Last week, we talked about the fall of the Berlin Wall on November 9, 1989 and the reunification of East and West less than one year later. We also alluded to the financial and social costs that unity would require.
Financial and social costs of reunification
Immediately following reunification, an agency was created to privatize the “people’s property”, the state-owned enterprises in the former East. This agency was called Treuhandanstalt. It soon became clear that the average productivity of the German Democratic Republic (East Germany) was equal to only one-third of that of the Federal Republic of Germany (West Germany). The profit from privatization that had been expected to come close to DM 600 billion (about €300 billion) fell short by far. In fact, the expected profit turned into an actual deficit of DM 230 billion (€115 billion). That meant that privatization could no longer pay for the needed infrastructure in the new federal states, as had been anticipated. To make matters worse, factories in the former East were so outdated that they had to be closed and/or rebuilt resulting in massive unemployment. With little initial productivity in the East, the population in the former West was forced to bear most of the financial costs of reunification. The population in the former East was forced to bear most of the social costs of reunification. Soon, reunification exuberance turned into gloom on both sides.
Aufbau Ost project.
Then there was the Aufbau Ost project. It consisted for the most part of the construction of infrastructure and telecommunication facilities in the former East, preservation of cultural assets, environmental projects, and the renovation of inner-city residential quarters in Dresden, Leipzig, Chemnitz, and Halle. The initial lack of such assets in the five new federal states resulted in an immediate exodus from east to west. According to a recent statement by German Chancellor Angela Merkel, the exodus has finally stopped. But it took 25 years before the population outflow in the new federal states is equal to the population influx.
Today, 25 years after reunification, great progress has been made in the former East, both economically and socially. The worst is over. Still, enormous challenges remain. But the people from East and West are now prepared to face them together.
For a sneak peek at the first 20+ pages of my memoir, Walled-In: A West Berlin Girl’s Journey to Freedom, click “Download a free excerpt” on my home page and feel free to follow my blog about anything German: historic and current events, people, places and food.
Walled-In is my story of growing up in Berlin during the Cold War. Juxtaposing the events that engulfed Berlin during the Berlin Blockade, the Berlin Airlift, the Berlin Wall and Kennedy’s Berlin visit with the struggle against my equally insurmountable parental walls, Walled-In is about freedom vs. conformity, conflict vs. harmony, domination vs. submission, loyalty vs. betrayal.
