How did Germany manage to go from a completely destroyed country to the strongest economic power in Europe and top 5 in the World

There was a combination of factors that enabled Germany to rebuild its economy after World War 2.

The number one reason for Germany's recovery; taken for granted by many Germans was the U.S. MARSHALL PLAN.

The Marshall Plan was a U.S. initiative to provide aid to mainly Western Europe. The United States gave over $12 billion (current value $100 billion in 2017 US dollars) for Western Europe to rebuild their economies after World War II. Part of the plan was the removal of trade barriers to facilitate German exports to the United States.

As the Cold war intensified during the 50's and 60's, the United States subsidized West Germany’s defense against the USSR by guaranteeing their security. This freed up much need capital and resources for Germany to rebuild its infrastructure. West Germany, U.K., and France got the bulk of the aid.

Secondly, was “the London Agreement on German External Debts” signed in February, and implementation started in September 1953. Initially many countries (Denmark, France, Great Britain, Greece, Norway, etc.) victimized by Nazi Germany during WW2 refused any debt relief as the memories of Nazi atrocities were still fresh, Eventually, the U.S. convinced those countries to do away with some debt repayments in order to stabilize Western Europe’s economies that was under a much serious threat – the USSR.

German debts were reduced from 16 to 15 billion marks, to be paid over a 30 year period. Remember, some of the Marshall Plan aid provided to West Germany went into debt payments and repatriations. Debt repayments were reduced to 3% of export earnings, allowing the United States to import German goods, assisting reconstruction. This agreement freed up more money for infrastructure investment; lowered West Germany’s costs of borrowing; and lowered inflation. With the Americans’ blessing, West Germany joined the World Trade Organization, International Monetary Fund, and the World Bank.

Thirdly, in 1948, the Deutsche Mark substituted the occupation money as the currency of the Western occupation zones. During the World War 2, the Nazis introduced food rations, regulating its civilian population to eat no more than 2,000 calories per day. After the war, the Allies maintained this food rationing strategy and restricted the people to eat between 1,000-1,500 calories. Also, Price controls on goods and services led to massive shortages and a black market. Nazi Germany's currency, the Reichsmark, was thoroughly worthless, leading to trade by barter for goods and services.

By introducing the Deutsche Mark, it curbed hyperinflation, trade by barter and black market smuggling. The currency played a vital role during the East-West Germany reunification of Germany. The East German mark exchanged at a rate of 1:1. Eventually, due to the strong German economy, the Deutsche mark became one of the world's most stable currencies along with the U.S. Dollar.

Finally, by 1952, West Germany joined the European Coal and Steel Community, which would later become the European Union. This enabled German gain market access to many Western European countries. With many skilled professional, high quality goods, and cheap labor, German products were in high demand. As the demand for more consumer goods increased in Western Europe and the United States after World War II, the shortages allowed many countries initially reluctant to trade with West Germany began to purchase German products.