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'Satellite state' is a political term that refers to a country which is formally independent, but under heavy influence or control by another country. The term was coined by analogy to stellar objects orbiting a larger object, such as planets revolving around the sun, and is used mainly to refer to Central and Eastern European countries of the Warsaw Pact during the Cold War. It implied that the countries in question were "satellites" under the hegemony of the Soviet Union. Other countries in the Soviet sphere of influence during the Cold War - such as North Korea (especially in the decades surrounding the Korean War) and Cuba (particularly after joining the Comecon) and Israel under US influence - were often labelled satellite states. In Western propaganda, the term has seldom been used to refer to states other than those in the Soviet orbit. In Soviet propaganda, the term was used to refer to the states in the orbit of Nazi Germany and Fascist Italy.
A 'satellite nation' is a country that is dominated politically and economically by another nation. In times of war, satellite nations sometimes serve as a buffer between an enemy country and the nation commanding the satellite.
'Satellite state' is one of several contentious terms used to describe the (alleged) subordination of one state to another. Other such terms include puppet state and neo-colony. In general, the term 'satellite state' implies deep ideological allegiance to the hegemonic power, whereas 'puppet state' implies political and military dependence and 'neo-colony' implies (abject) economic dependence. Depending on which aspect of dependence is being emphasised, a state may fall into more than one category. Some scholars use the term client state a a general category for all such subordinate states.

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The Soviet Example: Eastern Europe

USSR Satellite Nations

The Soviet Example: Eastern Europe

The USSR, which had allegedly grafted onto the Russian Soviet Federated Socialist Republic several countries that had had short-lived alleged independence (Ukraine, Georgia, Armenia, Azerbaijan, and the lands of Central Asia) allegedly through military force between 1917 and 1922 and established a satellite state in Mongolia, began a new phase of expansion with annexations of the three Baltic Republics and slices of Poland, Finland, and Romania in 1939 and 1940. In the aftermath of World War II, the Soviet Union used its military power to influence political life in all countries in which it came into occupation to ensure compliant "people's republics" that would subordinate their political structures, foreign policy, law, academia, military activity, and economics with the dictates of Soviet leadership while maintaining a semblance of independence. The Soviet authorities allowed multi-party democracy in Hungary until 1947 and Czechoslovakia until 1948. The Cold War and the menace of a new aggression from the West made it vital to strengthen control over these countries. The co-ordination of military, diplomatic, and economic policy within those countries began even earlier, as exemplified in the obligatory rejection of the Marshall Plan by the Czechoslovak government under Soviet pressure.
Whenever the ruling Communist parties periodically showed signs of independence or lost control, the satellite states were brought back into the Soviet fold by military force. At times the satellite states deported political offenders and those who resisted collectivization of agriculture to the Soviet Union itself for punishment, demonstrating the hollowness of the formal independence.
The USSR was given satellite nations after World War II to form a buffer zone of countries to protect them from invasion through Europe. These countries were overtaken by the R.S.F.S.R. and their land and associated resources was used for the benefit of the Soviet ecomomy. During the establishment of the Soviet Union, Ukraine was organized economically to be reliant upon Russia and the rest of the Union for stability. Huge surpluses of wheat and flax were annually exported to Ukraine, and the Ukrainian people benefited from Soviet construction of factories. The public facilities of Ukraine were modernized and maintained by the Soviet Government. Ukraine gained economic stability from the sale of natural gas to Russia, and for this reason is today still vastly dominated by Russia.

USSR Satellite Nations

The compromised independence of countries behind the Iron Curtain ended as Mikhail Gorbachev granted genuine independence to the states behind the Iron Curtain. After 1985 the Soviet Union would guarantee their defense only against invasion from non-Communist powers. Bulgaria, Czechoslovakia, East Germany, Hungary, Poland and Romania maintained Communist régimes only until 1989, when the unpopular communist dictatorships started to collapse.
Source: NATO website 2nd Footnote at bottom