Countryaah, Germany experienced a regime change after the
general elections in September when the SPD, the
Sozialdemokratische Partei Deutschlands (Germany's Social
Democratic Party), formed a coalition government with the
environmental party Die Grünen (The Greens), led by
Chancellor Gerhard Schröder of the SPD. Thus ended a 16-year
power struggle under former Chancellor Helmut Kohl and his
CDU, Christlich-Demokratische Union (Christian Democratic
Union). Shortly after the election defeat, Kohl left the
party chairmanship post at the CDU, which he had held for 25
years, and was succeeded by Wolfgang Schäuble, who, for the
West German side, led the negotiations for Germany's
One success for Die Grünen was that, according to the
coalition agreement, the government will initiate a
decommissioning of nuclear power in agreement with the power
companies. However, these threatened to claim damages in
excess of DEM 100 billion if nuclear power is wound up
prematurely. The party's biggest success was that their
frontal figure, Joschka Fischer, became Foreign Minister,
the most prominent position a green politician has ever
achieved in Europe.
An ecological tax shift was also on the government's
agenda. This means that energy taxes are increased and
employers' fees are lowered in the hope that this will
create more jobs. In addition, a tax reform was agreed,
which in a few years' time will give a normal family tax
relief of the equivalent of SEK 12,000. The cooperation
stopped somewhat within the Social Democratic Party. The
contradictions were mainly between Schröder and Finance
Minister Oskar Lafontaine, who is also chairman of the SPD.
Schröder advocates a pragmatic middle politics, while
Lafontaine wants a strong, ideologically oriented state as a
counterbalance to a globalized economy.
There was a general consensus that the existing civil law
law should be amended, where the principle is that it is the
German origin that determines who can obtain a German
passport. It has so far meant that German kittens in e.g.
the former Soviet Union has had easy citizenship, while
immigrant children born in Germany have had a very difficult
time obtaining citizenship and thus have not gained voting
rights. The law led in late autumn to the Constitutional
Court opening the way for a 14-year-old Turkish boy, born
and raised in Germany but who had committed a long series of
crimes, was expelled to Turkey where he had never been.
In the Saxony-Anhalt state elections, the right-wing
extremist DVU, Deutsche Volksunion (German People's Union)
received 13% of the vote. It was the biggest success that a
right-wing extremist party has had in the country since
Hitler's days. Shortly thereafter, supporters of DVU and the
neo-Nazi NPD, the National Democratic Party of Germany
(Germany's National Democratic Party) conducted a march in
Rostock in the northeast where over 4,000 leather heads and
others marched through the city in uniform-like clothing
while waving old national-flag flags with the center cross.
In Leipzig, in southeastern Germany, nearly 6,000 people
gathered on May 1 in the largest neo-Nazi manifestation
since the 1960s. Claims broke out between police and
protesters and counter-protesters. An investigation showed
that right-wing acts of violence against mainly immigrants
increased sharply, especially in the eastern part of the
The large German electrical technology and electronics
group Siemens announced that it had set up a fund equivalent
to DKK 96 million. kr. to compensate for the still-living
people that the company used as slave laborers during the
Nazi period. There were several examples of a tendency among
German large companies to, through mergers, strengthen their
positions before the currency union and benefit from rising
stock prices. Germany's largest industrial group
Daimler-Benz merged with American Chrysler to
DaimlerChrysler. At the same time, German Deutsche Bank and
American Bankers Trust joined forces to form the world's
largest bank, as well as German chemical and pharmaceutical
giant Hoechst negotiated a merger with the French
pharmaceutical company Rhône-Poulenc.
A train accident in the northern German city of Eschede
claimed 100 deaths and several hundred injured, of which 73
In the early 1970s, there were contradictions between the
old party leader and the Soviet leadership on the relaxation
policy in Central Europe. The Soviet leadership was
therefore dismissed from the party leader. In 1971, Erich
Honecker took over this post. This paved the way for a
change in relations with West Germany. Finally, the GDR was
also internationally recognized. The Berlin Agreement of
1971 is a turning point in this development. Later, a
constitutional treaty followed between the two German
states, membership of the UN and diplomatic relations with a
large number of capitalist states.
With a constitutional change in 1974, the last common
German ties disappeared. Instead, talk is of a socialist
national culture and emphasis is placed on relations with
the Soviet Union.
The economic system
Economically, the GDR was divided into a southern and a
northern part. There is a greater population concentration
and more industry in the southern districts around Dresden,
Halle, Leipzig and Karl-Marx-Stadt. One quarter of the
entire country accounted for half of industrial production.
In the northern district around Schwerin, Neubrandenburg and
Rostock, which is about as large, the percentage was only
seven. The population is three times larger in the south
than in the north. In the northern districts where
agriculture is important, about 40% of the population lives
in cities with more than 10,000 inhabitants. In the four
southern districts, that figure is 50%.
It was not private ownership of medium and large
companies. On the other hand, the socialist property
consisted of the property of socialized companies,
cooperatives and public organizations. Economic development
was based on the 5 (and 7) year plans.
In agriculture, large farms were the most common. The
uses averaged 4,400 acres. About 40% of the working people
worked in the industry. They accounted for more than half of
the gross domestic product. VEB (Volkseigener Betrieb) Leuna
Werke (around 30,000 employees), VEB Carl Zeiss Jena, VEB
Filmfabrik Wolfen and VEB Chemiekombinat Bitterfeld were
among the largest industrial companies.
In the 50s, the average growth rate was 14%. With the
transition to the intensive growth phase in the 60s, it
dropped to around 6%. However, planning economics and hard
work failed to clear the economic gap between West Germany.
The main difficulties were the outdated machine equipment
and a correspondingly high energy consumption as well as a
greater need for labor.