A period of political stability : Germany

The overwhelming majority of Germans are actively in favor of national unification. Understandably, many Germans in east and west have different opinions on the contribution which the people in the old states are making to help those in the new. The alienation that had developed over a period of more than 40 years of isolation is now becoming less and less pronounced, especially since the general initial euphoria has given way to a sober assessment of what is feasible. People have realized that while it is comfortable to expect the standard of living in eastern and western Germany to be quickly brought into balance, this is in fact unrealistic. Today people look at the progress which has actually been made. On this basis one can see a steady increase in the number of people who express their satisfaction with the process of recovery in the new federal states; they presently represent over 60 percent of the overall population - and nearly 90 percent of young Germans in the east between the ages of 16 and 29.

A difficult aspect of coming to terms with the period of rule by the SED has been and continues to be the handling of so-called government crime by the courts. How, for instance, should the guilt of those be assessed who bore political responsibility for giving the order for the shootings along the Wall and the barbed-wire fences? In this case, the basis for criminal pros-ecution is the law in force in the GDR at the time the crime was committed. Another painful issue is the scrutiny of the vast quantities of files maintained by the GDR State Security Service (Stasi). Many people in eastern Germany want to know what kind of information the Stasi held on them, and many of them discover upon reading their files that they were spied on by individuals they had trusted.

Maintaining Germany’s attractiveness as a location for business and industry : Germany

Both the business community and society must adapt to ever stiffer global competition and institute structural changes in order to ensure that Germany remains an attractive location for business and industry in the future.

The prospects for success are good. Germany has a number of indisputable strengths, such as 2>a balanced economic structure with many productive large, small and medium-sized firms; >a highly skilled work force. Germany’s dual system of vocational training is highly respected throughout the world. Its efficiency is reflected in the country’s relatively low rate of juvenile unemployment; >a very good public infrastructure in the areas of transport and communications; and ^remarkable economic and social stability. The immediate priorities are to boost growth, considerably reduce unemployment and increase the Federal

Republic of Germany’s attractiveness for investors and employers. The Federal Government has presented a comprehensive 50-point Action Program for Jobs and Investment, an overall concept aimed at instituting a process of structural change. It is now being implemented point by point and was further elaborated in the Program for More Growth and Employment presented in April 1996. Nearly all of the foreseen measures have meanwhile been implemented or the groundwork therefor has been laid.

The economic unification of Germany : Germany

Conversion of the economy of the former GDR, structured as it was on planned economy lines, into a functioning system based on the principles of the social market economy was and remains a challenge which is unique in history to date. It requires a massive transfer of finances from western to eastern Germany. By the end of 1996, public spending had reached a volume of DM 750 billion.

A key role was played in the restructuring of the economy in the new federal states by the Treuhandanstalt (Trust Agency). By the time it ceased operations at the end of 1994, the Trust Agency had privatized about 15,000 enterprises, yielding proceeds of approximately DM 66 billion, and had secured DM 211 billion in investment pledges. In addition, it had obtained commitments to retain or create around 1.5 million jobs. The latter was an especially significant result of the Agency’s work because the conversion of the economy has required particularly painful intervention in terms of employment; many jobs have been lost in the course of restoring competitiveness. Since unification the Federal Government has therefore expended considerable financial resources to further the creation of new jobs.

On the road to European Union : Germany

The common internal market of the then twelve EC states was launched at the beginning of 1993. This market united 345 million Europeans to form the economic area with the greatest purchasing power on earth. With the exception of Switzerland, the states of the European Free Trade Association EFTA (Austria, Sweden, Norway, Finland, Iceland and Liechtenstein) and the European Community formed the European Economic Area. The first stage for achieving monetary union began in mid-1990.

During this period capital transfers among EC states were liberalized, and coordination of economic policy between the partners as well as cooperation between their central banks were intensified, iince the beginning of the second stage on 1 January 1994, the European Monetary Institute (EMI) has been Preparing the establishment of a European Central Bank which will be headquartered in Frankfurt am Wain. The decision on irrevocably entering the third stage - the final stage of monetary union - will be taken in the spring of 1998. A high degree of monetary stability and budgetary discipline is a precondition for the planned creation of complete economic and monetary union.

Setting the Stage for the Future : Germany

Following the restoration of German unity and the colossal political changes occurring in the wake of the collapse of the communist systems in the eastern part of Europe, the Federal Republic and its partners faced and continue to face completely new challenges.

>The recovery process in the new federal states must be accelerated and the internal unity of Germany completed.
>The European Union must be further developed, deepened and enlarged.
>A global structure promoting peace and security must be established and maintained.

National, European and global responsibilities are inseparably intertwined. Recovery and consolidation in the new federal states cannot take place unless they are closely bound up with the process of European integration. Europe cannot retain its new structure without opening itself up to the reformist states in Central and Eastern Europe. Economically as well as politically, the states of eastern Central Europe must be led step by step towards the collective European and Atlantic organizations.

From the decline of the GDR to German unity : Germany

The German Democratic Republic, which had been founded on 7October 1949, was a product of the Soviet Union. It was from the outset a communist dictatorship built on the foundations of the rule of the Socialist Unity Party (SED). The command economy, secret police, the all-powerful SED and strict censorship increasingly alienated the people and the regime. However, very inexpensive housing, health care and social services - made possible by government price-fixing and subsidies - gave this self-contained system a certain amount of flexibility which enabled the people to eke out an existence in many different ways. The GDR’s great success in international sports was a sort of compensation, just as the “workers” gained satisfaction from the fact that they soon had the highest rate of industrial production and the highest standard of living in the Eastern bloc, despite having to make huge reparations to the Soviet Union. The people’s reaction to state control and tutelage was to withdraw into their private sphere.

In spite of all the propaganda about annual production targets having been more than achieved, and behind the facade of an anti-imperialist indoctrination in schools, factories and the armed forces, it became increasingly clear that GDR’s original intention of overtaking the Federal Republic economically would remain a dream. Depleted resources and industry’s vicious destruction of the environment, coupled with loss of productivity as a consequence of central planning, forced the SED regime to go easy on its promises. It had to raise increasingly large loans in the West. Improvisation became the order of the day with regard to consumer goods. The quality of life and infrastructure (housing, transport, environmental protection) thus deteriorated. A Big-Brother spy network kept watch on everyone, and the system’s incessant propaganda and mendacious appeals for solidarity made the c’aim about the leadership role of “the working class and their Marxist-Leninist party” (Article 1 of the GDR constitution) sound like hollow rhetoric, especially to tne young generation.

Missiles Versus Detente : Germany

Whereas the process of European integration continued steadily in the West, the transition from the 1970s, the decade of detente, to the y°0s was marked by fresh conflicts in Eastern Europe. e Soviet invasion of Afghanistan, the imposition of artial law in Poland and the emplacement of new ^mediate-range missiles (SS-20) in the Soviet on Wrlr— J the climate of East-West relations.

NATO reacted to this serious upset of the balance of security by deciding that it, too, would introduce new missiles as from 1983. But at the same time it proposed arms control negotiations to the Soviet Union. This was the “two-track” decision. In protest at the invasion of Afghanistan, the United States, the United Kingdom, Canada, Norway and the Federal Republic refused to take part in the Moscow Summer Olympics (1980). The United States tried a new initiative, the “zero” solution, by which the Soviet Union would remove its intermediate-range missiles while NATO would promise not to deploy its Pershingll and the new cruise missiles.