West Berlin was a political enclave which comprised the western part of Berlin from 1948 until 1990, during the Cold War. Although West Berlin lacked any sovereignty and was under military occupation until German reunification in 1990, the territory was claimed by the Federal Republic of Germany (FRG), despite being entirely surrounded by East Germany (GDR). The legality of this claim was contested by the Soviet Union and other Eastern Bloc countries. However, West Berlin de facto aligned itself politically with the FRG from May 1949 and was thereafter treated as a de facto city-state of that country. After 1949, it was directly or indirectly represented in the institutions of the FRG, and most of its residents were citizens of the FRG.

East Germany, officially known as the German Democratic Republic, was a country in Central Europe from its formation on 7 October 1949 until its reunification with West Germany on 3 October 1990. Until 1989, it was generally viewed as a communist state and described itself as a socialist "workers' and peasants' state". The economy of this country was centrally planned and state-owned. Although the GDR had to pay substantial war reparations to the Soviets, it became the most successful economy in the Eastern Bloc.