“But what really gave credence, to Germans and other Europeans alike, to Adenauer’s Westbindung (attachment to the West), was the extraordinary recovery of the West German economy that started around 1950. The Wirtschaftswunder, the German economic miracle, had many causes. Marshall Plan assistance and the linking of the deutschmark to the US dollar was one. The gradual integration of the West German economy into a western European framework was another. Perhaps most important was the US decision to shield the Federal Republic of Germany from the full effect of wartime debt and postwar reparations. The FRG had to pay some reparations, and the dismantling of some German industries and compensatory takeover of patents and technology continued until the early 1950s. But the cumulative burden of excessive debt never came into play. As a result, West Germany was even freer than some of its new Western partners to plan for further expansion as its economy began to grow. The social transformation the Wirtschaftswunder created was one of the biggest stories of postwar Europe. In 1945 all of Germany was a bombed-out disaster zone. Ten years later most people had jobs that paid well enough for their families both to consume and to save. Industries and infrastructure were approaching prewar levels. Housing was being rebuilt at astonishing rates. West German banks had credit available and the country’s currency and interest rates were stable. The West German economy grew by more than 5 percent year on year during the 1950s and ’60s. It was the highest growth rate of any major European economy, more than twice that of Britain, for instance.”

Konrad Adenauer

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