Having achieved victory in Europe, Germany annexes Eastern Europe and most of the western Soviet Union into the Greater German Reich. Following the signing of the Treaty of Rome, Western Europe and Scandinavia are corralled into a pro-German trading bloc, the European Community.
The surviving areas of the Soviet Union, still led by Stalin, wage an endless guerrilla war with German forces in the Ural Mountains. Mounting casualties (at least 100,000 since 1960, according to the novel) have sapped the German military, despite Hitler's earlier statement (quoted in the novel) about a perpetual war to keep the German people on their toes. The novel describes dead German soldiers being returned to Germany in the middle of the night, and German citizens being encouraged to make ever-larger contributions to Winterhilfswerk.
By 1964, the United States and the Greater German Reich are caught in a Cold War and an arms race to develop more sophisticated nuclear weapons and space technology. It is suggested that German boasts about being ahead of the Americans in the Space Race are justified.