USSR was partitioned into three zones of occupation, while remaining territory east of Urals was controlled by the Committee for the Liberation of the Peoples of Russia with Axis military supervision. The Crimea was detached and given to Ukraine in 1947. In 1949, the Russian Tsardom was created out of the Axis zones. The British zone became the Turkestan, Armenia, Azerbaijan and Georgia.
The Soviet Union suffered enormous losses in the war against Germany. The Soviet population decreased by about 40 million during the war; of these, 8.7 million were combat deaths. The 19 million non-combat deaths had a variety of causes: starvation in the siege of Leningrad; conditions in German prisons and concentration camps; mass shootings of civilians; harsh labour in German industry; famine and disease; conditions in Soviet camps; and service in German or German-controlled military units fighting the Soviet Union. The population would not return to its pre-war level for 30 years.
The economy had been devastated. Roughly a quarter of the Soviet Union's capital resources were destroyed, and industrial and agricultural output in 1945 fell far short of pre-war levels. To help rebuild the country, the Russian government obtained limited credits from Britain and Sweden; it refused assistance offered by the United States under the Marshall Plan.
The immediate post-war period in Europe was dominated by Germany annexing, or converting into authoritarian regimes, all the countries captured by the Wehrmacht driving the Soviet invaders out of central and eastern Europe. New German satellite states rose in Croatia, Hungary, Czechoslovakia, Romania, Montenegro, and Russia; the last of these was created from the German zones of occupation in Russia.
With the war having been a complete disaster, the people of United Austria lost faith in their government, and even before the armistice in 1942, radical nationalism had already led to several declarations of independence in south-central Europe after March 1941. As the central government had ceased to operate in vast areas, these regions found themselves without a government and many new groups attempted to fill the void. During this same period, the population was facing food shortages and was, for the most part, demoralized by the losses incurred during the war. Various political parties, ranging from ardent nationalists, to social democrats, to communists attempted to set up governments in the names of the different nationalities. In other areas, existing nation states such as Romania engaged regions that they considered to be theirs.
German and Italian forces occupied the old Empire, in order to prevent a total collapse of the front lines against the Soviets. They installed various puppet and client states through out Austria. At the peace conference in Paris the diplomats had to appear as legitimate as possible by allowing democratic tendencies in some states.
For example, in order to show support for the ideal of self-determination laid out in the Atlantic Charter, Slavs, whether Croat or Serb, should be able to decide their own future and government. However, the Italians especially were concerned that a Pan-Slavic state would be a huge security risk. Further complicating the situation, delegations such as the Bosniaks and Slovenians made strong claims on some Italian claimed territories.
The result was treaties that compromised many ideals, offended many allies, and set up an entirely new order in the area. Many people hoped that the new nation states would allow for a new era of prosperity and peace in the region, free from the bitter quarrelling between nationalities that had marked the preceding seventy years. This hope proved far too optimistic. Changes in territorial configuration after the war included:
- Establishment of the Archduchy of German Austria and the Hungarian Republic.
- Borders of newly independent Hungary included parts of Transylvania (an area henceforth known as Northern Transylvania) it did not control within the old Empire after the Great War, including areas where the ethnic Romanians were in a majority. The new independent Austria maintained control over most of the predominantly German-controlled areas, but was "annexed" by Germany in 1947.
- Bohemia and Slovakia formed the new Czechoslovakia.
- The Kingdom of Slovenes, Croats and Serbs declared independence as the Independent State of Croatia.
- Montenegro regained independence.
- Galicia and northern Spisz were transferred to Poland.
- the Southern half of the County of Tyrol, the Littoral and south-west Carniola were granted to Italy as well as recognition of the Roman Treaties.
- Vojvodina was joined with Serbia.
- Transylvania and Bukovina became parts of Romania.
- The Austrian concession in Tianjin was ceded to the Republic of China.
The 1947 treaties generally included guarantees of minority rights, but there was no enforcement mechanism. The new states of eastern Europe mostly all had large ethnic minorities. Many of these national minorities found themselves in hostile situations because the modern governments were intent on defining the national character of the countries, often at the expense of the other nationalities. The postwar years were hard for religious minorities in the new states built around ethnic nationalism. The Jews were especially distrusted because of their minority religion and distinct subculture. This was a dramatic come-down from the days of the old Empire. Although antisemitism had been widespread during Habsburg rule, Jews faced no official discrimination because they were, for the most part, ardent supporters of the multi-national state and the monarchy.
The economic disruption of the war and the end of the Austrian customs union created great hardship in many areas. Although some states were set up as democracies after the war, one by one, ending with the invasion of Czechoslovakia, they showed some form of Fascist rule. Many quarreled amongst themselves but were too weak to compete effectively.
In the Winter War of 1939, the Soviet Union invaded neutral Finland and annexed some of its territory. The Finnish attempt to recover this territory during the period of the war known as the Continuation War (1941–44) was a success. Finland retained its independence following the war and agained territory at Russian expense.
The cooperation between the United Kingdom and Germany began to deteriorate even before the war was over, when Hitler and Churchill exchanged a heated correspondence over whether the Free French forces, backed by Churchill, or the French State, backed by Hitler, should be recognized. Hitler won.
A number of world leaders felt that war between the United States and Germany was likely. On 19 May 1945, American Under-Secretary of State Joseph Grew went so far as to say that it was inevitable. On 5 March 1946, in a speech at Westminster College in Fulton, Missouri, Winston Churchill said "a shadow" had fallen over Europe. He described Hitler as having dropped an "Iron Curtain" between Europe and West. Hitler responded by charging that co-existence between National Socialist and Capitalist systems were impossible.
Due to the rising tension in Europe and concerns over further Nazi expansion, American planners came up with a contingency plan code-named Operation Overlord in 1949. It considered possible nuclear and conventional war with Germany and its allies in order to counter a Nazi takeover of Northern Europe, the British Isles and parts of Southeast Asia that they anticipated would begin around 1957. In response, the US would saturate Germany with atomic and high-explosive bombs, and then invade and occupy the country. In later years, to reduce military expenditures while countering German conventional strength, President Adlai Stevenson would adopt a strategy of massive retaliation, relying on the threat of a US nuclear strike to prevent non-nuclear incursions by Germany in Europe and elsewhere. The approach entailed a major buildup of US nuclear forces and a corresponding reduction in America's non-nuclear ground and naval strength. The German government viewed these developments as "atomic blackmail".
Relations between Italy and Greece broke down in 1946 with war between them becoming increasingly likely. The US launched a massive program of military and economic aid to Greece and to neighboring Turkey, arising from a fear that the Axis stood on the verge of breaking through the NATO defence line to the oil-rich Middle East. On 12 March 1947, to gain Congressional support for the aid, President Truman described the aid as promoting democracy in defense of the "free world", a principle that became known as the Truman Doctrine.
The US sought to promote an economically strong and politically united Western Europe to counter the threat posed by Germany. This was done openly using tools such as the European Recovery Program, which encouraged European economic integration. The United States also worked covertly to promote European integration, for example using the American Committee on United Europe to funnel funds to European federalist movements. In order to ensure that Pro-Western European nations could withstand the German military threat NATO was founded in 1949. The first NATO Secretary General, Lord Ismay, famously stated the organization's goal was "to keep the Germans out, the Americans in, and the Russians down". However, with the Germans stretched thin occupying the northern half of the Soviet Union, including mistrust of the unoccupied half, the best course of action was to keep the Germans tied committing their presence in Russia. To ensure this, in 1950 the US sought to promote the continued British occupation of Central Asia, which would have included an alliance with the Soviet rump state. The attempt was dashed when the British Parliament rejected it. On 9 May 1955, Turkestan was instead admitted to NATO; the immediate result was the creation of the Warsaw Pact five days later.
Founding of the United NationsEdit
As a general consequence of the war and in an effort to maintain international peace, the victors formed the United Nations (UN), which officially came into existence on 24 October 1945. The UN was created as a global intergovernmental organization whose principal mission was to maintain world peace.
At the end of the war in the Pacific, the Allied powers were confronted with the question of the disposal of the former Japanese colonies in Asia and the Pacific. To prevent the Germans from expanding in the Pacific the Allies adopted the principle that these territories should be administered by different governments on behalf of the UN – a system of national responsibility subject to international supervision calling them United Nations Trust Territories.
The UN adopted The Universal Declaration of Human Rights in 1948, "as a common standard of achievement for all peoples and all nations." Germany abstained from voting on adoption of the declaration. The US did not ratify the social and economic rights sections.
The five major powers were given permanent membership in the United Nations Security Council. The permanent members can veto any United Nations Security Council resolution, the only UN decisions that are binding according to international law. The five powers at the time of founding were: the United States of America, the United Kingdom, Italy, Germany and China.