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German Unification The two post-war German states became one on October 3, 1990. That event, seen with the benefit of hindsight, was as much the starting point as the culmination of the process of unification. During the forty years they existed side by side, the Federal Republic of Germany and the German Democratic Republic developed very different political, economic and social institutions. Establishing the terms of political union proceeded quickly in the months following the collapse of the GDR's communist order in late 1989. Uniting Germany economically and socially, on the other hand, has been more complicated and has demanded more time than many had expected during the excitement of 1989-90. Even as the eastern and western halves of the country come to share increasingly more in common, German unification remains a work in progress. Economic Unification The first step toward economic unification came on July 1, 1990, when the Federal Republic's Deutsche Mark became the sole currency of the soon-to-disappear German Democratic Republic. It had become clear not long after the opening of the Berlin Wall that East German industry would have great difficulties competing on open international markets while, at the same time, facing the prospect of losing its traditional markets in the COMECON nations. Hoping to stave off economic collapse in the east, the government of the Federal Republic proposed a plan in early 1990 to make the West German Deutsche Mark the common currency of the two German states in anticipation of political union. Although the East German mark had become almost worthless, Bonn agreed to a 1:1 exchange for salaries, wages and certain categories of personal savings and a 2:1 exchange for most individual and commercial accounts in eastern banks. In all, assets with a face value of 300 billion GDR marks were exchanged for DM 182 billion, U.S. $110 billion at the time. Implicit in the agreement on currency union and the concurrent plans for merging the economic and social welfare systems of the two German states was the understanding that Bonn would shoulder much of the financial burden of closing the economic gap between unified Germany's eastern and western states. That turned out to be a more costly undertaking than anyone anticipated in 1990. Initial assessments of eastern Germany's competitive potential proved to be far too optimistic. Eastern industry was, by and large, technologically outmoded and heavily over-staffed. The agency responsible for privatizing eastern enterprises, the Treuhandanstalt, quickly found that investors had little interest in acquiring eastern commercial assets unless offered substantial incentives or subsidies and, in many cases, a free hand in cutting payrolls. Obsolescence and inefficiency were made worse by the physical legacy of the GDR's economic policies: the eastern landscape abounded in toxic waste sites and in crumbling public infrastructure. The euphoria sparked by the opening of the Berlin Wall gradually gave way to a more sober realization of the full magnitude of the task of rebuilding the east from the ground up. The public and private sectors responded with a massive program of aid and investment. Transfers to the new eastern states passed the DM 1 trillion mark in the spring of 1998. Roughly half of this infusion has come directly from the federal budget, and annual governmental outlays for Aufbau Ost ("Building the East") are expected to continue at the present level - DM 140 billion in 1997 - into the next decade. The half trillion marks privately invested in the east between 1990 and early 1998 include DM 211 billion pledged in connection with purchase agreements for GDR state assets and state-subsidized ventures. Public and private investment has done much to bring the east's basic infrastructure up to par with the west. Since 1990, 7,000 miles of roads and 3,000 miles of rail lines have been rebuilt or newly constructed. Over half a million new housing units have been built and 3.5 million existing residences have been renovated. Eastern Germany's telecommunications system was completely replaced with state-of-the art technology and now ranks among the most advanced in the world. The market economy has taken firm root in the eastern states. By the expiration of its mandate in 1994, the agency responsible for selling the one-time state property of the GDR had turned approximately 14,000 enterprises - 98 percent of those entrusted to it - over into private hands. Hundreds of thousands of new businesses have opened in the east, and both western German and foreign firms, led by multinational giants such as Siemens and General Motors, have set up shop there as well. In 1998, the eastern states were home to 520,000 small and medium-sized businesses, most of them founded since unification, with a total of 3.2 million employees on their payrolls. The number of self-employed easterners has also grown rapidly, jumping from 30,000 shortly before unification to 240,000 in 1998. This flourishing and steadily expanding private sector testifies to the scale of the economic change that has occurred in eastern Germany since unification. The full extent of this change is often overlooked, though: eastern Germany's economic progress is invariably measured against by how close it has come to matching western German performance levels rather than how far it put centralized planning and COMECON-focused trade behind it. Financial, technical and legal assistance from the western German states have helped eastern Germany make a more rapid and arguably less disruptive transition to the free market than the other onetime Warsaw Pact member states. Nor, it should be added, do economic comparisons between eastern and western Germany tilt so lopsidedly in the west's favor as they did at the time of political unification. Eastern worker productivity and wages stood at roughly a third of the western average in 1990. Both the productivity and wage gaps have narrowed considerably in most professions and branches of industry . Three independent research institutes - the German Institute for Economic Research (Berlin) , the Institute of International Economics (Kiel) and the Halle Institute for Economic Research - reported in the summer of 1998, for example, that worker productivity in eastern Germany's manufacturing sector. has improved markedly, more than doubling between 1991 and 1997. But even with that gain, the institutes noted, output per worker in the east still averages about 70 percent of the western level. Eastern wages, on the other hand, have risen to 90 percent of basic western wages. Wage growth in the east has slowed, however, while productivity levels continue to rise. In some industries that have benefitted from high levels of capital investment - such as the computer and microelectronics industry that has helped to make a boom town of Dresden - eastern workers fully match their western counterparts in output and international competitiveness. The lingering productivity gap has also been partially offset by eastern workers' growing adaptability. Unions in the east have responded to employers' calls for greater labor flexibility by largely abandoning the practice of industry-wide wage settlements common in western Germany for company-specific contracts. Eastern workers also earn high praise from employers and foreign investors these days for being more willing to put in longer hours and to work on weekends or holidays than their western counterparts. The most frequently cited economic disparity between eastern and western Germany is in the scope of unemployment. At its peak late in the mid-decade recession, the unemployment rate stood between 10 and 11 percent in the western states. Eastern Germany, by contrast, saw unemployment jump quickly after unification to about 15 percent and then gradually rise through the recession to over 20 percent. The jobless rate began dropping in both halves of the country in mid-1998, but the decline in the east was more modest and more dependent on government job-creation measures than the job market improvement in the west. Social Unification Germany's ongoing public discussion of social unification has been able to draw upon an abundance of evidence, statistical and anecdotal, that has regularly been offered in the press. Easterners and westerners alike have been surveyed often and at length about their views of one another and their assessments of the quality of life since unification. Substantial as differences of opinion on specific issues have been, one general trend has been clear since the union of the two German states in 1990: very few Germans in either half of the country would want to see a return to the status quo ante. This trend was confirmed in a recent survey of the group within German society most likely to have doubts about unification: voters who regularly cast their ballots for the Party of Democratic Socialism. The successor - the reformed and much changed successor - to the German Democratic Republic's communist party, the PDS has had a measure of success in positioning itself as a champion of eastern interests. It now consistently wins about 20 percent of the vote in Berlin and the five eastern states (it has yet to come anywhere close to clearing the five-percent hurdle in the western states). In the summer of 1998, with a national election on the horizon, the news weekly Der Spiegel commissioned a survey of PDS voters. Given the option of listing several reasons to explain their support for the party, half of the respondents cited its eastern roots and its position on social policy. About a third said their PDS votes were intended as a statement of protest against either the Kohl government or western German influence in setting policy for the east. Only five percent described their support for the PDS as a protest against unification. Even if the great majority of eastern Germans have no interest in turning back the clock, there has been much talk of the rise of Ostalgie ("eastern nostalgia") and the development of a distinct eastern identity rooted in the experience of life in the GDR. Attachment to various customs and fixtures of everyday life of the GDR era takes many forms. The decision to change the signals at pedestrian crosswalks, for instance, prompted a tongue-in-cheek protest campaign throughout the east not long ago. Rather than words, pedestrian signals in Germany rely on silhouette figures, one standing and one striding, to indicate when it is safe to cross the street. The squat little man who had long presided over eastern street corners briefly became a hero after authorities announced he was to be replaced with his leaner, more angular western rival. A more serious and more telling survival from the GDR is the Jugendweihe ceremony. The Jugendweihe was established by the government of the GDR in the 1950s as a secular coming-of-age ritual to take the place of confirmation in the Christian churches. After briefly falling out of fashion immediately after unification, the Jugendweihe has rebounded in popularity among eastern teenagers and their parents. Reporting in 1998 on the survival of the Jugendweihe, the Frankfurter Allgemeine Zeitung suggested the institution provides a measure of continuity and stability as well as a uniting tie between the generations during a time of great uncertainty. Both eastern and western German public figures have encouraged the continuation of the annual Jugendweihe ceremonies, arguing that in their post-unification form they provide an opportunity to remind young people of the responsibilities they will be taking on as citizens in a democratic society. Seen from this perspective, the Jugendweihe is at once a uniquely eastern institution as well as a means of transmitting the civic values upheld in the pre-unification west and that continue to define the Federal Republic. As with discussions of Germany's economic situation since 1990, assessments of the progress of social unification are usually cast in terms of how far eastern Germany has come to resemble western Germany. This tendency obscures two important points: the impact of unification on western Germans has not been merely financial and today's Federal Republic is not simply a bigger version of its pre-unification self. Unification has likewise compelled western Germans to reconsider their views on a number of domestic issues beyond the economic rebuilding of the east. "Educational unification," for example, was postponed in 1994 until the end of the decade following an inconclusive debate on reforming secondary school curricula. One of the central points of contention was whether the course of studies leading to the Abitur, the academically oriented high school diploma required for university admission, should be 13 years, as has long been standard in the west, or 12 years, the eastern norm that the Kohl government proposed as a model for the country as a whole in 1992. Probably the most difficult social issue to resolve in the wake of unification was abortion. It was not until 1995 that Germany's major political parties found a way to reconcile the pre-unification Federal Republic's prohibition of abortion except under special circumstances and the German Democratic Republic's policy of allowing abortion on demand during the first trimester of pregnancy. In a compromise between east and west as well as left and right, abortion is now illegal in Germany but not criminal so long as a woman seeking an abortion first attends a state-approved counseling program to review her options. Political unification came as a consequence of the end of the Cold War. Beyond laying the foundations for merger of the two German states, the peaceful resolution of the East-West conflict opened the way for Germany to play a larger role within Europe and on the international scene. Germany, with its sovereignty fully restored by the 1990 "Two-Plus- Four Treaty,"* has extended its commitment to European integration by taking a leading role in helping the formerly communist states of Eastern Europe on their way toward membership in the European Union and NATO. Unification has also provided Germany with the opportunity to address long outstanding issues in its relations with the Eastern European nations arising from the war. The Federal Republic now enjoys relations with Poland nearly as close and as comprehensive as its ties with France. Substantial progress has likewise been made toward German-Czech reconciliation. More generally, recognition of the change in Germany's international status that came with the end of the Cold War and unification underlies the broad popular support for recent government and Bundestag decisions to have the German military take a more active role in international peacekeeping missions. The government of this more vigorously engaged Germany is scheduled to relocate from Bonn to Berlin in the autumn of 1999. This move - another example illustrating that unification did not occur all in an instant - has spurred much talk about the demise of the old "Bonn Republic" and its replacement by a more assertive "Berlin Republic." President Roman Herzog, for one, has voiced doubts about such arguments. In early September 1998, looking back fifty years to the deliberations that ultimately produced the Federal Republic's constitution, Herzog dismissed the notion of a Bonn Republic and of the imminent arrival of fundamentally new political order. The Federal Republic, the president stressed, was never a purely Rhineland institution: its commitment to democracy was not dependent upon geography. Much has undoubtedly changed since the east's peaceful revolution of 1989-90 and political unification, Herzog acknowledged, and many more changes certainly lie ahead. "But when the moving vans start to roll, we ought to realize we are not moving into a different republic," he insisted. The ongoing process of unification, in short, will continue to take place within a constitutional framework that has successfully met the challenges of a changing world for a half century now.
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