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By David Williamson

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Key question Key date Why could the occupying powers not agree on the reparation question? General Clay halted reparation payments from the Soviet zone: 3 May 1946 Key question Key term Key dates Why was Bizonia formed? Paris Conference of Foreign Ministers: April–July 1946 Anglo-US Bizonia formed: 1 January 1947 Trade surplus A surplus of exports over imports. The problem of reparations By the spring of 1946 the compromise over reparations, which had been negotiated in Potsdam, was already breaking down.

The Soviets had already begun to strip their zone of industrial plant and raw materials, but the British and Americans were convinced that the German economy must be left sufficiently strong to pay for imported food and raw materials, and were not ready to subsidise the Soviet zone. The British were particularly concerned because they had the highest population density within their zone, which would starve unless food was imported. A compromise was negotiated whereby both the USSR and the Western powers would take reparations from their own zones.

Failure was only avoided by ambiguous compromises on all the most difficult issues. While Britain, the USA and USSR could agree on the necessary measures for German demilitarisation, denazification and the punishment of war criminals, they were only able to draw up the following minimal political and economic guidelines for the future of Germany: Key terms The Break-up of the Grand Alliance 1945–7 | 39 Reparations Materials, equipment or money taken from a defeated power to make good the damage of war.

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