On July 1, 1990, the economies of the two Germanys became one. It was the first time in history that a capitalist and a socialist economy had suddenly become one, and there were no precise guidelines on how it could be done. Instead, a number of problems came to the surface and the most severe was the comparatively poor productivity of the former East German economy and its links to the collapsing socialist economies of the Soviet Union and Eastern Europe.
In general, Unification caused many disastrous effects on the East German Economy. The manufacturing output fell sharply between 1990 and 1992. Two of the worst hit sectors were both manufacturing and consumer industries. For example, output in the chemical industry slumped by 40%. Consumer industries also suffered a severe slump but this was not due to lack of demand. Inhabitants of East Germany were buying previously unavailable West German goods rather than those produced by workers in the East. In my opinion, the inhabitants of Eastern Germany had the chance to experience a whole new lease of life, and to some extent make good use of their newly granted freedom. Many East Germans didn’t want the goods produced at home and therefore preferred Western consumer goods and food. As a result of this, many competent and well-run East German firms went bankrupt. Another severe problem within the economy after Unification was the dramatic rise in unemployment levels. Official figures show that the levels went from 142,000 in 1990 to 1.6 million in August 1991. A possible reason for these figures is the fact that the East Germans were crossing over into the West to work and there were simply not enough people left in the East to take the jobs. Sources show that by the end of 1990 as many as 250,000 were commuting to work in the West of the country and this number had grown even more to approximately 400,000 by August 1991.
Despite the problems that were in existence, few East Germans suffered hardship in 1989, before the fall of the Berlin Wall. They had enough food, many people owned a television, a fridge and a washing machine. It is important to note that East Germany was the most prosperous state in Eastern Europe. Looking aside from the economic position of East Germany at this time, a point to emphasise is that the East Germans compared their living standards with West Germany and not other European countries. Their constant exposure to Western advertisements, made them aware of benefits of Western lifestyle.
In general, I would agree that the negative attitude of the former East German people came as a result of Economic change because to some extent their lifestyle kept deteriorating further, throughout the years, but especially from 1989 onwards. After the construction of the wall in 1961, the SED attempted to win loyalty of citizens by raising the living standards to match those of West Germany. This proved successful in the 1960’s and 1970’s but after this, the economy began its decline. East Germany’s shortages were very focused and were generally within the areas of microelectronics. This however, led to lack of investment in consumer industries and shortages resulted. For example in 1989, there was a 12 year waiting list for a new car and unbelievably. 2nd hand cars with high mileage were more expensive than new ones. A second example was the 10-year waiting list for the installation of a telephone. As well as these, many problems, which were associated with economy, resulted from the fact that consumer groups were heavily subsidised. Necessities like bread, transport and electricity, only cost a fraction of their real market value. This policy distorted the economy even further, meaning that neither landlords nor the state had the money to preserve properties to a high-quality standard.
In my opinion, the East Germans were ecstatic when the wall was finally opened and they had a new found freedom to explore places they had never been allowed to go to before, and to purchase things which had been previously unavailable. The state of the economy, which came as a result of the Unification, combined with the way by which the East Germans had been living since the fall of the wall, instigated the current problems. I think that their negative attitude came about because there was an unavoidable feeling of disappointment when they realised the new Unified Germany wasn’t coming up to what they had expected of it. When Mikhail Gorbachov became leader of the Soviet Union, he introduced domestic reforms, and East Germans had always hoped that their government would follow suit. The SED Government however, showed several weaknesses, which in turn affected how the East Germans reacted to the Unification. These weaknesses were that the majority of the party leaders were too old and were unable to respond effectively to new developments. Secondly, there were many divisions among party leadership. Thirdly, there was evidence that the party leaders gradually lost touch with party members and more important still was the reaction of the SED to the Tiananmen Square massacre. The fact that both Honecker and Krenz openly supported Deng Xiaoping’s massacre of demonstrators proved to be a deciding factor in the alienation of party members from their leaders.
The decline of the economy in East Germany after 1985 weakened the loyalty of the people to the SED regime. This, in my opinion, is the contributing factor to why the former East German people became negative about the Unified Germany.
Bibliography.
Books:
Internet:
http://www.germanculture.com.ua/library/facts/bl_unification_impact.htm
Other:
Lecture notes from class
Notes from Seminar discussion