The writer Günter Grass said In Paris during a congress on "Germany in limitless greed for profits". This is indeed the conclusion that has to be drawn from an analysis of the DELT
December 24, 1990 • #197 International Viewpoint common"
Europe" that he saw a "German danger" in the Anschluss:
"Behind each measure lurks a
GERMANY
SCHE social and economic HAARK consequences of the annexation of East Germany by the Federal
Republic of Germany. WINFRIED WOLF
N SEPTEMBER 27, 1990, less than a week before the Anschluss, Egon Hölder, then president of the Federal Statistical Bureau in Wiesbaden, and his colleague Arno Donda from the GDR's Statistical Bureau, presented together the "last annual balance-sheet of the two German states," and the first figures on the new Germany. Despite the decision taken by the government in Bonn in recent weeks to tread lightly and avoid all indiscreet propaganda on the strength of the Greater Germany, the figures speak eloquently for
Firstly, population and space. Germany has grown by some 108,000 km?, and is now Western Europe's third largest country, behind France and Spain. The population has grown from 62.6 millions in West Germany in 1989 to 79 million for the united state. This makes it the most populous country in the EEC. To this figure must be added the foreigners without political rights. They make up 5,037 million of the population - 6.4% of the total. Many of them have lived a long time in the country and, owing to this, and its social composition, this group contributes a proportionately larger share of the national surplus value than the average German with his Aryan passport.
This great human potential is a productive element from two points of view. Firstly, insofar as the population of Germany are wage workers or women assuring the reproduction of the labour force — for example through domestic work and unpaid childcare - they produce surplus value. This is a working class with an above average level of professional education, which means that the value created per hour is higher than in most other European countries. This can only increase the material basis of capitalist dreams.
Secondly, this population is also the largest national market in Europe. This means that an increased part of value and surplus value contained in goods will be realized on the national market, escaping the fluctuations of the world market.
The dominant position of the German economy can be clearly seen when one looks at the international figures. A united Germany represents a third of European production of steel. As for export of goods and capital, the new Germany will be — after about two years - as powerful as any two of its EEC "partners" combined In recent years the Federal Republic has already been neck-and-neck with the USA in this respect. The weakening of the economic position of the US at the same time as the reinforcement of the German economy through the Anschluss will, after a short period of adjustment, make Germany the dominant force on the world market, some way ahead of the USA and
Eastern opportunities
At the same time, there are two strategic aspects that need to be kept in mind: the opportunities for West German capital due to the defeat of the post-capitalist regimes in Eastern Europe and the Soviet Union, and at the same time the 1992 European single market project.
We do not here have the space to examine these two important issues, an awareness of which is essential to any analysis of the social and political consequences of the Anschluss, in a detailed manner.We will thus limit ourselves to the following points:
1. German imperialism will benefit more than its imperialist competitors from the downfall of the Warsaw Pact contries. Thanks to its geographical position, its more intensive commercial exchange and its numerous contacts in the East, it has the most favourable starting point. The next step in the penetration of German capital eastwards will involve developments such as: the building by German industry of hundreds of thousands of homes for members of the Red Army currently living in the ex-GDR; several billions of DMs in credits from German banks to the USSR; the possibility of Volkswagen swallowing up Skoda; the "aid programme" for the frontier regions of Western Poland, and above all for the German minorities in Poland, Romania, Czechoslovakia, and the Soviet Union.
2. In these conditions the "1992 European Community" will appear more and more as a project for the construction of an imperialist bastion under the leadership of the banks and German trusts. It is hard to say if the goals linked to the creation of the single EEC market will be reached. However, one thing is sure: every step forward for this project — elimination of customs, creation of obstacles around the EEC to the penetration of external capital, monetary union and so on - will be a step forward in the strengthening of German capitalism. But, even if there is significant resistance from other EEC states to particular points of the European project, it remains the fact that Greater Germany is strong enough to control an important part of the EEC, and on this basis, launch itself into new markets.
From the start of the unification project and, notably at the time of the shock therapy of monetary union, several efforts have been made to analyze this policy's social Corn made of an adventurist policy on the 13 consequences. Sometimes mention has
International Viewpoint #197 • December 24, 1990
GERMANY part of German finance capital?. appeared at the start of the year, or at the moment of monetary union, as a rather shaky prediction, has been a clearly visible prospect this autumn. "The truth is that, currently, there are 1.5 million unemployed in the GDR, although only 350,000 of these are officially registered and getting benefit. There are already a million workers on part-time, 90% of whom are not in fact working at all." These are the words of the President of the Association of the Unemployed in the ex-GDR ("DDR-Arbeitslosenverband")3. while — by mid-October — the number of registered unemployed receiving benefit ("Kurzarbeiten") working no hours, had reached two million. Thus the number of unemployed for the whole of Germany is some four million, without making the necessary normal upward adjustments to the official figures.
Massive unemployment
Now, the media are speaking openly about this — even if the whole truth will not be revealed until after the December 2 elections. According to the Berlin-based German Institute for Economic Research (DIW — Deutsche Institut für Wirtshchaftforschung), official unemployment in the ex-GDR will rise to 1.5 millions and part-time working to another million. Some 250,000 people will arrive on the West German labour market, where, confronted with two million unemployed, they will tend to accentuate unemployment in the West. Thus, according to the DIW, in 1991, the grand total of unemployed will be more than four million. This is backed up by other analyses.
Meanwhile, new figures have been presented by the Institute for Economic SciWirtschaftwissenschaften) and by the Central Academy/Institute for Economic Sciences in Berlin (East) in collaboration with Professor Peter Fleisser from Vienna. Their analysis has the advantage of taking into account predicted Western investment in the ex-GDR as well as expected aid from Bonn. These people are not apologists for the ex-GDR. One can read in their document such things as the following: "in an independent republic [of the ex-GDR] the situation worse. The growing losses would have led in a few years to economic collapse."
Here are their predictions:
1. By the end of 1991 the number of unemployed in the ex-GDR will reach 3.5
2. This is only "one aspect of the labour market". The old will be sent home, to make up a "quiet reserve"
3. In particular we will see the "departure to the blessed west of the skilled 14 workers." According to the IWW analysts, ' more than a million people will emigrate to western Germany until 1994.
4. Unemployment will hit hardest in the combines of the ex-GDR. Of their 8.5 million jobs, only 4.7 million will remain at the end of 1991. In this sector, the unemployment rate will thus be 42%4.
5. Equally alarming figures are produced for the sectors of public administration and agriculture. About a half of the 1.74 million jobs in the ex-GDR's public administration - leaving aside post and railways — will go. Agriculture will be even worse affected. Of 840,00 jobs at the start of 1990, the plan is to get rid of between half and two thirds (600,000). 6
The IWW study at the same time underlines an enormous growth in productivity in the ex-GDR. In 1994 it will have risen by 76%. Even this would leave a "deficit of 46.6% in comparison with the western Länder", above all due to the mass emigra-
Western aid is expected to be nothing more than "a stimulus for investment" The study foresees the possibility of a "supplementary investment" of 200,000 billion DMs between 1991 and 1993. This would mean the creation of 680,000 jobs. In this (optimistic) scenario, unemployment in the ex-GDR would be "limited" to
In this context, these experts emphasize that any significant investment in east Germany would only yield results after several years. For example, Volkswagen foresees the production of about 250,000 Golf cars a year in the Mosel factories, near Zwickau. But this objective will not be reached until 1994.
Wirtshaftswoche ("Economic Weekly") summarizes this study under the title "Painful medicine".
All these analyses refer more or less directly to two factors — the evolution of the world economy and the explosive
Almost no economist now denies that 1990 will mark the end of the seven-year long period of growth. Recession had set in the United States at the start of the year. The car sector has gone into recession on a world scale (with the exception of West Germany). The Gulf crisis has accelerated this evolution, making the banks' difficulties worse and leading to stock-market falls worse than the most pessimistic forecasts. "All the industrial countries are threatened with falling into declares Professor Wilhelm Hankel, ex1. See Törk Hansen: "Zerstörungskraft des Marktes", SoZ, no. 11, 1990. zukommı...", Beilage April 4, 1990, or Karl-Heinz Roth in the review Konkret, no. 10, 1990. 3. See Neues Deutschland, September 3, 1990. 4. All the IWW studies can be found in Wirtshafts5. See Stern, no. 36, 1990. 6. See Die Tageszeitung, September 8, 1990. 7. Stern, no. 43, 1990. 8. Here are some figures that give the general idea: the FRG's debt, which was DM692bn in 1982, had reached DM1000bn by 1989. This debt as a proportion chief of the Hessischen Landesbank. In his view, the present situation is marked by a "dangerous recessionary potential". He goes so far as the prophesy that this will be true for more or less all the Western industrial nations, with one exception, Germany. Here, the "reunification of the two economies will mean an exceptional counter-cyclical programme of about 100 bil-
"this" has already been seen at the start of the 1980s, when Ronald Reagan launched the rearmament programme and doubled the state deficit.
It is worth pointing out at this juncture that one can scarcely anticipate that, with the coming of an international recession, the country which holds the best place on the world market should come out of it the best. At the very least one must foresee the evolution of the world economy having negative effects on German social and eco-
Financial risks
Another element of risk is embodied in the quotation from Hankel and in my comparison with American economic policy in the 1980s. Germany's state budget is threatened with a financial crisis. In 1990, despite declarations about a "policy of stability", the Bonn government has turned in twice the predicted debt, and this has already had important financial consequences. The debt - which was forecast for 25.8 billion marks — in fact reached 57 billion in 1990. The IWW economists predict a financial deficit of at least 75 billion
"supplementary investment" which we mentioned earlier occurs, then the financial hole will amount to 90 billion in 1991 and almost 100 billion in 1992. If we remember that the idea is to turn the ex-GDR into a "tax-free oasis" (Steueroase), it becomes clear that this financial black hole will be very difficult to overcome. Furthermore, the figures do not include the additional state debts incurred through the "Fund for German Unity" which add up to another 100 billion marks. For the moment this money is "hidden" somewhere, in the same way that the American government "hid" the additional debts accruing from the collapse of the Savings and Loans. A dramatic increase in state debt cannot only be explained by allusions to the increase in size of the national state. The increase in gross national prodof GNP - the most important figure - had risen from 43.3% to 49.6%. If the new debt decided on in Bonn for the next three years — leaving aside that of the Länder, the municipalities, the post and telecommunications and the railways grows each year by between DM75bn and DM90bn, by 1993 another DM250bn will have been added onto the total budget deficit. This is equivalent to an increase in the debt by a quarter of the total rise over the past 40 years. The proportion of this debt to GNP will go from 50% to 80% in 1993. By way of comparison, in Italy and Greece the proportion of public debt to GNP is over 100%. See E. Mandel/W. Wolf: Cash, crash and cri sis, Hamburg, 1989, pp. 87 and 147.
December 24, 1990 • #197 Internationa/ Viewpoint uct does not compare with the doubling, let alone the quadrupling of the state debt -and this for a period of at least three years.
Without going more deeply into this aspect of the problem, the following conclusion can be drawn — in the framework of the annexation policy, the federal government is following an adventurist debt policy of a kind already followed by the Greek, Italian and US governments, and which have led the finances of these states to the edge of the abyss®.
These social and economic consequences of the Anschluss are the logical result of the "destructive force of the market". The extension of this economic policy into a ing each camera to the tune of 200 marks. The price of a Praktika is between 200 and 400 marks. That is to say, for the resources that society is going to spend on unemployment benefit, this firm could produce cameras and give them away.
Evidently, a transition programme would demand considerable investments and measures of adaptation with important consequences on the social level. In principle, such a policy would not contradict a non-social market economy, as has been shown in such sectors as agriculture, steel and construction. But it does contra-
GERMANY / EL SALVADOR dict the annexation policy that is concretely being followed
Can one draw conclusions from this analysis? The balance-sheet is gloomy. It is quite clear that the tendencies unleashed in the ex-GDR will have negative effects in the West, above all on the workers' movement and other emancipatory movements. I will spare the reader the usual "lines of march for possible resistance." Providing that would need a much better idea of the reactions and discussions going on amongst those directly affected. *