A turning point for the two Germanies?


Walk into any office in the former German Democratic Republic, and you are likely to find what the locals sarcastically call a "besser Wessi" — distinguishable by dress, accent and size of pay cheque — there to teach the "Ossis" how to do everything from run a bank to organise a political party. SALLY LOW reports from Germany.

From street names to the popular DT64 youth radio station and the Oberschule which is now a Gymnasium, it seems every remnant of the old system, including the mentality of the people who lived under it, must be classified worthless and swept away. Real unemployment of over 30% and wage inequality are only the most glaring examples of the factors that prompt many an "Ossi" to bid visitors "welcome to the colony".

One of the few opinions common across all Germany is that unification happened too quickly and the politicians responsible either did not foresee or deliberately played down the consequences for ordinary people. Now there is deep dissatisfaction on both sides of the former wall, and the future of Chancellor Helmut Kohl's Christian Democratic Union-Free Democrat coalition is precarious.

While both parties publicly reject the idea, a "grand coalition" between the CDU and the main opposition Social Democratic Party (SPD) has strong support among employers, who would like a united political force to bring about changes in labour and social relations — something they have wanted since the mid-1980s but which they feel is now more attainable.

"We had a grand coalition in 1966-67 in reaction to the first major recession since the '50s", said Angela Klein of the United Socialist Party in Cologne. "It had the same purpose then as it would now: to unite all national political forces to overcome recession, modernise the state's instruments of economic policy and break union resistance."

Although it is still the strongest in Europe, the German economy has had to cope with the costs of unification at the same time as it has suffered the effects of worldwide recession. Inflation has risen to 4.8% and the public debt — which has ballooned to finance eastern reconstruction — is expected to reach 46% of GDP by 1993 and continue to grow.

In opposition to the government, the Bundesbank has stated that the necessary flow of money to the east — DM140 billion last year — must be financed either by higher taxes or by sharp cuts to social services in the west, rather than by borrowing, which is politically less costly.

German employers are using the occasion to insist the "social market economy" has left labour costs too high. One cited example is the German motor vehicle industry, where, after social welfare payments are counted, hourly labour costs are DM45 compared to DM35 in the US and DM28 in France.

One result of the anger people feel over the sacrifices demanded of them was the strong resistance against moves by the government

and employers to keep this year's wage rises below the inflation rate. The country that is renowned for its industrial peace was rocked by first ever stoppages, albeit many of them very short, among bank employees; even though only 10% of them are unionised, they managed to win 6.5%. Similar gains were achieved by steel and food sector workers.

Employers seemed unable to enforce the changes they wanted, so it was up to the government to break through in the public sector. It deliberately provoked a confrontation by rejecting an arbitrator's recommendation for a 5.4% rise. For 11 days in April and May, garbage piled in the streets and public transport and postal and other government services were disrupted as public servants struck for the first time in 18 years. On May 7 they won the original 5.4%.

This was a political humiliation for Kohl, who had repeatedly called for restraint. "Half the people thought the strike was a political protest against the government", said Klein. "There was a strong feeling that the upper classes must pay because, of all the money that has been raised in the west and transferred to the east, three-quarters has come out of the pockets of working-class people."

The settlement was far below the 9.5% originally demanded by the unions. In fact, 44% of the union's members shocked their leaders and voted to reject the settlement.

In May the powerful IG Metall union avoided an all-out strike with a last minute deal for a 5.8% rise this year and 3.4% and a shorter working week for the following nine months. Settlements in printing and other sectors followed quickly. Some argue that IG Metall had been afraid of a fight and settled for less than it should have, though the result was above the employers' target of 3.3%.

"They wanted to test the new balance of forces since unification", explained Witich Rossmann, an IG Metall organiser in Cologne, where 3000 jobs have been lost in the industry since 1991. Large firms involved in electronics, such as Siemens, are profiting from infrastructure modernisation in the east, but heavy machinery producers have lost important Soviet bloc markets.

Some firms have been hit by competition from east European countries, where labour costs are a fraction of those in Germany. Perhaps most serious is the threat that companies will move their operations east to profit from lower labour costs and slacker environmental regulations.

Under these conditions, the employers did not expect such strong resistance but they very quickly realised that even in factories where there had been no strikes for 40 years, workers were organised and keen to act, said Rossmann. He viewed the outcome as a compromise that maintained the status quo but thought employers would be reluctant to enter into another head-on confrontation very soon.

Others, however, say it was the first round in a new era of industrial relations and that the 1990s will be a critical period for German unions.

Using the east as a weapon, there will be moves to dismantle the relatively large west German public sector and to deregulate the wage bargaining process according to criteria such as productivity and regional unemployment, predicted Klein. Already, metal industry employers have cast doubt on previous agreements to grant nominal wage parity between east and west by 1998.

The wage dispute provided a glimpse of how effective divide and rule tactics could be for employers. While there were some solidarity strikes in east Berlin, it was viewed as a largely western affair. There was a strong sentiment among easterners that the "Wessis" were asking for too much.

On the other hand, claims Dr Helmut Ettinger, a member of the Party of Democratic Socialism's international department in Berlin, many in the west blame easterners for the current difficulties and think they want too much too quickly. Easterners also think the unions have not done enough to support their new members.

Disillusionment with the major parties and the divisions between east and west were starkly expressed in the Berlin local elections on May 24. The CDU's vote dropped to 14.3% in the east and was 35% in the west of the city. The PDS did much better than expected in the east with 29.7%, but gained less than 1% in the West. Only the SPD won a constant 31.8% on both sides of the wall — 7% less than in the last elections.

The far right Republican Party won 5.4% and 9.9% respectively in east and west Berlin. With their mixed bag of nationalism, racism and an element of social justice, the extreme right have also profited from popular disaffection.

The PDS confounded those who had written it off as a spent force. According to Ettinger, the renewed support is partly due to the party's role of constructive opposition.

One example of this is in Dresden, where the PDS provides a tenants' advice service and has initiated a petition campaign to force the government of Saxony to hold a referendum on rent increases. "We collected 55,000 signatures, many more than the number of people who voted for us at the last elections", explained Christine Ostrowski, party president and city council member.

"Now they are furious. They are trying to find some constitutional loophole to avoid the referendum. Even the national media who usually ignore our existence had to take notice of this.

"We have to concern ourselves with people's immediate problems and show we can do more than make oppositional speeches in parliament", she told Green Left.

Within the PDS there are a range of views as to what sort of opposition the party should be and what alternatives it should pose. Party leader Gregor Gysi has said one of the big dangers for the PDS is that it should become an accepted part of the political establishment.

One lesson of the Berlin elections, said Ettinger, is that the party should concentrate for the time being on building itself in

the east rather than try to become strong in the west where it has had little success.