After World War II, Germany and Berlin were divided between Soviet and Allied administered military districts. The Allies allowed the Germans to set up a democratic government in what became known as West Germany while the Soviet imposed a communist government in East Germany. Eventually, so many East Germans escaped into West Germany that the East German government felt compelled to put up a wall to prevent unauthorized border crossings. Although they were the ones who had originally built the wall, it was the
East German government that allowed the wall to be opened again. They did this for a number of reasons including mounting debt, increased pressure to reform, and Gorbachev's rise to power in the Soviet Union.
As East Germany continued to industrialize, it encountered problems similar to those of the Soviet Union. Central planning required that all economic decision be made by the central government, but industrialization had made this an increasingly overwhelming challenge. The central government's inability to make all of the numerous decisions that was required of it in a timely and efficient many led to increasing disruptions in the East German economy. For example, if it took the central government three months for supply a factory with a replacement part that was vital to the operation of the facility, the factory simply had to shut down for three months. In the meantime, everyone who relied on the products produced in that factory might find it might then find their own production disrupted, again for lack of necessary parts.
The East German government, along with many governments in the Soviet Bloc proposed to solve this problem by borrowing money from the West. They believed that additional money would allow them to make much needed investments in the infrastructure that would make it easier to centrally plan the economy. It just so happened that about that time Western banks had a lot of money to loan. Many Arab countries had made billions during the Arab oil embargo and they had put this money in Western banks. These banks needed somewhere to invest that money, so they approved loans to governments in the Soviet bloc.
Unfortunately, the extra money did not help. The East German government proved just as inefficient as it had before it had acquired a massive debt, and they had no increased capacity to pay back the Western banks they had borrowed from. As a result, they had to squeeze the money out of their people by imposing rationing and a series of "austerity measures." Obviously, this embittered the people of East Germany towards their government and made them long for something better.
At the same time, a new leader came to the Soviet Union. Mikhail Gorbachev was much more reformist than any of his predecessors. Among his reforms, he said that all of the countries in the Soviet bloc could have their own path to socialism. What this meant was that the Soviet Union would allow the people of those countries to reform and the Soviet Union would not do anything to stop them. Immediately, many of the eastern countries tore down their border fortifications.
East German citizens now had a path through Hungary that they use to reach free Austria. From Austria, they could obtain transportation to West Germany or any other Western countries. Thousands of East German refuges escaped oppression in East Germany using this route and thousands more escaped later through Czechoslovakia. At the same time, thousands of East German protesters demonstrated against the government. The East German government knew that they had to do something, so in a desperate attempt to preserve their country, they opened up travel to West Germany and West Berlin.
On November 9th, 1989 the East German government announced that East Germans could travel to West Germany if they wished. Immediately, thousands of East Germans flocked to the walls and pushed their way through the border crossings where at least 70 had died over the years trying to escape. The border guards did not know what to do, but they saw they were powerless against such a mass of people. So began one of the most joyous celebrations in history when people from East Germany and West Germany could see each other anytime they wanted. In trying to maintain the integrity of East Germany, the East German government sealed its fate. A little more than a year later, the two parts of the country were officially reunited.
