Berlin 25: The road to unification

329 days. Eleven months between the opening of the Wall and the "day of German unity", the day when the two Germanys came together formally as West Germany absorbed the German Democratic Republic (GDR) into the fold. In business terms, a takeover not a merger. But, an historic unification that not only transformed Germany but the dynamics and politics of the European Union and played critically into the disintegration of the Soviet Union.

In retrospect it might seem obvious the one had to flow from the other, an inevitability. As night follows day. Far from it, however. The prospect of German unity was regarded by most before the Wall came down as what one historian called simply “preposterous”, a dream that was once essential to the core narrative of the post-War German state, relegated largely to tokenism by the pragmatists who ran Germany, much like the dream of Irish unity is here today.

In 1969 Chancellor Willy Brandt, architect of the policy of co-existence and co-operation between the two states – "Ostpolitik" – had renamed the Ministry for all-German Questions the Ministry for Inter-German Relations to send a clear message that Bonn would not be pressing too vigorously its claim to speak for all Germans. And it did not. According to historian Timothy Garton Ash, while polls taken in the 1950s and 1960s found that up to 45 per cent of the West German population felt unification was the "most important" question of the day, from the mid-70s on, the figure never exceeded 1 per cent.

When the Wall was decisively breached on November 9th there was a deep ambivalence in West Germany about embracing the eastern cousins. In August 1989 the deputy chairman of the German Social Democrats even criticised the Helmut Kohl government for "aggravating" the crisis by welcoming East German refugees who were hoping to come west through the newly opened Hungarian border.

Downright hostility

And even after the Wall fell, unity was regarded at home variously as an unrealisable, distant dream, an undesirable loss of identity for citizens of a state for which there was still a lingering attachment, an economic impossibility, an unnecessary provocation to the Soviet Union . . . Abroad, among allies in the EU and in the Soviet Union, attitudes were downright hostile.

Margaret Thatcher told Mikhail Gorbachev bluntly that neither the UK nor Western Europe wanted the reunification of Germany. "We defeated the Germans twice! And now they're back!" she argued. Yitzak Shamir, Israel's prime minister, speculated aloud what many did not dare say, that a country that "decided to kill millions of Jewish people . . . will try to do it again".

It was grossly unfair to a German political leadership of both Christian Democrat and Social Democratic hues that had so firmly put behind itself the country's Nazi past and had committed themselves wholeheartedly to European integration as a German vocation and a guarantee it could never return to its past ways. But it reflected a lingering sense among a particular generation of its wartime enemies that a powerful Germany still needed to be restrained. Thatcher was joined by France's Francois Mitterrand and Italy's Giulio Andreotti. The Netherlands' Ruud Lubbers even questioned the German right to self-determination.

But for Helmut Kohl, Germany’s conservative chancellor, the breaching of the Wall changed everything. Two weeks later, without consulting his coalition partner, the FDP, he announced a 10-point programme calling for the two Germanys to expand their co-operation with a view to eventual reunification. He was largely alone, even in the East. On the streets of the GDR in Leipzig on October 9th, the intellectuals and pastors who joined together in civic organisations such as New Forum, had been demanding not unification but political liberalisation and basic freedoms.

Initially no timetable was proposed by Kohl. Indeed, in November 1989 he privately warned his advisers that unification might take another five years. However, events rapidly came to a head in early 1990. And the dynamic was encouraged strongly by the US, unconcerned by Germany's history and eager to capitalise on the disintegrating Soviet Union. "The initiative to move faster . . . came from Washington, " historian Tony Judt would observe.

On May 18th, 1990, the two Germanys would sign a State Treaty for Currency, Economic, and Social Union. It came into force on July 1st, 1990, with the deutschmark replacing the East German mark on a one-for-one basis as the official currency of East Germany.

A Treaty of Unification would be signed on August 31st, by which the GDR was absorbed into the FRG, as approved enthusiastically by the former’s voters in the March 18th elections which became a referendum on Kohl’s plans for speedy union.

On September 12th, 1990, the four second World War Allied powers (the US, Britain, France and the USSR) agreed to give up the rights they had exercised over Berlin since 1945, and on October 3rd a sovereign and united Germany came into existence.

Following the so-called Two-Plus-Four agreements (of the two Germanys and the Four Powers) 350,000 Soviet, and later Russian, troops were withdrawn as of 1994, the year in which all four powers also withdrew from Berlin; Germany remained in Nato, with a small presence of foreign (Nato) troops on its soil.

‘We’re staying here’

But how did it happen? First and foremost it was the result of a political decision and the political will of Kohl, but fundamental contradictions and weaknesses in the East German economy played a major part. The flow of emigrants from the GDR through

Hungary

and Czechoslovakia – some 2,000 a day heading west by early 1990, 32,000 by the time the Wall fell – was matched by crowds of demonstrators in the autumn of 1989 beginning to chant “we’re staying here”, and what they were staying for became more central to the argument about what would come next. That new reality would crystallise by the time Kohl went to Dresden in December, when he was met by huge, enthusiastic crowds now calling for unity.

East Germany for years had been subsidised by the Soviet Union, where fundamental economic reform would lead to a decision to accept only hard currency at world market prices for its exports, a decision which would precipitate the collapse of Comecon and the GDR. And the GDR had increasingly also been subsidised by West Germany as part of its rapprochement strategy of Ostpolitik. Garton Ash calculates that the total of state-to-state transfers between West and East Germany in the years between 1972 and 1989 was about DM14 billion.

In truth the GDR was broke. Its industries could not compete. According to unpublished estimates by its own experts, it had a foreign debt of $26.5 billion. Servicing that debt absorbed more than 60 per cent of its yearly export earnings. And with unity, some 80 per cent of East German enterprises proved helplessly uncompetitive and went under. The economic shock to the population would have been catastrophic had Bonn not levied its own people to support unification and exchanged their marks at face value.

But if the prospect of collapse of the GDR economy and growing enthusiasm among East Germans – nearly half of whom backed Kohl’s CDU-led “Alliance for Germany” in the March elections – made the project of unity a runner domestically, externally Kohl faced huge challenges. Not least the reality that the EU and Nato would have to approve unanimously the continued membership of a reconfigured Germany. And that was by no means a given – European reaction to Kohl’s unannounced road map speech was one of shock.

In truth the Cold War division of Europe had resulted in an equilibrium that many leaders saw as suiting the West. Germany's unification would unbalance it, as British foreign secretary Douglas Hurd would admit candidly as late as December 1989, commenting ruefully that this was a system "under which we've lived quite happily for 40 years".

Gorbachev too, at some political risk to himself, would not come round to full absorption of a united Germany into Nato until meetings with George Bush in May 1990 and with Helmut Kohl in the Caucasus in mid-July. The very hefty cash price paid by Germany to the Soviet Union made it easier. Gorbachev, Judt has noted, tried at first to hold the unification negotiations hostage for a ransom of $20 billion, before finally settling for approximately $8 billion, together with $2 billion more in interest-free credits.

Dublin summit

The key EU leaders would also come round eventually, crucially at a summit in Dublin where a deal was brokered in part as a result of then taoiseach Charles Haughey’s strong support as EU president for unity, later warmly acknowledged by Kohl. Mitterrand was quicker than Thatcher to recognise the inevitability of unity, however unfortunate from his point of view, and to begin to articulate a price for Germany that would involve it binding itself economically ever more tightly into the EU.

Kohl, together with foreign minister Hans-Dietrich Genscher, understood that they had to commit Germany to the creation of economic and monetary union, whatever reservations the powerful Bundesbank might feel. The chancellor, to his credit, let it be remembered, argued strongly that a monetary union would need a fiscal and therefore also a political union to accompany it; but Mitterrand and Andreotti were having none of it. The idea, as Judt put it was "that they should get a handle on Germany's currency, not that Germany should get a handle on their national budgets". And we have paid a heavy price for that political opportunism in the recent crisis.

The price of German unity for the EU would ultimately be German commitment to the euro and the treaties of Maastricht, Amsterdam and Nice.

Twenty-five years after the unification process was launched, Germany is now the richest, most populous state in Europe – it has both absorbed huge costs of unification and transformed its economy into the powerhouse of the EU. Its political and economic leadership remains more crucial than ever. Indeed, in 2011 Poland's foreign minister, Radek Sikorski, observed that "I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity."

Francois Mitterrand’s and Margaret Thatcher’s heirs would find it difficult not to agree.