Image © Press Association The Fall of the Berlin Wall – 25 years on The events of 9 November 1989 changed the face of Europe. Two and across Europe. Eventually, this would spread to the Soviet Union itself, leaving only a half decades on from the fall of the Berlin Wall, Charles Lees evaluates handful of surviving states, including China, the consequences of German unification for its economy, its domestic where the Communist party remained in politics, and its role in the world. power. A quarter of a century on, Europe has changed dramatically. The European Union has t is rare to be present at a really key regime that advocated opening fire on their expanded to include 28 member states and historical moment and to grasp the own people but wiser, or more fatalistic, heads Germany is the most powerful of those states. enormity of events as they unfold. But prevailed. Subsequently the beginning of the On the 25th Anniversary of the fall of the Iwhen I joined hundreds of other Berliners end of East Germany had an anticlimactic Berlin wall, German elites can be forgiven for – native and adopted – to party on the Berlin quality when, on 9 November, the hangdog a sense of quiet satisfaction. Germany has wall on the night of the 9 November 1989, it Berlin party boss and de facto spokesperson by-and-large overcome its internal divisions, was clear to us all that nothing would be the for the regime, Günter Schabowski, calmly modernised its economy (at some cost to the same again. announced freedom of travel with immediate living standards of ordinary Germans) and once With hindsight, what is striking is how quickly effect. Within hours East Germans were again become the economic powerhouse of things fell apart in East Germany. Only a few streaming through the Berlin border crossings. Europe. Moreover, in recent years Germany has months earlier the Tiananmen Square massacre There were no shootings and very little also begun to punch at something close to had appeared to demonstrate what might drama; just the efficient implementation of an its weight in diplomatic terms as well. Indeed, happen in Berlin, Dresden, or Leipzig, if East executive order and 40 years of division came at a point in European affairs when France is Germans were to take to the streets. Yet this to an end. preoccupied with its economic troubles and was exactly what they did in September 1989 the UK has withdrawn into itself, it sometimes and, as the protests escalated, it was not clear Reawakening the German Giant appears as if German power in Europe is only how it all might end. The unification of Germany in October 1990 constrained by Germany’s own reluctance to There were elements in the East German was part of the wider collapse of Communism exercise it. 4 POLITICAL INSIGHT • SEPTEMBER 2014 Political Insight August 2014.indd 4 08/08/2014 11:56 Image © Press Association to the east. For sure this meant the introduction of the D-Mark and the reassertion of the primacy of private property, but it also meant the introduction of West Germany’s relatively generous social security system and protected labour market. In addition, the ‘Aufbau Ost’ programme facilitated a massive transfer of funds and expertise to the east. The wholesale introduction of the West German social model was explicitly designed to generate a convergence in living standards and thus prevent a mass migration from the eastern states, but it also aggravated their underlying lack of competitiveness. As economist Rainer Hillebrand has pointed out, the impact of this approach was mixed. On the one hand Gross Domestic Product per capita rose quickly from 45 per cent of that in the West in 1990 to over 70 per cent by 1996, there was a rapid build-up of capital stock and significant public investment in infrastructure. The quality of human capital in the eastern states is now comparable with those of the old Federal Republic. On the other hand, however, the convergence of GDP began to flatline towards the end of the decade and considerable structural weaknesses remain, including lower levels of research and development spending, lower value-added per worker and a subsequent over-reliance on standardised routine-based production. Unemployment also But it is worth remembering that things could potholed, façades of buildings were unpainted remains stubbornly higher in the east. have been very different – for Germany and for and often crumbling, and the air was thick Economic liberals might argue that the Europe. German unification was not a foregone with the fumes of the ubiquitous Trabant cars, citizens of the eastern states of Germany were conclusion and could have been derailed if, for as well as smog caused by the brown Lignite ill-served by these policies and that a more instance, Mikhail Gorbachev had not taken such that fuelled domestic coal ovens and factories laissez-faire approach might have allowed the a clear-eyed view of the limited prospects for alike. But if East Berlin was bad, the rest of East former East Germany to emerge from what maintaining Soviet dominance in Europe, or if Germany was in worse shape and as East and would have been a very rough transition US President George H.W. Bush or West German West Germany prepared for unification the period with a more genuinely innovative Chancellor Helmut Kohl had overplayed their extent of the former’s economic woes became and competitive industrial base. But the hands and pushed the Soviets into a corner. apparent. fear at the time was that such an approach At the same time some foreign commentators The legacy of the East German economic would not only lead to wholesale migration – such as the arch-Thatcherite Nicholas Ridley system was low productivity, an over-emphasis to the west but might spark a ‘race to the – were predicting a horror scenario of an on heavy industry and chronic bottlenecks and bottom’ across Germany, as firms moved east unreconstructed Germany once more seeking resource misallocations. German policymakers, to take advantage of lower levels of social to dominate Europe. So on this anniversary, it is however, did not respond with the kind of protection. This is certainly why the German worth evaluating the consequences of German economic shock treatment administered trades unions supported the policy and, unification for the German economy, for its elsewhere in Central and Eastern Europe after until the Hartz IV reforms of 2004-5, being domestic politics, and for its role in Europe and 1989. Rather than pursuing the quick fix of a fall poor and/or redundant in the former East the world. in real wages, German policy sought to invest in Germany remained arguably more endurable technology and expertise and stimulate a rapid than it would have been in Sheffield or Hull, Rebuilding the German economy rise in productivity instead. let alone Gdansk or Donetsk. This was the Anyone crossing from West to East Berlin in The aim of post-reunification German German social model in action and it eased autumn 1989 would have been struck by the economic policy was to transpose the entire the transition to a social market economy for sheer decrepitude of the place. Streets were institutional framework of the Federal Republic millions of Germans. SEPTEMBER 2014 • POLITICAL INSIGHT 5 Political Insight August 2014.indd 5 08/08/2014 11:56 Domestic Politics positive social rights over negative freedoms, out in the 1990s showed that East Germans The unification of Germany brought together the political direction of education, and the were far more likely (42.2 per cent of the two populations that had developed in distinct elimination of intermediate ties and inherited population) to be manual workers than were ways over the previous four decades. Following loyalties. Dahrendorf regarded these changes West Germans (35.9 per cent) and far less likely the defeat of the Third Reich in 1945, the two as irreversible and, although this has proved to be self-employed (6.5 per cent compared Germanys emerged four years later out of not to be the case, the residual impact of with 9.2 per cent). Conversely, there were the Allied occupation zones in response to Communist social reforms on the political significantly lower levels of civil servants (2 per the onset of the Cold War. Both Germanys dimension of the unification process was cent) and the self-employed (6.5 per cent) than inherited a common Nazi legacy but, whilst profound. From very early on in the process, it in the old West Germany (7.9 and 9.2 per cent West German society became increasingly became clear that East Germans were strangely respectively). Moreover, although the former open and tolerant over the intervening years, decoupled from the institutions and practices German Democratic Republic had traditionally in East Germany the effects of Nazi dictatorship of the new unified Germany. Some of this been a Protestant heartland, East Germans were compounded by 40 years of authoritarian disconnect was cognitive, which made it hard were far less likely (25 per cent of the total Communist rule. for elites to cultivate engagement with their population) to self-report as Protestant than Back in the 1960s, political sociologist Ralf new citizens, and some of it was down to a were their West German fellow citizens (43 per Dahrendorf called East Germany ‘the first sense of colonisation, in which the institutions cent) and much more likely to claim no religious modern society on German Soil’ in which of civil society were not indigenous but rather affiliation at all (69 per cent compared with 17 ‘the comrade has already won the day, and imported from the old West Germany and per cent).