<P> As a consequence of the defeat of Nazi Germany in World War II, Germany was cut between the two global blocs in the East and West, a period known as the division of Germany . Germany was stripped of its war gains and lost territories in the east to Poland and the Soviet Union . At the end of the war, there were in Germany some eight million foreign displaced persons; mainly forced laborers and prisoners; including around 400,000 from the concentration camp system, survivors from a much larger number who had died from starvation, harsh conditions, murder, or being worked to death . Over 10 million German - speaking refugees arrived in Germany from other countries in Central and Eastern Europe . Some 9 million Germans were POWs, many of whom were kept as forced laborers for several years to provide restitution to the countries Germany had devastated in the war, and some industrial equipment was removed as reparations . </P> <P> The Cold War divided Germany between the Allies in the west and Soviets in the east . Germans had little voice in government until 1949 when two states emerged: </P> <Ul> <Li> Federal Republic of Germany (FRG), commonly known as West Germany, was a parliamentary democracy with a capitalist economic system and free churches and labour unions . </Li> <Li> German Democratic Republic (GDR), commonly known as East Germany, was the smaller Marxist--Leninist socialist republic with its leadership dominated by the Soviet - aligned Socialist Unity Party of Germany (SED) in order to retain it within the Soviet sphere of influence . </Li> </Ul> <Li> Federal Republic of Germany (FRG), commonly known as West Germany, was a parliamentary democracy with a capitalist economic system and free churches and labour unions . </Li>

What was a key difference between east and west germany
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