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 dollars, 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)
Read more about this topic: Reconstruction Of Germany