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World War II and onset of the Cold War

Russia ended its participation in the First World War in March 1918 and lost territory, as the Baltic countries and Poland became independent. The region was the main battlefield in the Second World War (1939–45), with German and Soviet armies sweeping back and forth, with millions of Jews and others killed by the Nazis in the Generalplan Ost, and millions of others killed by disease, starvation, and military action, or executed after being deemed as politically dangerous. During the final stages of World War II the future of Eastern Europe was decided by the overwhelming power of the Soviet Red Army, as it swept the Germans aside. It did not reach Yugoslavia and Albania, however. Finland was free but forced to be neutral in the upcoming Cold War.

Throughout Eastern Europe, German-speaking populations were expelled to the reduced borders of Germany in one of the largest ethnic cleansing operations in history. Regions where Germans had formed the local population majority were re-settled with Polish- or Czech-speakers.

The region fell to Soviet control and Communist governments were imposed. Yugoslavia, Albania (and later Romania) had their own Communist regimes independent of Moscow. The Eastern Bloc at the onset of the Cold War in 1947 was far behind the Western European countries in economic rebuilding and economic progress. Winston Churchill, in his well-known "Sinews of Peace" address of 5 March 1946, at Westminster College in Fulton, Missouri, stressed the geopolitical impact of the "iron curtain":

From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe: Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest, and Sofia.