The German reunification was preceded by a deep social, economic and political crises in the GDR, which had been developing for the last 4 years before 1990 and led to a rapid pace of uniting East and West Germany during one year, from October 1989 to October 1990, when on the political map of Europe, a new joint Germany with 78 million population emerged.
Difficulties of the unification process revealed very soon after the fall of the Berlin Wall, as well as the political, economic, social and psychological differences of East and West Germany, which proved to be more persistent than it was previously expected. Nowadays, it is considered by many that it was not a reunification, but an annexation (“Anschluss”) instead. Even more, “today, 20 years later, all the surveys in the east show that 50 percent of the people don’t feel like they’re part of united Germany – in their minds and their hearts” (Kirschbaum).
Creation of market economy instead of state-planned one became almost impossible task for many East Germans, due to lack of knowledge of the West German laws and regulations. The sudden opening of the border caused a massive exodus, which had extremely negative consequences for the East Germany and continued even after the nominal unification of the two German economies in July 1, 1990. Mostly, young and more active people were leaving. “More than 10% of the population has moved to the West since 1989” (Faustmann).
The unification of Germany did not mean convergence of the two economies (in other words, their approach based on mutual adaptation and combinations of typical for each of the two states singularities). The GDR was simply incorporated into the FRG.
After the reunification of the country, the lack of competitiveness of the East German industry quickly revealed. First in the list of closed enterprises were brown coal quarries and mines (about a third of them, the most polluting, was eliminated), as well as nuclear power plants, steel and automotive plants, chemical processing plants, etc..
The GDR did not know what unemployment was before 1990, however, in the united Germany, it became commonplace, which especially badly hurt the East due to staff cuts, elimination of unprofitable enterprises, due to weaker labor discipline, etc. The officially announced unemployment rate (about 13%) was significantly lower than it was in reality (Burda, Hunt 2) Unemployment badly affected not only industrial workers: victims of the "employment deprivation" in East Germany were also those active in the service industry – from teachers in universities to educators in kindergartens. To find a job in East Germany was impossible, as a result, for a couple of years ahead Eastern part of the reunited Germany became a place of cheap labor for the Western part of the country. Unemployment was reduced only by the introduction of part-time work, providing the right to earlier retirement, by creating new jobs, public employment, retraining of workers, etc. Development of medium and small businesses also brought some positive results. By 1994, about 20% of the self-active population of Germany was employed in enterprises, the number of employees of which did not exceed 5 people. By 2006, unemployment was still “about double as high as in the West trailing around 17%” (Faustmann).
Restoration of German unity was accompanied for the residents of the GDR with significant increases in prices of food and other goods, a significant increase in utility bills and the cost of transportation in public transport. Numerous benefits ordinary to the socialistic way of life in the GDR were cancelled. All this caused disappointment among the East Germans, especially the older generation.
During the process of privatization virtually every company faced real difficulties. Enterprises could not even be sure that they would be the legit owners of the purchase: in accordance with the Basic Law of the FRG, the state guaranteed rights of the former owners. Expropriated in the former GDR enterprises, land, buildings could often be immediately claimed back by many of the former owners or their heirs.
Extremely acute was a problem of property in the housing sector. Tenants paying during 40 years a fixed fee to the municipal authorities for accommodation then got to know the true owners from the western lands of the apartments. Something similar happened in agriculture, as well.
The question about the capital of the newly reunited state arose also. “Either Bonn or reunited Berlin, that served as the capital of Germany before the World War II” was on everyday agenda of political debates, and after fierce parliamentary discussions and serious disagreements within the governmental circles was resolved in favor of Berlin.
The specially created agency for foreign refugees could not solve the problem of housing, employment of immigrants. Feelings towards reunification in the former FRG were often not optimistic. It led to an explosion of violence on the part of the West German racists, so-called skinheads, whose violence was directed against immigrants. The whole country was worried about that considering in actions of radicals their pre-war past. This led to numerous anti-racist demonstrations all over the country.
It should be mentioned that the reunification was exacerbated with the loss of markets in the former Soviet Union, which was occupying a dominant place in the foreign trade of the GDR (almost half of the turnover). For comparison, the share of West Germany in the turnover amounted in the same year was seven percent.
In my book, it was impossible to fully avoid the negative effects of reunification, as the differences between both states, both systems – capitalistic and socialistic were rather drastic. However, if the unification was more steady, when larger number of working places was created, better guaranties for new property owners guaranteed and larger reimbursements to the previous owners paid off, that would better affect the entrance of the post-communistic GDR into the world of capitalism and democracy.
In terms of foreign policy, the path to German unity was through the agreement of the victorious powers in the World War II. May 5, 1990 in Bonn, talks with the formula "two plus four" German unity began. Their participants were Ministers of Foreign Affairs of the two German states and the "four powers-winners" (the USA, the USSR, France and the UK). The "two plus four" agreement dated September 12, 1990 opened the way for Germany to achieve its full sovereignty. Talks in the format of "two plus four" went down in history as a bright example of diplomacy when in the shortest possible term the parties managed to resolve the problems that existed during the entire period of history.
Officially, the treaty is called "The Treaty on the Final Settlement with Respect to Germany". Signed in Moscow, September 12, it represented the complete transfer of full sovereignty to the united Germany from October 3 of the same year in all its internal and external affairs.
For sure, four powers had their interest during the negotiation process. The USSR strived to leave Germany in the sphere of its interests, as it was a large market in terms of economy and it was an ally during the “Cold war”. Gorbachev`s “Glasnost”, “New Thinking” made reunification of Germany possible. The USSR lost its satellite on the other side of the USSR border, and it was, in my opinion, the main reason for Soviet defeat in the “Cola war” and, consequently for the USSR dissolution. Moreover, the Treaty prescribed the USSR to withdraw troops by the end of 1994, what happened even earlier, when independent Russian Federation withdrew its last military units. The Western Allies (the UK, the USA and France) had practically the same objectives towards newly reunited Germany, as well as the USSR. All of them wanted to save the economic market of Germany – and they benefited from it much greater than the USSR, which was not able to provide competitive goods to the West, except power resources. One of the provisions of the Treaty was that foreign troops and nuclear weapons or their carriers would not be stationed and deployed on the territory of the former GDR. It may look like the Western Powers signed this treaty undermining own strategic military positions. However, in reality it was the opposite. Germany remained as a member of NATO, but with new territory of Eastern lands within its borders. Consequently, NATO forces were legitimate to be deployed on the vast terrains of newly united country.
Bibow, Jorg. The Economic Consequences of German Unification:The Impact of Misguided Macroeconomic Policies. Levy Economics Institute. 2001. Web. 10 Mar. 2014. PDF file. http://www.levyinstitute.org/pubs/hili67a.pdf
Burda, C. Michael, and Jennifer Hunt. From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany. Brookings. 2001. Web. 09 Mar. 2014. PDF file. http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/2001_2_bpea_papers/2001b_bpea_burda.pdf
Donnelly, L. Saraid. "Sell or Slaughter": The Economic and Social Policies of German Reunification. Claremont Colleges. 03 Dec. 2012. Web. 10 Mar. 2014. PDF file. http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1548&context=cmc_theses
Faustmann, Hubert. Challenges of Reunification: The Case of Germany. Academia.edu. n.d. Web. 11 Mar. 2014. http://www.academia.edu/367075/Challenges_of_Reunification_The_Case_of_Germany
Kirschbaum, Erik. The dark side of German reunification. Reuters. 29 Sep. 2010 Web. 11 Mar. 2014 http://blogs.reuters.com/global/2010/09/29/the-dark-side-of-german-reunification/