The Potsdam Protocol established the Allied Control Council in Germany by confirming the terms of the agreement that the United States, the Soviet Union, and Great Britain had concluded in the European Advisory Commission on November 14, 1944. The Control Council was assigned duties in the areas of the economy and reparations, and central German administrative departments answered to it as well. Its work was supposed to be governed by certain political principles, but these principles were little more than compromise formulas that were disputed by the powers and, in some cases, contradictory. It remained for the Control Council, therefore, to solve those problems on which the governments had not been able to reach agreement.

When the Control Council held its first organizational meeting on July 30, 1945, a number of preliminary decisions had already been made that proved to be irreversible. First of all, the Soviet Union had obstructed all joint substantive decisions in the European Advisory Commission, with the result that different directives would inevitably be in effect in the respective zones of occupation. Second, at the first meeting of the four commanders in chief on June 5, 1945, the Soviet Union delayed the establishment of the Control Council; by permitting political parties and unions on its own authority on June 10 and by forming central administrative authorities on July 27, it confronted the other Allies with faits accomplis. Third, France almost immediately announced its veto of the centralized German institutional structures already planned. Fourth, the agreement establishing the Control Council (Control Agreement) was marked by a dualism between the zonal commanders and the Control Council. Because of the veto power of the commanders, it was not possible to prevent unilateral action within the zones.