A new film, The Sound of Heimat, examines the revival of folk music in Germany.
German folk songs (Volkslieder) reached the height of their popularity in the Romantic/nationalist movement of the eighteenth and nineteenth century. In the twentieth century though their association with Nazism meant that singing them was officially discouraged in both East and West Germany after 1945. About the only place they were still sung was amongst the German diaspora in South America and southern Africa.
There's an interesting article about German folk music here.