TIME: Almanac 1995

home *** CD-ROM | disk | FTP | other *** search

/ TIME: Almanac 1995 / TIME Almanac 1995.iso / time / 022690 / 02260012.000 < prev next >

Wrap

Text File | 1994-03-25 | 5.7 KB | 121 lines

<text id=90TT0491> <title> Feb. 26, 1990: Yes, Let's Get Together, But. . . </title> <history> TIME--The Weekly Newsmagazine--1990 Feb. 26, 1990 Predator's Fall </history> <article> <source>Time Magazine</source> <hdr> WORLD, Page 14 Yes, Let's Get Together, But...</hdr> <body> One would think that Heinz Lyscik, director of an East Berlin cabaret famous for its risque pillorying of the former political order, would be overjoyed at the fall of the Communists and the prospect of unification with the West. Imagine: no more hassles with the censors, complete artistic freedom, new crowds from the West flocking to his place, Die Distel. But Lyscik is more worried than cheered. Under the Communists, he notes, "we got 13 marks per ticket in subsidies. Tickets cost patrons only 1.50 marks. Now we are already up to 4 to 8 marks, and we don't know from day to day if we will continue getting our subsidy. If not, we'll have to start charging the 30 to 40 deutsche marks they charge in the West. What kind of audience will we have then?" Polls show that two-thirds of East Germans and three-fourths of West Germans favor unification. But with unification likely to take place sooner than almost anyone expected, East Germans are beginning to realize that they are going to lose the attractive sides of communism (subsidized housing, guaranteed jobs) as well as the less desirable aspects (secret police, censorship). Across the border, meanwhile, West Germans are starting to fret about the high costs of adopting their poor relations. Last week's agreement between the two countries to start immediate negotiations to replace the East German ostmark with the West German deutsche mark provided the starkest reminder yet of the downside of unification. The immediate aim of the monetary union is to stanch the East German stampede to the West, which continues at the rate of 2,000 a day. The theory is that if Easterners were more confident about their country's economic future, they would be less prone to flee. The first step in that process is to replace East Germany's funny money with West Germany's stable, convertible currency. Easterners, though, will have to pay to get their hands on hard marks. Even if the notes are traded at three ostmarks for one deutsche mark, the official rate of exchange for foreigners, East Germans will find their savings slashed by two-thirds overnight. The damage will be worse if the exchange rate is closer to the more realistic 10 to 1 offered on the black market. East Germans have a lot to lose; their personal savings total more than 150 billion ostmarks, or some $3,100 a person at the inflated exchange rate of three ostmarks to the deutsche mark. Fearful of a sudden devaluation of their hoards, East Germans last week staged a minirun on banks, withdrawing cash for shopping sprees. "People are buying whatever has value," said a salesclerk at East Berlin's Zentrum department store. After unification, East Germany will adopt West Germany's market-oriented economy, and the going could initially be rough for East German companies and workers. Aging and inefficient East German industries like automobile manufacturing, which produces the pathetic 26-h.p. Trabant, will face competition from modern, powerful West German counterparts like Daimler-Benz. This could cause widespread factory closures and job losses, which never happened in the old centrally controlled East German economy. A report by the European Community leaked two weeks ago estimates that East Germany, which now has a worker shortage, could have 15% unemployment--1.2 million workers--in the first year of economic reforms. East Germans also count other costs of becoming Westernized. There are the usual bugbears of crime, pornography and AIDS, as well as more ethereal concerns over competitive pressures in the ellenbogengesellschaft, or "elbow society." Some Easterners feel their identity is already being eroded by the encroachment of West German politicians in the campaign for next month's parliamentary elections. Western parties have adopted each of the major Eastern parties, providing them with money, organizational support and clout. Former West German Chancellors Willy Brandt and Helmut Schmidt, among others, have been crisscrossing East Germany, drumming up support for the Eastern counterpart of their Social Democratic Party, which polls predict will win as much as 54% of the vote. "The West Germans are hijacking our campaign," moaned Barbel Bohley, a founder of New Forum, which led the popular revolt against the Communists last year. While East Germans fret about being swallowed whole, West Germans worry about indigestion. Expanding the deutsche mark's territory into East Germany risks setting off a torrent of inflation in a country that has traditionally been paranoid about rising prices. The currency issue aside, West Germans know that to prevent the total evacuation of East Germany, they will have to flood the area with money to reconstruct its aged industrial base, raise income levels and provide unemployment insurance. Earlier estimates that put the price tag for unification at $12 billion have been raised to some $50 billion. Despite their anxieties, few Germans on either side of the border want to stop unification. But Germans of all persuasions are learning, as the adage goes, to be careful what they wish for, because, from all appearances, they are certainly getting it. By Lisa Beyer. Reported by James O. Jackson/Berlin and Ken Olsen/Bonn. </body> </article> </text>