In 1949, the International Authority for the Ruhr was imposed on the (West) Germans as a pre-condition for permitting them to establish the Federal Republic of Germany. By controlling the production and distribution of coal and steel (i.e., how much coal and steel the Germans themselves would get), the International Authority for the Ruhr (IAR) in effect controlled the entire West German economy, much to the dismay of the Germans. Ludwig Erhard called the statute a "tragic error", which would have the consequence that "the living standards of the German people would no longer depend on German efforts, diligence and social policies, but would rather be in the hands of the competitors to German industry".