After the end of World War II, Germany was divided into four occupation zones with areas east of the Oder-Neisse line placed under Polish administration. Although the intent was for the four occupation zones to be temporary, the Cold War intervened and in 1949, the western three zones formed the Federal Republic of Germany while the eastern Russian zone formed the German Democratic Republic. The old capital of Berlin, although in the eastern zone, was itself subdivided into four occupation zones, and as relationships cooled the western portion of the city was surrounded by the Berlin Wall in 1961.
The first proposal for German reunification was advanced by the Russians in 1952 under terms similar to those adopted for Austria. It called for the creation of a neutral Germany with an eastern border on the Oder-Neisse and all allied troops removed within the year. The West German government under Konrad Adenauer favored closer integration with western Europe and asked that the reunification be negotiated with the provision that there be internationally monitored elections throughout Germany. This condition was rejected by the Soviets.
By the mid-1980s, the prospect of German reunification was widely regarded within both Germanies as a distant hope, unattainable as long as communists ruled Eastern Europe. This hope was suddenly placed within reach by political changes within the Soviet Union.
In August 1989, Hungary removed its border restrictions with Austria and in September more than 13,000 East Germans escaped to the West through Hungary. Mass demonstrations against the East Germany regime began in late 1989. Erich Honecker resigned in October, 1989. The travel restrictions for East Germans were removed by the new government on November 9, 1989, and many people immediately went to the Wall where the border guards opened access points and allowed them through.
The cost of reunification has been a heavy burden to the German economy, that can't afford anymore to be the locomotive of the European economy.
The former Communist party of East Germany (SED) is still an important force in those territories with the name of Party of Democratic Socialism (PDS).