Reconstruction of Germany The reconstruction of Germany was a long process . After World War II , Germany had suffered heavy losses , both in lives and industrial power . 7 . 5 million Germans had been killed , roughly 11 percent of the population ( see also World War II casualties ) . The country ' s cities were severely damaged from heavy bombing in the closing chapters of the War and agricultural production was only 35 percent of what it was before the war . At the Potsdam conference , the victorious Allies ceded roughly 25 percent of Germany ' s pre - Anschluss territory to Poland and the Soviet Union . The German population in this area was expelled by force , together with the Germans of the Sudetenland and the German populations scattered throughout the rest of Eastern Europe . Between 0 . 5 and 2 million are said to have died in the process , depending on source . ( See also Expulsion of Germans after World War II ) . As a result , the population density grew in the " new " Germany that remained after the dismemberment . As agreed at Potsdam , an attempt was made to convert Germany into a pastoral and agricultural nation , allowed only light industry . Many factories were dismantled as reparations or were simply destroyed ( see also the Morgenthau Plan ) . Due to these policies , large numbers of German civilians died in the years following the unconditional surrender in what would eventually become West Germany . Millions of German prisoners of war were for several years used as forced labor , both by the Western Allies and the Soviet Union . Beginning immediately after the German surrender and continuing for the next two years , the United States pursued a vigorous program to harvest all technological and scientific know - how , as well as all patents in Germany . John Gimbel comes to the conclusion in his book , " Science Technology and Reparations : Exploitation and Plunder in Post - war Germany " , that the " intellectual reparations " taken by the U . S . and the UK amounted to close to 10 billion dollars , equivalent to around 100 billion dollars in 2006 ( Ref : Norman M . Naimark The Russians in Germany pg . 206 ) ( see also Operation paperclip ) . Rehabilitation and " denazification " . As soon as 1945 , the Allied forces worked heavily on removing Nazi symbolism from Germany in a process dubbed as " denazification . " By mid - 1947 , the start of the Cold War had led to a re - consideration of policy , as the Germans were seen as possible allies in the conflict and the dawning realization that the economic recovery of Europe was dependent on the reactivation of German industry . With the repudiation of the U . S . occupation directive JCS 1067 in July 1947 , the Western Allies were able to start planning for the introduction of a currency reform to halt the rampant inflation . This type of action to help the German economy had been prohibited by the directive and its execution also led to the eventual division of Germany . ( see also Berlin Blockade ) In 1948 , the Deutsche Mark replaced the occupation currency as the currency of the Western occupation zones , leading to their eventual economic recovery . 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 . Despite protests from many beneficiaries , the Marshall Plan , although in the less generous form of loans , was in 1949 extended to also include the newly formed West Germany . In the years 1949 - 1952 , West Germany received loans which totaled $ 1 . 45 billion , equivalent to around $ 14 . 5 billion in 2006 . The country subsequently began a slow but continuous improvement of its standard of living , with the export of local products , a reduction in unemployment , increased food production , and a reduced black market By 1950 , the UK and France were finally forced to stop the dismantling of German heavy industry . . The country ' s economic recovery was , once it was permitted , swift and effective . During the mid - 1950s , the unemployment rate in Germany was so low that it led to the influx of Turkish immigrants into the country ' s labor force . Germany ' s economy continued to improve until the 1973 oil crisis . ( see also Wirtschaftswunder )