Monetary union between the GDR and the FRG | Woe to the loser...

On July 1, 1990, the monetary, economic, and social union between the Federal Republic of Germany and the GDR came into force. This date is particularly conjured up by images of GDR citizens queuing in front of savings banks. Yet this treaty encompassed far more than the introduction of the Deutsche Mark into the GDR .

That's true. It was a disastrous political decision, the repercussions of which are still felt today. It all began with the abrupt introduction of the Deutsche Mark without any gradual adjustment measures. The hasty unification was focused on replicating the West instead of building and expanding sustainable structures, along with largely preserving the traditional economic ties of East German companies, especially with Eastern Europe and the Soviet Union. And of course, the disastrous work of the Treuhandanstalt (Treuhand Agency) under Birgit Breuel of the CDU had devastating consequences: deindustrialization, mass unemployment, and destroyed lifestyles.

But the Treuhand was already founded under Hans Modrow's government, in which you were Minister of Economic Affairs ? On March 1, 1990.

But with completely different intentions. We wanted to preserve public property for the common good. However, the Treuhand (Treuhand), under the leadership of Birgit Breuel, later aimed for the rapid privatization of the previously publicly owned economy in East Germany. The result was the largest expropriation of productive assets in peacetime. We didn't want to privatize at any price and under any conditions. But that's how it happened. On the terms of the West. That was the plan from the start.

But there were also critics of this approach in the West.

Yes, for example, Bundesbank President Karl Otto Pöhl. One day before monetary union, he met with Hans Modrow and me. He said that the East German economy really needed to be reformed and rehabilitated before the introduction of the Deutsche Mark. He couldn't get his point across to Helmut Kohl. The Chancellor wouldn't even be dissuaded by Pöhl's announcement that he would resign if his warning wasn't heeded. Pöhl then resigned. Criticism also came from BDI head Tyll Neckar, with whom I got along well. He was an entrepreneur and said to me: "If the federal government does this to you, it's like chasing a person up a steep, icy mountain face in the most severe frost." He liked to speak in images. For example, he compared the situation of East German companies in free competition with West German companies to the chance an amateur boxer had against a professional. He, too, was ignored. Nothing was accepted. Kohl, his government, and their clientele were so determined to get what they had always wanted without delay. And the Deutsche Mark served as their bait.

But this was demanded by a majority of GDR citizens: "If the D-Mark comes, we'll stay; if it doesn't, we'll go to it!" Can one blame them for being happy about the quick Western money so they could fulfill consumer and travel desires they had only dreamed of until then?

Of course not. But the price they paid was high. And that was foreseeable. There was a "German Unity" Committee of the People's Chamber and another one in the Bundestag, which spent five months deliberating the contractual details of reunification. I remember a meeting of representatives of parliamentary committees with Theo Waigel, then Federal Finance Minister of the CSU. He said to us, the members of the People's Chamber: "We'll give you the best we have: the Deutsche Mark and the social market economy. That will cost us a lot; it's not cheap. It won't work without a collateral." The collateral he meant was the GDR's public property, which had to be privatized as quickly as possible. He made no secret of this.

Was that blackmail?

Absolutely. And Ms. Breuel knew exactly what she was doing. I'll never forget, back when the Treuhandgesellschaft was still headquartered in the Haus der Elektroindustrie (House of Electrical Industry) on Alexanderplatz in Berlin, black limousines drove up and young men in suits with gold chains and heavy briefcases got out. They were called in one by one and asked what they wanted. They came out laughing. They got everything they wanted and didn't even have to provide any evidence that they had at least managed a small company with five employees. Nothing that could attest to their competence and integrity. They made investment promises that no one monitored. When I once asked how the monitoring of the promises was going, I was told: "What do you want, Ms. Luft? If we do that, all your companies will go bankrupt."

That was the dominant dictum: the GDR economy was bankrupt.

It was supposedly worthless, just scrap. Which, of course, wasn't true. When we, representatives of the Modrow government, were in Bonn in early February 1990 on an official mission to the Chancellor, we were dismissed as illegal petitioners.

They had asked for a billion-dollar loan, which was rejected on the grounds that the money would simply be wasted. But how much staying power did the GDR have left? The so-called Schürer paper...

...was not a total declaration of bankruptcy, as is often claimed. When Egon Krenz became Chairman of the State Council in October 1989, he commissioned an unvarnished analysis of the state of the GDR economy. Gerhard Schürer, head of the GDR's Central Planning Commission, was responsible for this, with Alexander Schalck-Golodkowsky being a key co-author...

... Head of the KoKo, Commercial Coordination, officially located at the Ministry of Foreign Trade.

The other co-authors were Edgar Most, deputy director of the GDR State Bank, and Gerhard Beil, Minister of Foreign Trade. The document was top secret, de facto classified as "to be burned before reading." Anyone who had participated in the Politburo's discussions about this document at the time had to hand back their copy immediately. After Schalck-Golodkowski fled to West Germany with his wife on December 8, 1989, he was first interrogated at the BND headquarters in Pullach. He spilled the beans, including the contents of the Schürer paper. I read the secret transcripts of his interrogation. He was very generous: "You can ask me anything you want, I'll tell you everything." I only learned the contents of the Schürer paper much later, like all other citizens of the GDR.

And everyone was shocked because everything seemed much worse than they had imagined.

The first part establishes the difficult conditions under which the GDR had achieved so much after the destruction of the Second World War, and despite the dismantling and reparations. We had to build new blast furnaces and new ports. That was true. You could agree with that. Then comes the paragraph: "What went wrong?" You could agree with everything there: We had environmental problems, there was a shortage of spare parts, young people were dissatisfied... All, all true. The problem, however, was how this analysis was interpreted: The GDR was no longer solvent. Schürer himself admitted in 1990 that he had overestimated the foreign debt. But that was no longer noticed. Accordingly, we were dismissed in Bonn with such arrogance: "What do you want? You're bankrupt." That was the mood.

You mean the meeting in February 1990, when Modrow was in Bonn with 17 ministers?

Yes. That took place in the NATO hall! Just imagine. Beforehand, each of us had to speak for ten minutes with someone from the West German side with whom we had already had contact. In my case, that was Horst Köhler, then State Secretary under Waigel. He told me I should be jumping for joy. To which I asked him, "Why should I?" He: "Well, because we're offering the GDR the immediate adoption of the Deutsche Mark as official currency." I said, "Mr. State Secretary, I don't know anyone who wouldn't be happy to have money in their pocket with which they can buy anything they want. But of course, there are catches." Köhler: "What catches?" Me: "When the Deutsche Mark is introduced tomorrow morning, all HO and Konsum stores will be cleared of GDR products overnight to make room for Western products. For GDR companies, that means they can no longer sell their products and will have to cease production. Then there will be masses of unemployed. Unemployment is unknown in the GDR. That would be an incalculable setback." His jaw dropped. But that wasn't all. I pointed out to Köhler that our main sales markets were in Eastern European countries and the Soviet Union. How would their foreign traders get hold of Deutsche Marks on an ad hoc basis? All transfer payments had previously been settled in rubles. That, too, would mean further unemployment because orders would dry up. The man was completely confounded and said to me: "Why are you arrogant, Ms. Luft?"

Köhler, who later also managed the introduction of the euro, should have had enough expertise to oversee all of this?

Well, I don't know. At the time, he reprimanded me: "Are you accusing us of a lack of understanding?" Two years later, I met him on a trip to Japan. He said, "You know, Ms. Luft, I've often thought about our conversation back then." And when he then ran for Federal President, meaning he also needed votes from the East in the Federal Assembly, he admitted in "Super-Illu": "We treated the East Germans far too shabbily." That was, of course, a bit late.

Such remorse was also heard from some West German scientists who had participated in or tolerated the liquidation of their East German colleagues.

Last week, I attended an honorary colloquium for Horst Klinkmann, an internationally highly respected physician who also conducted research into artificial organs. In 1992, he was stripped of his professorship at the University of Rostock for "lack of personal suitability." This was because he had served on the SED district leadership for four years. He was removed from his positions, but received honorary professorships around the world and later served as dean at the University of Bologna in Italy and at Nanjing University in China. Highly respected. Many guests from abroad attended the Leibniz Society's event celebrating his 95th birthday. Yes, all those who participated in the dismantling of East German science and industry should be ashamed. But they aren't.

But the East Germans are not free from responsibility for what happened back then.

Yes, many were trusting: "Our brothers and sisters" in the West wouldn't do that to us. Oh well.

Today, the Federal Republic itself is struggling with problems that the GDR faced in its final years: dilapidated infrastructure, environmental damage – and no money for all construction sites.

Absolutely. When you take the train these days, you never know when you'll arrive. I recently had to change trains four times on my trip from Berlin to Retgendorf in Mecklenburg: train, bus, train, bus. It took me over four hours to cover the relatively short distance. Yes, serious investment is needed in infrastructure. But that also means that we can't grant Volodymyr Zelenskyy's every new request for money and weapons, and more and more taxpayer money is being poured into the Bundeswehr's equipment and rearmament. The only economic sector that's growing is the arms industry. Unfortunately, even socialists are buying shares in arms companies.

Oh, no!

But.

And the reasoning?

By attending shareholder meetings, they know what's going on. You can find out what's "going on" every day in the newspapers and other media. When the "Breaking News" line appears on the screen, you hold your breath: What now? Could it get any worse? Unfortunately, yes.