During the postwar era, the FRG also sought to improve its relationship with the countries of eastern Europe, first establishing trade agreements and, subsequently, diplomatic relations. With unification, German relations with the new democracies in central and eastern Europe intensified. On November 14, 1990, Germany and Poland signed a treaty confirming the Oder-Neisse line. They also concluded a cooperation treaty on June 17, 1991. Germany concluded four treaties with the Soviet Union covering the overall bilateral relationship, economic relations, the withdrawal of Soviet troops from the territory of the former GDR, and German support for those troops. Russia accepted obligations under these treaties as successor to the Soviet Union. Germany continues to be active economically in the states of central and eastern Europe, and to actively support the development of democratic institutions.
Shortly after World War II, Berlin became the seat of the Allied Control Council, which was to have governed Germany as a whole until the conclusion of a peace settlement. In 1948, however, the Soviets refused to participate any longer in the quadripartite administration of Germany. They also refused to continue the joint administration of Berlin and drove the government elected by the people of Berlin out of its seat in the Soviet sector and installed a communist regime in its place. From then until unification, the Western Allies continued to exercise supreme authority--effective only in their sectors--through the Allied Kommandatura. To the degree compatible with the city's special status, however, they turned over control and management of city affairs to the Berlin Senat (executive) and House of Representatives, governing bodies established by constitutional process and chosen by free elections. The Allies and German authorities in the FRG and West Berlin never recognized the communist city regime in East Berlin or GDR authority there.
During the years of Berlin's isolation--176 kilometers (110 mi.) inside the former GDR--the Western Allies encouraged a close relationship between the Government of West Berlin and that of the FRG. Representatives of the city participated as non-voting members in the FRG Parliament; appropriate west German agencies, such as the supreme administrative court, had their permanent seats in the city; and the governing mayor of Berlin took his turn as President of the Bundesrat. In addition, the allies carefully consulted with the FRG and Berlin Governments on foreign policy questions involving unification and the status of Berlin.
Between 1948 and 1990, major events such as fairs and festivals were sponsored in West Berlin, and investment in commerce and industry was encouraged by special concessionary tax legislation. The results of such efforts, combined with effective city administration and the Berliners' energy and spirit, were encouraging. Berlin's morale was sustained, and its industrial production considerably surpassed the prewar level.
The Final Settlement Treaty ended Berlin's special status as a separate area under Four Power control. Under the terms of the treaty between the FRG and the GDR, Berlin became the capital of a unified Germany. The Bundestag voted in June 1991 to make Berlin the seat of government. The Government of Germany asked the allies to maintain a military presence in Berlin until the complete withdrawal of the Western Group of Forces (ex-Soviet) from the territory of the former GDR. The Russian withdrawal was completed August 31, 1994. Ceremonies were held on September 8, 1994, to mark the final departure of Western Allied troops from Berlin.
Government offices have been moving progressively to Berlin, and it became the formal seat of the federal government in 1999. Berlin also is one of the Federal Republic's 16 Laender.
Disputes - international: remaining legal issues (restitution) arising from World War II and its aftermath
Illicit drugs: source of precursor chemicals for South American cocaine processors; transshipment point for and consumer of Southwest Asian heroin, Latin American cocaine, and European-produced synthetic drugs