Treuhandanstalt

September 16, 1993, was a day like many others in front of the huge headquarters of the Treuhandanstalt in Berlin. Once again, protesters marched in front of the main entrance in the Wilhelmstraße. With 300 people, the rally was manageable – and yet a special one. Miners from Bischofferode in Thuringia made up its core. They fiercely resisted the closure of their potash mine and received worldwide attention for it. They had occupied the mine, about a dozen of them had gone on a hunger strike. And a handful of them walked the nearly 300-kilometre route from Eichsfeld to the city on the river Spree. They wanted, as they said, “to do to the Treuhand what it has been doing in East Germany for the past three years: flatten it.”

“Plattmachen”, in English “flatten it”, is the colloquial expression for the closure of companies. All too often, the Treuhandanstalt saw no alternative. Yet the agency, created in the summer of 1990 by the first freely elected GDR parliament, pursued a completely different goal: it was to transfer almost 8,000 companies of the centrally controlled GDR economy with around four million employees into the market economy. What had previously been controlled by the state party SED was to be transferred into private hands. The mostly West German buyers committed themselves to invest money and preserve jobs. Most of them received initial aid from the Treuhand.

Many expected the GDR to experience an economic upswing like West Germany in the 1950s. A director of the Treuhand, however, said: “Everyone knew that almost everything was scrap. ... Everything had collapsed.” What the outdated factories produced became largely unsellable on July 1, 1990. From that day on, D-Mark prices applied in the GDR for raw materials and wages as well as for finished products. Due to the increased costs, the previous sales markets, especially in Eastern Europe, collapsed.

Soon, the initial optimism turned into despair. All too often, debts, unresolved ownership issues, poisoned soil and poor economic prospects were arguments against the privatisation of many companies. One in three companies was closed. Even many committed new owners could not avoid layoffs. On average, seven out of ten employees lost their jobs, partly because the GDR factories produced relatively little with a large workforce. In addition, overstrained, sometimes greedy or also fraudulent investors did not respect the agreements and closed companies.
Because of the dramatic mass unemployment, the work of the Treuhand is still very controversial today. For one of the Treuhand managers, it is clear that the anger did not reach the right people: “Basically, this is all anger that should be directed against the economic management of the former GDR and against the economic policy that was wrongly pursued for 30, 40 years.”