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The U.S., British and French zones became capitalist and democratic, which formed into the Federal Republic of Germany (and West Berlin) in 1949. The Soviet zone became a communist dictatorship, which in turn formed the German Democratic Republic (including East Berlin) the same year.
Divergence of German states
From 1948 onwards, West Germany developed into a western capitalist country with a social market economy and a democratic Allies while the communist Soviet Union argued over how to govern Berlin. Berlin was in the Soviet part of Germany, an island surrounded by capitalism. Western nations assumed they would have free access to the city...
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