With the Marshall Plan never becoming a reality, would the Morgenthau plan (or a less extreme modified version) be put into place? Would Germany just be denied any aid and left in ruins? What would be the Soviet policy in the East?
 
If I understand correctly, there is warmer relations between the winning powers post war? Theoretically, it could be done if the war were to last longer, let’s say, you have a combined Soviet and American front in China. Under different leadership, the Americans returning from the Pacific would have a much higher opinion of the Soviets. Same in Europe. Should this be the case, you could see the Neutral Germany plan proposed in the Stalin Note. You could see a Germany that never signs the treaty with Poland about Prussia.
 
It is divided, but America and the USSR stay allies or at least don't actively oppose each other.
Problem is, communist dictatorships and capitalist democracies tend to be diametrically opposed to one another. The only way to 'be friends' is for the Soviet communiststs to be overthrown and the country becomes a sort of democracy, or a communist revolution in USA turns that country into a dictatorship == or both countries 'find a third way' and become more like China (non-democratic but 'light handed' dictatorship with elements of both communism and capitalism) ...
 
If there's no geopolitical struggle between the east and west, Germany might get more chopped up.

OTL the Bavarian independence movement was opposed by the Western Allies partially because of a desire for a West Germany that could be part of an integrated west which could stand up to the east. Even if East and West Germany are tough to keep separate over time, an independent Bavaria could be in the cards.

Maybe a South Baden separatism could occur too?
 
There was the option of a "Finlandised" Germany, disarmed and neutral, between the two power blocs.

I'm not sure how realistic this was but it was proposed, I think, in 1952 as a way forward by which time it was completely impractical.

The Soviet line during WW2 was it wanted any post-war German state to be de-militarised and perhaps de-industrialised and certainly incapable of ever waging aggressive war on the peoples of Europe. That wasn't an unrealistic premise and indeed the French and some other western European countries could well have supported a policy of part-punishment part-humiliation part-castration of the future Germany.

In other words, the mistake of Versailles was to leave the Germans not with too little but with too much. The physical occupation of the interior of Germany was part of the solution along with some limited territorial seizures but in essence enough to leave the German people with a German state but one founded not on Prussian militarism but on the experience of humiliation and occupation.

Could this have been "sold" by 1945? We'd have needed what didn't really happen - a proper Versailles-style conference in 1946 - and a more reasonable atmosphere between Washington, Moscow and London. From the western side, a recognition of legitimate Russian security and defence concerns so the eastern European states, if not directly under Moscow's control then acting in accordance with Moscow's interests. In the west, France and Italy in the western bloc but a joint US-Soviet commitment to pull back from Germany, Austria and elsewhere by 1950.

So, no NATO, no Warsaw Pact and no 4-power occupation of Berlin. In 1950, the new German Republic is founded but its constitution makes provision only for a small self-defence force with no Navy or attack aircraft. The French to occupy the west bank of the Rhine and Poland to occupy East Prussia but the rest of the state to remain whole. The new constitution would also limit industrial production and commit the state to a wholly non-aligned path.

Thus you have Finland, Germany, Austria and Yugoslavia as a neutral "barrier" through Europe, Russian troops are withdrawn to Russia and American troops to Britain to ensure some degree of military parity but tensions are a lot less in this timeline.
 
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