Under the NES, the task of establishing future economic development was assigned to central planning. Decentralization involved the partial transfer of decision-making authority from the central State Planning Commission and National Economic Council to the Associations of People's Enterprises ( Vereinigungen Volkseigener Betriebe —VVB--), parent organizations intended to promote specialization within the same areas of production. The central planning authorities set overall production goals, but each VVB determined its own internal financing, utilization of technology, and allocation of manpower and resources. As intermediary bodies, the VVBs also functioned to synthesize information and recommendations from the VEBs. The NES stipulated that production decisions be made on the basis of profitability, that salaries reflect performance, and that prices respond to supply and demand.
As West Germany was reorganised and gained independence from its occupiers, the German Democratic Republic was established in East Germany in 1949. The creation of the two states solidified the 1945 division of Germany.  On 10 March 1952, (in what would become known as the " Stalin Note ") Stalin put forth a proposal to reunify Germany with a policy of neutrality, with no conditions on economic policies and with guarantees for "the rights of man and basic freedoms, including freedom of speech, press, religious persuasion, political conviction, and assembly" and free activity of democratic parties and organizations.  This was turned down; reunification was not a priority for the leadership of West Germany, and the NATO powers declined the proposal, asserting that Germany should be able to join NATO and that such a negotiation with the Soviet Union would be seen as a capitulation. There have been several debates about whether a real chance for reunification had been missed in 1952.