Iron Curtain: the Crushing of Eastern Europe, 1944-56 By Anne Applebaum

Once, during a long drunken evening, I had an argument with a Russian journalist. He insisted that, at the end of the Second World War, the Soviet Union had liberated Eastern Europe. I said that the Soviet Union had occupied it. The argument raged for some hours, included a rotating cast of passers-by, and never reached a satisfactory conclusion.

That debate returned to me while I was reading Anne Applebaum's Iron Curtain. Applebaum's previous book, Gulag, chronicled how the Soviet government rounded up, jailed and crushed its own people, traumatising them for generations. It was justly celebrated, winning among other prizes a Pulitzer.

Iron Curtain deserves as much praise as its predecessor. It is not a sequel chronologically speaking, since Gulag traced the impact of Joseph Stalin's camps to the present day. But it takes the same theme – the destruction of society and imposition of Soviet dictatorship – and expands it to Eastern Europe. Applebaum starts her story – which focuses on East Germany, Hungary and Poland – with the Red Army's arrival in Eastern Europe in 1944. The tale is, by turns, upsetting, depressing and uplifting, as we see how humans reacted to the pressures put on them by forces completely outside their control.The distinction between whether the Soviet soldiers liberated or occupied the citizens of what became the Eastern bloc is a crucial one. At first they were themselves unsure. On their arrival in Poland, they initially co-operated with the Home Army, the underground force that had battled the Germans since 1939. Poles could speak Polish in public for the first time in years. The Soviets opened the gates of Auschwitz-Birkenau, and gave freedom to the few Jews who had survived the war.

But disillusionment set in fast. The Red Army re-opened camps at Auschwitz and Buchenwald almost as soon as they closed them, to house their own undesirables. Soviet troops gang-raped almost any women they came across, not just Germans but Poles and Hungarians. Astonished by the relative wealth – even after total war – of the lands they were conquering, they stole anything they could carry. Watches became a craze and the famous picture of the Soviet flag waved from the Reichstag had to be "touched up" to remove the watches on the soldier's arm.

Over the next five years, Soviet power gradually erased any pretence of democracy in its satellites, slicing away at civil society and political parties until nothing was left but the Communists led by each country's own "little Stalin". Even the Poles quailed before the ruthlessness of Stalin's NKVD.

And many Eastern Europeans did not want to resist. They wanted the war to be over and to go back to normal lives. Applebaum evokes the compromises and choices that ordinary people made when faced with extraordinary events. She tells the stories of artists who just wanted to work, but could not buy paint or brushes unless they followed the party line. The same went for poets or musicians. If her book has a fault, it is here. Forced to rely on interviews conducted after 1989, she is unable to assess the truth of collaborators' self-justification.

But that is the most minor of flaws and it is alien to the spirit of the book, which allows the reader to judge the characters of the participants for themselves. At first, the Communist functionaries in the main do not come across as bad people. They genuinely believed they were there to free the working class from exploitation, and thought ordinary people would welcome them. Disillusionment set in fast for them too. The Poles learned their lesson in 1946, when a decisive majority rejected a Communist-backed referendum. The government, baffled, was forced to conclude that its citizens had acted in "some kind of incomprehensible spirit of resistance and complete ignorance" and so falsified the result. Welcome to a People's Democracy.

The Hungarians learned hardest of all, when they responded to Nikita Khrushchev's criticism of Stalin by criticising Stalin too. In 12 days of "euphoria and chaos" in 1956 they pulled red stars from buildings, felled a statue of the dictator, took over factories, deserted the army and showed their disgust for what had been done to them. Khrushchev sent in the tanks. In the aftermath, 341 people were hanged and 26,000 people jailed. That was the moment when the question I debated with my Russian journalist friend was answered: the Soviet Union was occupying Eastern Europe. Applebaum's excellent book tells with sympathy and sensitivity how unlucky Eastern Europe was: to be liberated from the Nazi dictatorship by the only regime that could rival it for inhumanity.

Oliver Bullough is the author of 'Let Our Fame be Great: journeys among the defiant people of the Caucasus' (Penguin)