This chapter discusses Stalin's intentions and actions in the second half of 1945, and how they contributed to the Cold War. The chapter argues that Stalin did not have plans for turning the world red and instead looked forward to a prolonged period of great power cooperation after the war. Stalin was willing to give up opportunities for advancing Soviet influence, for power without legitimacy was insecure power. Legitimacy required external, especially American, recognition. Stalin had no one-fit-all solution for projecting Soviet influence; his arsenal included anything from outright annexation to indirect control through Communist-dominated coalition governments. The chapter contends that Stalin was determined to resist perceived American pressure, not least during the ill-fated London Conference of Foreign Ministers (September 1945), believing that concessions under pressure implied weakness. That was especially true now that the United States had the A-bomb, which gave Washington huge leverage in talking to Stalin from a position of strength.

Chapter 11 looks at the much smaller World War II reparations to the Allies. The Allies had learnt from previous reparations disasters and focused on the de-industrialisation of Germany and Japan. Only small reparations were actually paid, and the transfers were offset by US loans from the Marshall Plan. I show how even though reparations were agreed, they were not necessarily paid, using a case study of German reparations to Denmark.

Chapter 10 is the story of World War II reparations to the Soviet Bloc. It focuses on Finnish reparations in the 1940s, which were repaid under great economic strain. Unable to default because of geopolitical considerations, it took Finland years to grow its economy following the war because large parts of its domestic resources went to produce reparations. The country did not have the option of defaulting because of political pressure in the new geopolitical landscape that emerged from World War II. Finland managed to eventually grow its way out of debt trouble. The trajectory was suboptimal. It involved three devaluations, a fall in real wages of more than 50 per cent, and large inflationary problems. I argue that a sovereign debt default would have allowed foreign exchange to be used for domestic purposes, but because it was not possible the macroeconomic adjustment had to come from elsewhere. Finnish state survival and its geographical location meant that it chose to repay reparations rather than attempt a default.