Transcripts For DW DocFilm 20240713

T. W. Africa. And suddenly we were off and we had nothing to work with nothing. On the from i didnt really realize dont know if you wish that we only had a few phone lines so they were ringing nonstop if you were unlucky youd get one of these guys saying they were from whatever company and wanted 2000000 so what that was parked on the. Market and the market is a monster it sweeps aside everything that is weaker than itself. The fog of using. So how we treated the east germans i was ashamed of myself so often. December 1909 to berlin wall had fallen a month previously west german chancellor helmut kohl paid a visit to dresden in what was then still communist east germany the unimaginable suddenly seemed possible. When i see that my goal should history permit is the unity of our nation inside and out so. For us in the federal republic selfdetermination also means respecting your opinion. We do not want to nor will we impose our will on anybody we will respect whatever decision you make for the future of the country and this i. So much call was pledging a 2nd economic miracle this time in eastern germany. 30 years on his promise of a blooming landscape of Better Living conditions has become reality. Even if not as quickly as many had hoped. But some in the east still regard reunification as nothing but a takeover. Did german reunification leave a traumatic legacy. Because what if i asked a friend in prague why people there seemed more satisfied than people here for you to look he said we compare things with the old days and you compare yourselves with the west plus were changing ourselves whereas you have been changed by others or. People in eastern germany soon saw how the process of bridging the economic gap between east and west was above all organized by people in the west. The west german political and business elites got down to the task full of optimism and commitment. Overseeing the Economic Transformation in the early 1990 s. Was a Government Agency in berlin bigot boyle was on the board of the troy hunt from the outset and hose there was so much going on the place was buzzing with activity all day long and often the whole not long to. Foley. Bigot pro was appointed president of the tri hind in 1901 she would coordinate the radical privatization of the entire previously state run east german economy. Taking center stage in this historically unprecedented undertaking. Initially experts in the east and west based their projections on east germany having assets of one trillion marks which soon proved to be very wide of the mark. 8000 state owned companies employing 4000000 people faced an uncertain future. Youve been a bunch of blooming landscapes was the key phrase that motivated everyone back then people thought everything would get better fast we made big demands on people and they did suffer and we didnt have the time to properly look at their personal histories it was really tough in some cases theyd clearly suffered great hardship and must have hated us and me of course i represented what was happening and many hated me goes along. The overhaul of industry in eastern germany was accompanied by austerity measures on an enormous scale countless Companies Went under millions of people lost their jobs. They were a verb or asians were felt across society. People felt powerless and vulnerable. They all see the disparaging term yama aussie or whiny east german emerged to them alongside it was the best of se the arrogant west german who does the toy guns was at the heart of this clash often and not quite the 4 years in which the troy hind agency was active saw change at a breathtaking pace the flourishing of optimism in 1990 blossomed into a frenzy of privatisation that was followed by a season of scandals and finally an ugly harvest of anger and discontent and so the start of the toy basically went through a complete life cycle within just a few years 1st its foundation that its rapid expansion at its peak face and finally its highly controversial winding town in 1903 in 1904 thats what makes this organization so fascinating so much which also costs. In the former communist east germany nearly all property was state owned only a tiny fraction was privately owned. On february 12th 1990 the east German Council of ministers convened for a roundtable meeting. On the agenda was the forming of an agency to privatized state assets the share of those assets was to go to east german citizens. Their process would be administered by a new Holding Company the 20 hunt. The holding firm was founded on march 1st 1990 by the last communist led government of east germany. The idea behind the toy hind agency was for someone to take care of all the changes involved in the privatization process they needed to have a plan and it couldnt simply be done by a ministry a Trust Company had to be set up. The idea of securing National Assets soon became a secondary issue the immediate priority was the survival of east German Companies an early test of relations between east and west and he went out there didnt nobody gave east germany a chance it would have needed a lot more time and a lot more money in order to overhaul the economy so a states economy is likely huge tanka you cant simply turn it around in a new direction it takes time we werent given that time and east german citizens didnt give themselves the time either in the last east german elections they voted for the center right of christian democrats who had promised to do things like in west germany. East germans decided themselves that they wanted to live in a free market economy. And that meant privatization simply what is it that. The pressure was enormous the east was in danger of economic disintegration its companies were largely uncompetitive while their traditional export markets elsewhere in Eastern Europe or collapsing the solution was to bring in the west german deutschemark a contentious decision for some in the former east it was a sign of hope a reason to not leave for the west but when the door to mark was introduced east german industry suffered even more. Of i said to him what course in the run up to the Monetary Union. But if we do nothing to give people a reason to stay in the east then youd best send us some of your army to make sure theres still some want to drive the trams at christmas time people were leaving in dramatic numbers so the pressure for the introduction of the deutschmark was a mans he the the Deutsche Mark had an unintended side effect prices for east german products soared no one bought them companies that couldnt sell their products couldnt pay their workers. The try hunt had to provide billions in liquidity assistance. By now the east German Government had no more say in developments. By the time of Monetary Union in july in 1990 west german politicians were largely in control on july 3rd 1990 the chairman of the troy huns 1st board of directors was selected the east German Council of ministers agreed to the man tapped by the west German Government debt level of it or head of a steel making Company Social Democrat Party member and an executive with experience in streamlining ailing companies. On august 31st 1990 east and west germany signed the agreement for the political reunification of germany. For. The once and with the unification treaty called for ways to be found to give the population of eastern germany a share in their National Assets. Were tied by distributing securitized shares in the formerly state owned assets it was written into the agreement. By now though no one seemed inclined to find ways to give east germans a share in those state assets. West germany was pumping enormous sums of money into the east and they pushed for privatization on a mass scale. And this was the time seen by many toy and staff as the golden age it was their spring everything was blossoming and they were drawing up plans making decisions deciding what direction things would take and rules were few and far between the staff decided all themselves. Bigot broil former finance minister of the state of lower saxony became death therefore that is key ally on the trail and agencies management board. Of governors of and then suddenly we were off the bush front foot and we had nothing to work with nothing we had 0 documentation there were a lot of staff whod been recruited at short notice by the last communist government there were a few which germans trying to get their heads around it all it was stressful and fascinating you were standing in front of this mountain of work and somehow i had to figure out where to start with but there was this feeling of having a task that was really worth doing as best as possible the atmosphere at the beginning was amazing exhilaration desperation and hope the whole gamut of emotions. A list but for the 1st few days i was busy with headhunters who would bring along a new candidate every hour or so. The ones i liked would be given a tooth brush and a room in a hotel that weve rented and had to stay there. With a computer that was. So. Happiest. Which i was given a room with a desk similar i also got a Reception Room with a secretary and shed already been there 3 days. And i had this huge stack of postal to deal with i went to be a good boy and asked her what i was supposed to do with it and she said youll have to figure that out for yourself were all starting from scratch here. She is the boone family she was a patient when you were explaining important issues to her and she could get impatient when you explain something she already knew here. Bias that people just remember the story about her having a sign on her desk that said you dont need to tell me what not to do. The fact she said it. And if anyone started to waffle on that shed turn the sign around so that they could read it so this place sleeze. To try Hyundai Agency west germans quickly took over the helm and began to make decisions affecting thousands of former east German Company whose their job was to Rate Companies and find potential buyers east germans in the troy hunt who were largely restricted to jobs lower down in the hierarchy. Whose reason i had expertise but i didnt have access to a big network. The people from west germany who came to the toy hall and did have those networks that the auditors for example had contacts to lawyers and banks contacts that we simply didnt have. Who did i know a few staff and my former bosses but they had suddenly disappeared. Many companies in the former east were growing increasingly desperate they urgently needed money to at least be able to pay their staff film in the film we only had a few phone lines so they were ringing nonstop if you were unlucky youd get one of these guys saying they were from whatever company and wanted 2000000. And youre sitting there with 0 documentation from the company with no idea if the name is even right image and if the person calling has any kind of authority to be talking to you then youre supposed to do something so whatever. Despite the lack of reliable figures try home staff awarded loans totaling billions of dorchin marks of the act by the government the finance ministry subsequently set up an independent committee made up of Business Experts its job was to Rate Companies their Business Plans and their chances of survival. In effect they determine the future of each company and its workforce independently of the trade high and. Those forms of it basically awarded School Grades meant liquidation more or less liquidation the possible equivocation but no company ever got an at least that i saw. In 1990 close funder nonny former mayor of hamburg was appointed the 20 hands commissioner overseeing the privatisation of the former state owned coming out of business groups. Of your own government the government assumed that once the doors were open the market would be there. Which in addition to being powerful was also fair. And then set up whatever was needed in the east but the market is not fair the market is a monster. Its to east germans unemployment was something we knew from television i remember seeing people blocking the highways because of Steel Industry layoffs in the west but not here. People now had to beg for work people with good qualifications like myself were being sent off on courses but didnt know how to apply them we were suddenly being asked to say what we could do what were our skills just imagine being asked what is it that you can actually. Really do come. In the course of less than 2 years the number of jobs in eastern German Companies plunged by around 70 percent millions became unemployed and left in the spotlight of the crisis was the troy hunt. To. People organize protests and rallies across eastern germany they occupied Company Premises while the 1st major closures were extremely controversial. And into fluke and the east german Furniture Industry were to be shut down because there were mass layoffs which became a huge issue. At the trial Hyundai Agency many members of staff were feeling the strain was the agency pursuing the proper course should companies in the east be revamped or privatized and sold off to conflicting camps within the troika and emerged. Vater favored restructuring to get boil wanted to let the free market decide. Because we were constantly arguing if i wanted privatisation to play a big role as opposed to just modernization. I wanted all options open. Overall better and i were at loggerheads but we did then arrive at a solution and that resulted in this letter from rove ada which would become his legacy this coupled with. This is what became known as the easter letter issued in april 1901 the 21 management had settled on a course of action rapid privatization prudent restructuring and liquidating companies with care. But then the events came to a shocking turn on Easter Monday dec vater was shot dead through the living room window of his house and just. As we grieved in silence. Sad incredulous appalled and angry. The left wing terrorist group theory of claimed responsibility accusing the troy hind of driving his german industry into bankruptcy so that its assets could be pillaged. Call. Him or call it was looking perhaps somewhat desperately for a social democrat manager to succeed. But he didnt find anyone. And. Then you might have on google when someones been murdered you can imagine how many people are queuing up out there saying ill do it. Then you have to give credit to philip world who was a member of this board for being prepared to take on this task under such extreme conditions. Thats the bottom line is with us most of. Todays big broil makes few public appearances she comes from a well known hamburg based banking family after studying in oxford in geneva she married and had 3 sons. She later represented the center right christian democrats in hamburgs parliament then she caught the eye of lower saxony state premier who appointed her to his cabinet. Minister i was the 1st woman in germany to take on that post state minister for economics and transport taishan and then later finance minister so i had to acquire a sense of authority. In april 1991 boyle was the only person willing to assume the challenge of having the trial and. The trial hunt was now in full bloom this was the post that your post reagan era a capitalist west was celebrating its triumph. I had this absolute conviction and when i have a conviction i can get tenacious i was always very frank and not everybody liked that but i was fortunate enough to be independent so i could just go home if i didnt want to continue which most people couldnt. But she didnt go home boyle commuted between hamburg and berlin. Pushing up the pace of privatisation. Under the biggest oil the toy had became what it is now famous and infamous for a mass privatisation agency. The numbers rose rapidly and only 2 or 300 companies were privatized in the whole of 1990 and even then mostly following inquiries from west german investors but by 991 there were 100 privatizations of much more. Positive hours and this was the phase in which the toy had to completed the majority of its work the staff understood that the toy had just wanted to plough through at a breakneck pace and get it all over and done with that was what be a good boy wanted to do and. We have one single objective to become smaller and less important every day so that we can finally be able to shut up shop it gets on the coast and over to there was fierce competition between the different directorates creating incentives to maximize the pace of privatization to correct. The advocates of rapid privatisation believe this would provide urgently needed capital for eastern germany in bonn which was then the seat of the German Government government officials agreed. To fund this kind thought it clever for the government to focus on the big political issues while handing the troy hand responsibility for the difficult economic decisions which were often very unpopular. Initially the government in bonn had no idea of what we did we were left in limbo i was sometimes summoned to the cabinet in bonn to explain the state of affairs they were living in a different world they wanted to set up Technology Parks i said that was the last thing we needed what we needed was funding for the firms in question it was really odd. And for us. The government took a hands off approach in the east the troy managers were largely left to their own devices for the 1st 6 months to try to and was even exempt from any liability once youd come im fine in the beginning the toy hunt had a relatively free license with very little parliamentary oversight there was a subcommittee to the main finance committee and being so small it was in no position to deal with the scale of the toy hunts work in 1992. Today hes the talk of course the toy hand was subject to oversight via various channels there were privatisation manuals and the federal budget code and all kinds of rules. A lot of the decisions had to be approved by the finance ministry which in turn had to consult the Budgetary Committee there was an entire network of regulations governing the toy hall and. I went to berlin twice a week sometimes more sometimes id be in berlin in the morning and in the afternoon in the 21 committee in bonn i was in Constant Contact with the troy hunt management we talked in detail about matters all the time. Then you can start this firm belongs to the toy hunt and we want to sell it and increase our workload i want to get rid of it. Our job is the 100 percent privatization of companies assigned to us. Here to go out and since. I urge the agencies regional offices to Privatized Companies as quickly as possible it. There was a tendency among some Regional Directors to modernize 1st and then privatized. Given the number of companies we were responsible for that we didnt have the staff to be able to do that. In the transition from plant to market economy insights from the west were crucial the process required both Financial Capital and expertise. And we always had trouble finding enough staff and initially we did look primarily in the west it was interesting because at 1st we only got older people who sort is an issue of national importance. And later we had young people who wanted to be part of something new but middle aged people were content to stay at their companies in the west and reluctant to move and start over and then helmut kohl launched an initiative asking major corporations to provide us with capable and experienced executives on loan we had mixed results some did a great job but in other cases company sent people they just wanted to get rid of it was pretty shocking in some cases but the most shocking thing for me was how we became seen in the public eye the west is taking over and the east doesnt have a say the managers from the west were all treated with suspicion although a lot of them did a 1st rate job we needed them. For political reasons the east german industrial elite had become pariahs. Were losing jobs every single day and no longer know how to keep these people busy because the order books are empty. In part because the east germans stopped buying their own products then you have to pick up the pace even if it means losing thousands of jobs in the 1st 3 years if my memory serves me right we lost over half of all jobs in industry and then you come and say that we pushed the pace come on lets. Hear. You the longer we drag things out the more the market might have turned against us if we drag things out the Companies Might have sold for even less that was part of the argument in favor of such a rapid pace. Of the animals out of but some things need time and it can take 2 years not one month to see the benefits of restructuring thats why our business is to see. Radical privatization put huge numbers of companies on the chopping block some firms in the west gleefully went on a shopping spree many east germans felt it was a takeover. Western Business Executives came east some of them some not. Basically created a bonanza for west german investors who were quick to see the opportunity and knew how to muster up the money to take over companies. They also made their influence felt at the time. German companies sent their own people to the. Which wasnt simply a matter of altruism to help with the distribution of what had formerly been state owned assets. The arguments they used were ridiculous void of the incompetent then there was the issue of east german industry competing with that in the west Mechanical Engineering companies and saxony with companies and bought and rutenberg at the time of reunification with the west german industry was at about 80 percent capacity by ramping up to full capacity they could also serve the tiny east German Market and east germans were silly enough to say we dont like our own little voice anymore give us west german live a voice has the. Supermarkets were flooded with products from the west and snapped up by east germans eager to finally enjoy the same standard of living. Humans people didnt want to hear that by refusing to buy their own products which they loved and hated for years they were bringing economic difficulties upon themselves. At the same time west german industry realized it could reap profits by question any potential competition from the east. The competition from the west to solve very clearly that if they didnt buy a company it might end up getting government money and then becoming a rival. Yes but which one as you can and i do think that Company Boards in the west sat down with the banks and said lets snap up the companies in the east and later we can decide how much of their workforce we want to keep on. Many west German Companies bought up firms in the east only to shut them down that was another reason so many fail to survive in the free market at the height of the trade hands operations the social impact had become devastating nearly 3000000 people in the east had lost their jobs and their prospects for a better future. But there were Success Stories during the communist era sex and he had 2 large furniture making groups employing 26000 people following reunification they were broken up into sepaRate Companies robin own your dresden is home to the rosa furniture factory back in 1991 its boss and workforce faced an uncertain future. Im at 1st there was no question of us taking over the company ourselves we east germans were practically penniless. Im deeply you cant talk in black and white terms about the toy hond there was corruption on all fronts and among the people buying and selling books and at the end of the show but i also know some excellent people who really toiled away to help companies and find solutions for privatization. There were all sorts at the toy hunter on this pursuit but the. More than 140. 00 furniture factories were on the trade hands for sale list including. Detroit had offered management buy out options. So you might say ok so people could have gotten a loan. But of course the banks wanted collateral i still have great admiration for those east germans who had the courage to buy a company. Called. Those companies faced a ruthless struggle for survival in the search for investors to. The common cause and of course we had every major german furniture producer here interested in those but they all said no i was then summoned to the toy hand in berlin where they said something ill never forget. You have 4 weeks to privatized or otherwise hand over the keys and at the time the company was still running at a big deficit. In 400 there were maybe 30 people at the negotiations i had bank people on either side the banks its just theres no point saying youre happy with the conditions only for the bank to say that it wouldnt put up the money to finance you wish. There was a tax advisor and a Business Consultant next to me and we had very constructive talks with the toy. Thats in manhattan so we did get the funding. Without that it wouldnt have been possible before. But i was sort of putting a noose around my neck i was in the company needed several 1000000. 00 mark the 3 of us Company Partners were 100 percent personally liable for all the loans we signed and our spouses to life that. Looking back now those contracts were almost immoral. My wife became personally liable when she signed for these massive loans but she did get nervous sometimes especially when the Company Initially continued to make a loss. But when you introduce measures to restructure a company you do that because you believe its the way to go. But those measures wont take Effect Tomorrow or the day after it takes 6 weeks or 8 weeks while underway as keplers father owned a company that was nationalized by the east German Government in the early 1970 s. His own entrepreneurial instincts helped keep them afloat from the field out of 144 east german firms some of them getting significant investment to open new factories none of them survived we were the only ones to make it. By late 1902 more than half the companies in the state owned business groups had been privatized or shut down. Criticisms of the toy never gone away the individual privatization decisions are and always will be controversial there were west german investors criticizing the toy hond liberal west germans who called it a monster of bureaucracy and they were east germans who were critical to of course the Political Party that was the successor to the communist party the media so the criticism was relentless and for the public of course this breathtaking pace was bewildering which is. Kind of. The new east german states were buffeted by the storm of privatization the economic and social disruption had a Lasting Impact large parts of the eastward industrialized and remain so today. The German Government and finally realize what was happening but by then it was hard to change course. Privatisation was increasingly disputed also within the toy hunt now even people in the toy hunt wondered whether the pace have been too fast and thats where you see this gradual shift in 1902 in 93 where it became a political issue and there was a lot more intervention from the government and. The German Government no longer wanted to leave everything to the free market the head of the tri hand was told to take a new tack the focus now was on selvedge ing socalled industrial cores. Political considerations also played a role. There was some very heated discussions there was some who said we ought to determine from above what was to be retained as industrial course. And we said we would determine on the ground with local import what might be salvageable and then build it up until it could survive that was the big difference with us they want which. In most cases the answer is still look like the wrecking ball most companies needed more than simple restructuring they would need to be rebuilt from the ground up with billions of dollars to marks from government subsidies. In the city of you know the strategy worked under the chairmanship of the west german politician and former executive of the once state owned optical instruments maker carl size became a symbol of a different industrial policy its success was made possible by subsidies totaling more than 3000000000 marks and investment that contradicted the original plan to leave privatization to Market Forces was the change in strategy too little too late a launch towards everyone was proud of now having this Little Company in the us its easy to say now of course but thats what we should have done in every state of eastern germany. The 3000000000 or whatever it was or even 10000000000 was not the issue. With the Chemical Industrial complex in lawyer no was given subsidies of more than a 1000000000. 00 marks french state owned oil company over 10 was awarded the contract for the former east german firm together with the meenal chain of gas stations. The complex would be turned into the most modern oil refinery in europe which is today the powerhouse of the regional economy it would later emerge however the elf time had paid close to 200000000. 00 marks in bribes be a middleman. Who exactly received the money and whether members of helmet calls government might have been involved was never determined but as the tri hand moved into a new phase it was loner that demonstrated that replacing the free hand of the market with deliberate planning could reap benefits this one but so they were ultimately political decisions both when it came to what was rescued because some things were rescued and what was not rescued and it wasnt. Just remember when helmut kohl said the law in the complex had to be saved it was saved. So much that was done was counterproductive. Why could learn to be saved while other things werent followed and when a Major Company took over a car factory and converted it to build Something Else while preserving the workforce why couldnt that be done in other places. So which is asians were right and which were wrong by the end of the winter of the tri hand nobody knew in 1993 the potash mine in vision for what it was closed even suing miners Hunger Strike came to symbolize east germans feeling of helplessness many felt betrayed believing that west german executives and politicians were pulling the strings behind the scenes of my that in the uk but us as i remember things what we were trying to set in motion was a responsible procedure. Because what happened in be shuffled rhoda is depressing and the Hunger Strike did trouble us immensely maybe it was just the most extreme case of too many decisions being taken that people simply no longer wanted the good talking to the mention of of the boys. In addition many cases of criminal behavior on the part of individual try to find staff were now coming to light in the Branch Office in the city of harlow 21 staff collaborated with investors from both east and west in a network of Corruption Cases like these further damage the try hunter reputation. Got it is and its the files and its not its that final phase in 1903 in 1904 that cemented the image you still see in the media today. Its a scandal ridden Government Agency associated with failures corruption and criminal activity. There was a government investigation and huge debates with. The good news out of tens of thousands of privatization procedures by the end there were only 1500 criminal investigations. You had crooks coming from all over europe and not just from germany out for their piece of the pie. Despite the enormous scale there were just 100 or 150 convictions for every one was surprised that there werent more. Bushs leave me or. The Privatization Program resulted in a radical transformation of the distribution of wealth in the east many local people were left empty handed the industrial sector lost jobs and permanently like to behind the west the 21 didnt just contribute to d. And dust realisation its policies and its unshakable belief in the power of the market served to accelerate the process. In the most clear troi hand it ended with a deficit of 230000000000. 00 or 115000000000. 00 euros all of that money went to eastern germany it was a transfer of capital from west to east and the contracts we negotiated involved investment commitments almost totally the amount of losses. That too was transferred to eastern germany in the form of capital or investments so we did try to do something productive with the used to. Be a good broil had arguably the most difficult task in the process of unifying east and west germany she shouldered the responsibility that others share. With god there were awful things that had to be done which had a radical impact on people and painful impact which were done by the toy heart and the. The blame. Of i was taken aback to see all the anger being directed at the toy honda not the parliament or the government they were the ones actually responsible lives out of. The trauma and feeling of humiliation among east germans had their roots not in the troy hind but in government policy. Politicians from west and east lost sight of the idea that people were to have a share in their National Assets. East germans had neither the financial means nor the knowledge to have a hand in the transformation and were simply overrun by it alternatives such as giving them ownership of their apartments or minorities stakes in their companies were dismissed. And government orders the troika and oversaw the biggest Corporate Breakup in history what some saw as a takeover. Often used the image of west and east germans that they mocked for 100 meter race and when the starting gun sounds the east german stay in their blocks because they couldnt buy anything its a cult. Instead many ended up themselves believing that their former National Assets were worthless. And carol there was a core and that core could have been handed to the east germans that would have resulted in a homegrown class of east german entrepreneurs a great opportunity was missed. On december 31st 1994 the troy hunt shut its doors. If i was happy to be able to go home and thought that weve done what we could do with all the mistakes that weve made in the process. You know what id always been came to go hand. In a time of National Transformation the government and the tri hand handed over the reins to Market Forces despite increased prosperity and economic revival in the former east germany a lasting trauma remains and the social and political repercussions cast their shadow to this day. 21 special. Program. Words combined into sentences to tell stories words printed to become. That can open new worlds for their readers. Stories matter a programme about books and makers. 30 minutes w. World unto itself. With its own gravitational pull. The finest musical compositions. With some mysteries terrific. To me that he was into them dont tell me that there are few better roads. And the. Field the city of johannesburg. The problems code. Starts october 11th told you enough. This is the news of live from berlin in iraq almost 100 people have been killed and thousands wounded in 5 days of violent government protests. More people died in clashes today between police and demonstrators. Drive police are out on the streets in force in hong kong as the probe aging government evokes Emergency Powers prodemocracy demonstrators defy if they