Initially, there was a distinct power asymmetry between East and West Germany, which later became blurred. After the fall of the Berlin Wall, it was clear at every encounter between the bulky, towering Helmut Kohl and the short, slight Lothar de Maizière (the last premier of the GDR) which of the two had the last word. Because German unification de facto entailed the extension of West Germany, “the East” (as the former GDR was commonly known) became defunct, and served at most as a negative point of reference. The unequal relationship between the two parts of Germany gave rise to stereotypical perceptions of those who inhabited them. In the eastern part, there were Ossis, perceived mainly as sad, dejected figures, not the courageous protesters or revolutionaries of fall 1989. In the other part, there were Wessis, the embodiment of overbearing, know-it-all boastfulness, who were fickle and untrustworthy.
The frustration and mutual recriminations rapidly intensified from 1990, fueled to a large extent by resentment of the financial cost of unification, which the population gradually came to notice. In spring 1991, the German government raised the statutory unemployment insurance contribution by 2.5 percent. Exactly one year after currency union, it introduced a “solidarity tax” on income (the Solidaritätszuschlag, commonly known as the Soli), along with a corporate income tax and other new taxes. In this way, German taxpayers cofinanced German unity. Many West Germans were under the impression that only they were paying the soli for East Germany. But the tax was of course levied in all German states, including the five new ones. In a sense, then, East Germans were required to show solidarity with themselves.
In early 1994, social security costs increased again when pension contributions were raised by 1.7 percent. As the West German media pointed out, around one hundred billion marks flowed from West Germany to East Germany each year. Resentment grew among the West German population, less on account of the sums transferred, which remained rather abstract in the popular perception, than the sense that the payments were for nothing, and that the supposed recipients lacked gratitude.
In this context, the stereotypes of the Jammerossi and the Besserwessi crystallized in the late nineties (see fig. 9.3). Such antagonisms may appear ridiculous today, but they were the source of serious dispute at the time. The conservative coalition party CSU threatened to stop transfer payments to the former GDR if so much of the East German population continued to vote PDS, the socialist successor party. Former German Chancellor Helmut Schmidt reprimanded the East Germans for their querulous behavior in an interview with Der Spiegel. Succumbing to a brief fit of rage, he said their “constant moaning … makes me vomit,” and pointed out that women in East Germany received higher pensions on average than West German females.33 This was because women’s employment had been higher in the GDR, which Schmidt and his interviewer refrained from mentioning, no doubt to avoid addressing the thorny issue of gender inequality.
Fig. 9.3. “Stop whining, people will think you’re an Ossi!” Jammerossi caricature by Reiner Schwalme, 1990.
In 1998’s election campaign, Gerhard Schröder pledged to make the reconstruction of East Germany his personal priority. In the summers of 2000 and 2001, he spent several weeks touring the new German states, talking to the locals about their concerns. As someone who had known hard times as a child, Schröder was probably an empathetic listener. He praised the East Germans’ lifetime achievements and tried to exude a sense of optimism. But his own administration’s Hartz laws put a particularly tight squeeze on East Germany, where a much larger proportion of the total population was affected than in West Germany. On the other hand, ever since the collapse of communism East Germany had had far fewer regular jobs ensuring full entitlement to unemployment benefits. Therefore the changes resulting from the Hartz laws were not as unsettling in the East as they were in the West. In effect, a fledgling low-pay sector also existed there previously, as standard wage rates were rarely paid in a number of branches of the economy. As the labor market reforms brought conditions in West Germany into line with those in the East, earlier preconceptions gradually started to dissolve.
Paradoxically, the growing gap between rich and poor thus helped the two parts of Germany to grow together and to approach the politically desired “inner unity.” As Hartz IV and the fate of the unemployed affected the entire country, the differences between East and West faded into the background. One might say that the reforms did more to equalize Ossis and Wessis than did the welfare payments of the nineties. It was now clear that East Germans were not just staying at home and waiting for benefits from the West. The over two million East-West migrants and the four hundred thousand commuters (in 2000) were living proof of that. Gradually, prejudices were replaced by respect. This was evident, for instance, in the fact that the “Ossi” tag was increasingly dropped in favor of the more neutral Ostdeutsche (“East Germans”).
Angela Merkel’s election to the post of CDU chairperson also altered intra-German stereotypes, and balanced the power asymmetry between West and East. Merkel was the first woman and the first East German to become chairperson of a large political party. But she did not shout it from the rooftops. Merkel proceeded like most other migrants to the West and aimed to fit in by acting inconspicuously. In 2002, East German sociologist Wolfgang Engler published the insightful book Die Ostdeutschen als Avantgarde.34 It paints the scenario of a postindustrial society that runs out of work, making reference to the East Germans’ creative approach to coping with job insecurity and short-term contracts. Gerhard Schröder, meanwhile, had a more traditional working society in mind when, in a speech given in 2004, he described the East Germans as “willing to work and flexible” and commended their “tremendous achievements” since unification.35
Some of the East German elites took up this thread to weave their own neoliberal discourse. For instance, when Chancellor Schröder visited a successfully modernized former collectivized farm in the East German state of Brandenburg, the manager defiantly announced that “nobody in the West can tell us our people are not flexible or mobile.”36 The prime minister of Brandenburg, Matthias Platzeck, who later rose to become SPD chairperson, tried in a similar way to build the East Germans’ confidence. He maintained that the East Germans had “overcome tremendous upheavals in the last two decades. [They had] worked longer than others and travelled longer distances to find work—not because they are better people, but because the circumstances forced them to.”37 Whenever the East Germans’ adaptability and willingness to work was stressed, the West Germans were effectively called on to do likewise and accept reforms and social cuts. Cotransformation, then, took place on a discursive and social policy level, and was rooted in the transformation crisis that affected East Germany before the rest of the country.
Angela Merkel, the future first female chancellor, refrained from public reevaluations of her fellow East Germans. But she knew from personal experience what it was like to go through the upheavals of 1989 and the ensuing transformation. She had been working as a chemist at the Academy of Sciences of the GDR before the revolution. State-related institutions such as this were particularly vulnerable to dismissals and restructuring, partly for political reasons and partly because their research departments became superfluous. Under these circumstances, it was a smart move to look for a different job. In late 1989, Merkel took on a post as system administrator for the oppositional party Demokratischer Aufbruch, initially on a voluntary basis—that is to say, in a civil society context—later rising to executive. The party disintegrated after its chairman became embroiled in a Stasi (communist secret service) scandal in spring 1990. Nevertheless, Merkel secured a position as deputy spokesperson for the last GDR government, thus entering the public relations sector. A short time later, she joined the CDU, was voted into the Bundestag, and rose to become a minister in Helmut Kohl’s government. Merkel’s professional trajectory from chemist to system administrator, public relations woman, and politician was propelled by flexibility and mobility. Thus she was able to support the CDU’s reform program of 2003 with convictions drawn from her own experiences. However, the party’s near-defeat at the parliamentary elections of 2005 showed that the majority of voters were not convinced. So Merkel once again demonstrated flexibility and softened some details of the neoliberal reform program. Basically, however, she continued Schröder’s political course, and did not revoke any laws that had already been enacted.
Although Angela Merkel’s motivation toward reform distinctly flagged after the near-defeat of 2005 and subsequent social policy rivalry with the SPD, it has not completely dissipated. She continues to support further reforms in the crisis-torn countries of southern Europe. Germany’s state president Joachim Gauck, elected in 2012, was at least as deeply affected by the transformation era as was Chancellor Merkel, and also adheres to a liberal concept of freedom (not, in this case, neoliberal, but the much older idea of political liberalism). Raised in the East German city of Rostock, the former Lutheran pastor advocates personal autonomy within society. He believes that citizens have a responsibility to themselves and the general public, and should not abuse the solidarity of society or the welfare state. Normative, anthropological principles such as these, as well as the financial “necessity” of economizing, were key values advocated by Gauck and Merkel, and shaped Germany’s political landscape.
The neoliberal reduction of freedom to an economic principle cannot be easily imposed from without on established democracies, as the cases of Italy and the other southern European EU countries have shown. The reform recipes prescribed to the South follow the trends of the nineties and the German welfare state reforms of 2001–5. Their uppermost goal is to economize by reducing budget deficits and limiting government intervention. Second, they aim to reform their labor markets by relaxing employment protection and cutting unemployment benefits, and thus create incentives for jobseekers. The programs assigned to Greece, especially, reveal many parallels with the reforms of the nineties. For instance, measures to reduce staff in public service were previously introduced in the former GDR. Those affected were given one year’s notice to look for another job. But while this measure affected hundreds of thousands in the five new German states, a mere thirty thousand civil servants have hitherto been hit in Greece, and the populist left-wing ruling party hoped to revoke even these dismissals. In the summer of 2015, the international creditors and the European Union compelled Greece to establish a Greek trust fund agency to privatize state enterprises. Recalling the Treuhand in name, the Greek trust fund will, one hopes, not make losses as huge as those of the East German privatization agency. The creation of special economic zones was also discussed (as it had been for the former GDR, but never realized to avoid creating stiffer competition for the rest of Germany38).
Getting, and keeping, the IMF on board was certainly a smart move by Angela Merkel. It improved the reform programs’ prospects of success in southern Europe, since the monetary fund not only provides financial backing but also lends the neoliberal demands more weight. Without this external support, it would be hard to implement the reforms inside the European Union or the eurozone. Hence the rhetoric with which Merkel and the Troika presented them: every cut was declared to be “necessary” and “without alternative.” In view of the southern European countries’ high national debts and structural problems, perhaps it was even true.
In the more recent past, however, an alternative has emerged: to support the new EU member countries, Brussels devised a cohesion fund and other measures based on Keynesian principles. As shown above, this second Marshall Plan worked best in East Central Europe. (Its success in Romania and Bulgaria is questionable, as both countries absorbed only a small part of the EU funds.) Social and spatial inequality steadily decreased until the crisis of 2008–9; even the regions on the eastern periphery of the European Union profited from the general upward trend.
Yet no comparable program has been introduced in the southern EU, where the focus has remained on austerity. Why is this? Programs for investment in solar energy, for instance, spring to mind as an obvious solution. (Consider Israel’s example, where solar-powered hot water storage tanks have been installed on most roofs as a way of reducing dependency on gas imports.) But the European Union has had its fingers burned. It transferred assistance to the tune of hundreds of billions to Greece, Spain, Portugal, and southern Italy in the eighties and nineties. It is reluctant to launch renewed expenditure programs in the South since these earlier funds did not have the desired effect.39 Furthermore, its substantial support for its new member countries in East Central and Southeastern Europe was not unconditional. The recipient countries were required to “do their homework” in return (to use the somewhat patriarchal parlance now also used on southern Europe)—to order their national budgets, restructure their finances, strengthen the rule of law, and implement administrative reforms.
When it came to exporting the reform agenda, Merkel was able to proceed without answering to an electorate, unlike in domestic politics. Perhaps this explains why she did not introduce further socials cuts in Germany while demanding extensive reforms of other European countries. But the success of the Syriza party in Greece, Beppe Grillo’s Cinque Stelle in Italy, and most recently the Podemos party in Spain shows that this hard line can backfire. In all of these countries, left-wing populists gained widespread support by portraying Merkel, the European Union, and the international finance organizations as bogeymen who were entirely to blame for their countries’ economic and social woes. These movements, and the right-wing populists who are more successful in northern Europe (and more dangerous on account of their xenophobic tendencies), can only be debunked if the dialectic between technocracy and populism is broken. The traditional parties must recast the term “reform” in a positive light and use it to develop visions for the future. But the future lies, above all, with the younger generation and its prospects. And these were far more promising after 1989 than at the end of the period considered here.