Each working day, there are half a million East Germans working in West Germany. They either commute daily between their homes and their workplace or are transported to West Germany at the start of the working week before being taken back to the East on Friday afternoon.
The "Annexation-profit"
If we recall that in 1990 and 1991 the former East German economy experienced a drop of about a third compared to 1989, we can get some idea of the size of the "Annexation-profit" reaped by the
West German economy. This, and this alone, explains the relatively stable situation of that economy until 1991.
Another advantage for the West should be added: West Germany and the West could not not profit from the collapse of the East German economy. Simultaneously, the death of the GDR made a decisive contribution to the deepening of the crisis in the Soviet Union and Eastern Europe.
If West Germany had swallowed up
Austria and run riot there in the same fashion, this also would have been a plus
GERMANY for West German business. But the advantages would have been of a more relative kind since a significant part of the Austrian economy is already under the control of German capital, so that for firms such
Daimler and BMW policy would have been partly cannibalis-
But this would be a zero sum game for the West. Insofar as the German economy grew at the expense of the Austrian, the Austrian economy would slip down the ladder of the Western world market.
The ex-GDR is quite another matter. This economy was almost completely turned towards the East. In this sphere it was at once the economy with the highest level of productive forces and the site of a series of key industries which were decisive for the existence of the whole Comecon bloc (for example, Robotron for computers or Zeiss-Jena for the military and space travel sector). The loss of East Germany was thus one of the decisive blows, if not the decisive one, against the Soviet economy. We can explain this in mirror image: if from one year to the next Japan disappeared as a motor force for Western industry and, for example, Japanese semi-conductor technology was no longer available, this would have enormous effects on the West, especially if, as was the case in the East in 1989/90, there was already a critically delicate economic situation.
The "divided conjuncture" is most apparent in the social sector. The number of those officially out of work in West
Germany fell from 2.2 million at the start of 1990 to 1.62 million in November
1991. Simultaneously, unemployment in the East rose from an estimated 200,000 at the start of 1990 to 1.03 million in
November 1991. The number of those on short-time was 204,000 in the West at the end of 1991 when in the newly obtained
*This article first appeared in the December 19, 1991, issue of Sozialistische Zeitung, the paper of the German United Socialist Party (VSP). March 2, 1992• #223 International Viewpoint
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9
GERMANY / LATIN AMERICA regions it had already passed the million mark. Since most of those on short time in the East should be considered as concealed unemployed (often with a reduction in the working week of 90%), and since there were at the same time in the
East more than 300,000 people being kept above water by so-called Work Creation
Schemes (ABM), it is quite reasonable to calculate unemployment there by adding those without work to those on short time, to arrive at a figure for 2.1 million in
November 1991.
Thus, by the end of 1991, all-German unemployment was around four million
—1.65 in the West, 1.03 in the East plus
1.1 in the East on short time plus some of the 200,000 on short time in the West -
(November 1991 figures).
These are meaningful figures with significant consequences for society, since they imply high costs for the really existing bourgeois state and patriarchal society. All manner of social benefits must be paid for the unemployed and those on short time. If a gold label is stuck on a part of the misery under capitalism, this does not mean that all poverty is thus "decorated". In the case of the former GDR, this is especially crass. Bonn — or in this case the statistics' office in Wiesbaden - have until now published the unemployment figures for East and West but the employment figures for the West only. So what in fact is the jobs situation in the East? This figure has been spirited away.
Loss of five million jobs
The reason for this is no mystery: since the start of 1991, over five million jobs have been lost in the former GDR. The discrepancy between the one million officially recorded unemployed in the East (and the 1.1 on short time) and the over five million lost jobs is explained by the classical methods for concealing unemployment under capitalism: hundreds of thousands have taken "early retirement", some 300,000 are on schemes that provide pseudo-employment, and, above all, some 1.5 million women have lost their jobs without being recorded as unemployed or on short time. Even if they now sweat away in the home, looking after men and children, they do not appear in the figures as economically active since they do not receive a wage.
As the Wirtshaftswoche headlined at the end of 1991 (December 11, 1991): "Traffic lights at orange; will five million Germans soon be unemployed?" In fact, since October 1991 the number of jobless and above all of those on short time has been rising in West Germany. At the end of 1991 and the start of this year at least a further 500,000 jobs are to go in East Germany. The trend towards crisis in West Germany is unmistakable. "A new tide of redundancies threatens Nordrhein10 Westfalen.... In the coal-mining regions, more than 30,000 jobs are set to go in the International Viewpoint #223 • March 2, 1992 next few years, while leading steel producers Thyssen will shed 2,000 workers this year", according to the Wirtschaftswoche. In particular, the tendencies to crisis are unmistakable in South Germany — and Bayern — hitherto seen as immune, where the region's flagship companies are to lay off thousands in coming
Just as in the USA, the Bonn government's possibilities for counteracting a crisis are limited. As we have explained many times, "the [German] budget deficit has exploded", according to a headline in the Süddeutsche Zeitung (November 27,
1991). Briefly put, according to existing financial plans, the German budget deficit is set to rise from 1000 billion D-marks in
1989 to at least 1,700 billion by 1995 if all the different headings which conceal this debt are added together.
This is so high relative to the Gross
National Product (GNP) that in 1995 Germany will not meet the criteria for membership of the European Currency Union
— in any case not if the decisions agreed on at Maastricht are adhered to.
Cessation of Soviet interest payments
There is at least one additional factor reducing the Bonn government's room for financial manoeuvre: the collapse of the USSR and the cessation of interest and principal repayments by Moscow will lose the West German economy some 40 billion D-marks and Bonn - the housekeeper — some 30 billion.
And what about if the Deutsche Bank and its government in Bonn have nothing against a crisis? If they consciously seck one in pursuit of their class objectives? This would be nothing more than a completion and continuation of the all-ornothing policy employed in 1990/91 to the former GDR. Germany's social security system cannot maintain its existing standards in the face of four or five million unemployed. "Higher pension contri"unification makes holes in the pockets of the social funds" according to headlines in the Süddeutsche Zeitung from the end of last year (September 24 and November
The fact is that the German federal bank at its meeting on December 5, 1991 declared its intention to reaffirm "the tight monetary line". In these parts this means in the first place the "blocking of inflation". In this respect the bank is out of synch with the rest: in the USA and Japan the national banks have set record lows for discount rates, while in Germany these rates are at a record high. This means, credit for entrepreneurs is more expensive, construction is being suffocated and private consumption cut. And this is a course tending towards an acceleration of the crisis. *
Economic change and social turmoil
IN CONTRAST to the poor economic results of the member countries of the Organization for Economic Cooperation and Development (OECD) and particularly of the United States, the growth rates of Latin American countries (an average of 3%) In 1991 seem to prove the point of those who have been announcing the end of the "lost decade" - the term used by the United Nation's Economic Commission for Latin America (CEPAL) to describe the past perlod on the continent. 'We are confident because this year [1991] the region has been capable of renewed growth. Apparently, the process of recession has begun to dissipate and the 1990s are starting well* , declared CEPAL's general secretary Gert Rosenthal In mid-December 1991. After the catastrophic results of the past decade It Is indeed easy to get carried away with optimism, but one should also beware of appearances. ALFONSO MORO
HE new model of
T accumulation of
Latin
American capitalism in the
1990s is based on the following elements:
• Since June 1990, the
Latin American governbourgeoisies and ments have been polarized by the
"Initiative for the Americas" launched by US president George
Bush, to which all the subcontinent's regimes have in fact rallied.
•
The "reform of the state" - which represents a double qualitative change in the relations between the state and the economy and between the state and the mass movement - is a process well under way throughout the region.
Nationalism has been more or less dethroned by neoliberalism.
• Throughout the whole of Latin
America, the adjustment programmes of the International Monetary Fund (IMF)
and the World Bank (WB) have been developed and extended: with the drastic application of austerity policies; monetary control; and the extension of proof privatization for state grammes enterprises and property.
• Social and political instability persist, although inflation has considerably lessened and, in 1991, the majority of countries have experienced positive real growth rates.
• The foreign debt, even if it is no longer front page news, remains a problem that it is essential to resolve.
• The form of bourgeois domination that has existed since the 1940s has been in crisis for a long time, and, for the moment at least, no long term alternative project has been consolidated.
• Capitalist restructuring has produced a profound reorganization of the situation of labour. The workers are confronted by an offensive strategy of destructuring and deregulation. All their historic, social and economic gains are being challenged, starting with their forms of organization.
This restructuring is affecting the whole of society.
The process of globalization of the world capitalist economy and the formation of new regional economic blocs is also affecting Latin America. The Initiative for the Americas is an illustration of the new politico-economic schema for the region on the eve of the year 2000.
The paradise promised by Bush, where free exchange will occur without obstacles, is beginning to take shape.
Bilateral and multilateral agreements between governments are being signed at a frenetic pace: in 1992 the Free Trade
Treaty is to be signed between Canada, the USA and Mexico; similar agreements are to be signed to bring into being the Mercosur in the Southern Cone, a free trade zone of the Andes, a Central American Common Market and another in the Caribbean and so on.2
The US president himself told the press after his visit to the Far East: "I took our enthusiasm for the Free Trade Treaty to the other side of the Pacific and I showed how it could contribute to the prosperity of all by removing trade barriers."3