The cost of unity: Ian Kershaw on the fall of the Berlin Wall

The following days passed in a delirium of euphoria. Elated crowds of East and West Berliners embraced. East Germans poured into shops and department stores, for the first time seeing the wealth of consumer products on show. Banks opened up that weekend to give out the 100 Deutsche Marks (D-Marks) Begrüßungsgeld ‘welcome money’ promised to citizens from the East, which they had no difficulty in spending straightaway. Underground stations were wildly overcrowded, the trains so full that they passed through some stations without stopping.

To be caught up in a revolution is thrilling. It is also confusing. No one knew what exactly was happening from day to day. New regulations, about border crossings and much more, seemed to appear almost daily as the East German system collapsed. Without mobile phones or the internet, we usually learned about these changes from the daily newspapers or television.

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New possibilities for travel into the tottering but as yet still extant German Democratic Republic (GDR) opened up. On Christmas Day 1989, we took the car for the first time through Checkpoint Charlie, driving beyond East Berlin to a lovely lake, the Müggelsee, to the east of the city. I had been there before, in the company of my (doubtless Stasi) minder in 1981, during a research stay in East Berlin. Then, I had felt a million miles from home, and not in a friendly country. This time, I was with my wife and sons. It felt almost surreal, and was the plainest demonstration to me of what momentous changes we were experiencing. Political and economic transformation took place at a breathtaking pace. It was exhilarating to live through.

Within a year of the fall, three million East Germans were unemployed and tens of thousands had left to find work in West Germany

In retrospect, the transformation followed an apparently obvious and inexorable course, but it didn’t feel like that at the time. Most East Germans – and many in the West, too – at first thought that the GDR could survive, albeit with a more humane sort of socialism. They idealistically imagined a system better than what had existed before – better, too, than western capitalism. There was initially not much talk of unification – that took some weeks to become a realisable and proximate objective. But before the end of the year, the slogan of the East German protesters – ‘We are the people’ – had become ‘We are one people’. And when the West German chancellor, Helmut Kohl, visited Dresden before Christmas 1989, he was met by a huge, ecstatic crowd, shouting “Germany united fatherland”. This rapturous greeting convinced him that unification was within reach.

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Even then, it was unclear what precise form it would take, how it would come about, and how difficult economic issues such as the conversion of the moribund East German Mark into the West German D-Mark would be resolved. Germany unification was not just an internal affair. It involved the United States, the Soviet Union, the UK and France – guarantors of the post-war settlement, and still the controlling powers of Berlin. What eventually transpired was not a merger so much as a friendly takeover by West Germany, with international blessing. Politically, East Germany was absorbed into a widened Federal Republic of Germany, whose constitution of 1949 (the ‘Basic Law’) remained unchanged. Economically, the choice of a currency exchange rate of up to 1:1 – when the real value was more like 1:8 West German to East German Marks – benefited consumers in the former GDR, many of whom had built up savings that they had been unable to spend. But it meant the rapid destruction of uncompetitive industry, most of which could not survive without subsidies, and a sharp growth in unemployment. Within a year, three million East Germans were unemployed, and tens of thousands had left to find work in West Germany.

End of the East

The demise of the East German state was completed in the early weeks of 1990. The acceptance of the West German takeover – above all, the attraction of the D-Mark – was confirmed in the East German elections in March 1990. That year, West Germany renounced claims to the former eastern German provinces assigned to Poland at the end of the Second World War. The last major hurdle, currency reform, was tackled at the beginning of July. The final steps took place rapidly over the remaining summer months. On 3 October 1990, the moment of Germany’s unification was accompanied by a huge street party in Berlin – at last, after 28 years, a united city.

The changes in East Germany were profound. People could enjoy the freedom to travel, buy western commodities – the rapid spread of West German cars was remarkable – and live their lives without fear of Stasi informers. And by the late 1990s, once the immediate economic shock of the transition to capitalism had largely subsided, and the impact of massive West German investment in rebuilding the dilapidated infrastructure could be widely felt, only a minority of East Germans felt nostalgia for the former communist system. But that did not necessarily mean a warm embrace for the West. After the fall of the Wall, East Germans who had occupied positions of authority, who had represented the discredited ideology or who had connections with the Stasi were purged. West German politicians and civil servants moved in, and western experts presided over the restructuring of the economy in the newly incorporated provinces of the former GDR. These visible signs of the West German takeover, however necessary, stirred much resentment.

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West and East German mentalities were not aligned as quickly as the political institutions. The feeling lingered that East Germans were effectively second-class citizens and economically disadvantaged, despite the huge sums invested in the former GDR following unification. Nationalist and racist attitudes existed in both parts of the united Germany but, beneath the surface of official communist internationalism, they had persisted more strongly in the East. The influx of migrants from eastern Europe in the 1990s in the wake of the collapse of the Soviet bloc and the Yugoslavian war spawned attacks on foreigners, more prominently in the East. In this respect, differences in East and West continue to be seen: most of the strongholds of the right-wing Alternative for Germany party are in the former GDR.

The fall of the Wall, once the initial turbulence settled, brought fewer direct changes for West Germans than for former GDR citizens. Unification had significant consequences, nonetheless. The cost of rebuilding the East had been underestimated. The German economy fell into recession. State debt doubled. Unemployment rose steeply. A ‘solidarity subsidy’ – a tax imposed to help finance the rebuilding of the East – gradually came to cause some resentment. Because of related economic problems, by the end of the 1990s Germany could, remarkably, be described as ‘the sick man of Europe’.

Superpowers crumble

Though the fall of the Wall symbolically marked the end of the Cold War, the final act in the extraordinary drama lasted another two years. The other Soviet satellite states in central and eastern Europe rapidly tumbled like dominoes in autumn 1989. The Soviet Union itself disintegrated as economic collapse accompanied political implosion. It staggered on until autumn 1991, when the world watched in amazement as the once-mighty superpower finally crumbled and, at the end of the year, was dissolved with little more than a whimper.

The end of the Cold War reshaped Europe and altered the global power constellation. New problems rapidly overshadowed the rejoicing that had accompanied the fall of the Wall. The first Gulf War in 1990–91 was a foretaste of looming trouble in that region. Yugoslavia had collapsed into terrible ethnic war in 1991, and only tough American intervention succeeded in imposing an uneasy peace four years later. Central European countries and the Baltic states struggled in the early 1990s to adjust to a competitive capitalist global economy and pluralist democracy, only gradually, and with varied degrees of success, coming to terms with both. Western Europe, meanwhile, looked to deeper integration and the eventual incorporation of the former Soviet satellite states of central and eastern Europe. But the Maastricht Treaty of 1992 stopped well short of political union, a rhetorical aim but not a realisable objective. It settled for a new common currency soon to be called the Euro, though not all countries in the newly constituted European Union agreed to introduce it.

Though the fall of the Wall symbolically marked the end of the Cold War, the final act in the drama lasted another two years

In the former constituent republics of the Soviet Union, serious difficulties remained. Russia descended into a kleptocracy as organised criminal syndicates robbed the country of what remained of its wealth. Economic ruination and gross corruption were presided over with drunken incompetence by Boris Yeltsin. The west did nothing to ease Russia’s transition to capitalism, and the expansion of Nato into eastern Europe emphasised the weakness and humiliation of the erstwhile superpower. The result was the advent in 1999 of a new ‘strong man’, Vladimir Putin, whose aim to restore Russian national pride and power was popular at home and held significant long-term consequences for international relations.

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The fall of the Wall had opened up the prospect of American global dominance, of unipolar power in world affairs. Instead, it brought over time a new, increasingly dangerous multipolar power-constellation. The emergent superpower of China, the humiliated former superpower of Russia (still with a huge nuclear arsenal), regional powers of Iran and Saudi Arabia, and the nuclear-backed dictatorship in North Korea have come to pose new international challenges, while the US has been weakened from its involvement in unwinnable wars in Afghanistan and Iraq. The world that evolved after the fall of the Berlin Wall has been radically changed. Is it safer?

Europe, east and west, benefited from a six-fold expansion of global trade in the decade or so after the fall of the Wall. Globalisation seemed unstoppable. But it did not bring only gains. Downsides included a widening wealth gap, increased job insecurity and deregulated banks that became little less than gambling casinos. Many people felt their sense of identity threatened as migration from poorer to richer parts of the world became easier. The backlash turned into a wave of populism. This has come to threaten the very values of liberal democracy that the fall of the Berlin Wall seemed at first to symbolise.

Sir Ian Kershaw is emeritus professor of modern history at the University of Sheffield. His latest book is Roller-Coaster: Europe, 1950–2017 (Allen Lane, 2018)

This article was taken from issue 19 of BBC World Histories magazine, published in November 2019