Economics

Germany’s Divided Soul

Sep 2, 2019 Dalia Marin

Eastern Germans vote, think, and feel differently than western Germans do, as the results of the September 1 regional elections make clear. To help tackle the underlying economic causes of this divide, the federal government should introduce incentives to encourage foreign investment in the east of the country.

MUNICH – This November, Germany will celebrate the 30th anniversary of the fall of the Berlin Wall. But the country is in a gloomy mood, and cheers will be few and far between – especially in the east.

Today, more than one-third of eastern Germans describe themselves as second-class citizens. Contrary to their expectations at the time of German reunification in 1990, the east of the country has not become as prosperous as the west. Unsurprisingly, eastern Germans today think, feel, and vote differently than western Germans do. In fact, Germany is one country with two souls.

The latest evidence of this came on September 1, when the xenophobic right-wing Alternative für Deutschland (AfD) secured a strong second place in regional elections in the eastern German states of Saxony and Brandenburg, with 27.5% and 23.5% of the vote, respectively. In western German states, the AfD’s electoral share is typically half of that.

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Daniel Esmond Sep 12, 2019

The rise of the AfD cannot be dissociated from the influx of refugees. It is debatable whether that is the primary cause or whether the lack of convergence and disparities in living standards between the East and the West.
Similar suggestions were made about the rise of populists in Hungary, Poland and even the Czech Republic as in all of these countries convergence with the old EU member states was very disappointing. Add to that the lack of any cushioning of structural reforms that East Germans have nevertheless received from the Federal Government. And still the majority of the new EU members below 75% of EU average, despite decades of painful reforms. While this could have created the conditions for the uptake of populist and nationalist messages, the arguments of these populists were more often based on cultural grievances, anti-immigration sentiments, although the disparity between East and West was there, too.
In short, I would be really careful with an economic determinist argument and would always contextualise it.
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j. von Hettlingen Sep 2, 2019

Dalia Marin explains why Germany after 30 years of reunification is still a “divided soul,” and why East Germans voted for the far-right in yesterday’s regional elections in Saxony and Brandenburg. They also “think, and feel differently” than West Germans. According to a recent Allensbach Institute survey, voters in places like Brandenburg and Saxony once again feel distinctly “Eastern”. Over 70% of West Germans simply feel “German,” while in the East, that was true of only 44%.
One would have thought that East Germans would embrace liberal democracy after four decades of totalitarian rule. Yet a historian, Ilko-Sascha Kowalczuk, argued that the revolution that brought down the Berlin Wall on November 9, 1989 was rather driven by a small number of activists, and that many “ordinary citizens” were simply bystanders, watching from behind the Iron Curtain and waited to see what happened next.
The author believes the federal government “should introduce incentives to encourage foreign investment” in the East of the country. This will help bridge the economic divide, bringing not only “material benefits,” but boosting the population’s self-esteem, and healing the national psyche. The feeling that they have “nothing to sell,” and can not move away from a “low-value manufacturing sector” that contributes to GPD growth gives them a sense of “having no value” in this capitalist economy.
In a meritocratic society, this “feeling of worthlessness” has a “detrimental effect” on dignity. They vote for “extremist parties that prey on their fears” and grievances, because they feel left behind by the federal government in Berlin.
East Germans represent around one-fifth of the population, with perhaps 5% of them in the top echelons of politics, business, science, culture and media, etc. Since the 1991 reunification only three East Germans – including Angela Merkel – served the federal government. Merkel grew up in the East but her current cabinet consists of West Germans. Three von 336 federal judges, 2 of 200 generals and only 3 of 190 corporate bosses came from East Germany.
The same is true for the media and the academic world. Nearly all professors in East German universities such as Leipzig and Dresden, and editors, are West Germans. After the reunification, many from East Germany found themselves lacking qualifications to compete in job markets. Others were sacked because of their links with the communist party and the Stasi. But 30 years on, sociologists point out that social mobility in Germany is worse than in the US, and the elite mostly promote people who share their upbringing and same experiences.
The author says the government’s “biggest mistake” was to dismantle the Treuhandanstalt after “all the eastern assets were sold.” The Treuhandanstalt was an agency established in June 1990 by the East German communist regime before the reunification to privatise collective enterprises and offer subsidies to foreign firms willing to invest in eastern Germany. It oversaw the restructuring and selling of about 8,500 state-owned companies with over four million employees.
Its operations drew criticism from some quarters for unnecessarily closing allegedly profitable businesses, misuse and waste of funds and layoffs that were claimed to be unnecessary. It also drew substantial protests from the workforces affected, as 2.5 million out of 4 million employees in state-owned enterprises were laid off in the early 1990s. When its operations ended in 1994, it had amassed 260 to 270 billion DM in debt.
The author says the government today is making efforts to revamp economy in eastern part of the country, creating living conditions that match those of West Germany. Not only does it take time to narrow the economic divide, but also the ideological one. Perhaps in another 30 years Germany would be more umited.
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