Germany
Federal Republic of
Country in central Europe, bounded north by the North and Baltic
Seas and Denmark, east by Poland and the Czech Republic, south
by Austria and Switzerland, and west by France, Luxembourg, Belgium,
and the Netherlands.
Government
With reunification 1990 the German government remained almost identical
to that of former West Germany. It is based on the West German
constitution (the Basic Law), drafted in 1948-49 by the Allied
military governors and German provincial leaders in an effort
to create a stable, parliamentary form of government, to diffuse
authority, and to safeguard liberties. It borrowed from British,
American, and neighbouring European constitutional models. It
established, firstly, a federal system of government built around
ten (16 since reunification) Länder (federal states), each with
its own constitution, elected parliament, and government headed
by a minister- president. The Länder have original powers in education,
police, and local government, and are responsible for the administration
of federal legislation through their own civil services. They
have local taxation powers and are assigned shares of federal
income tax and VAT revenues, being responsible for 50% of government
spending.
The constitution, secondly, created a new federal parliamentary
democracy, built around a two- chamber legislature comprising
a directly elected 672-member lower house, the Bundestag (federal
assembly), and an indirectly elected 69-member upper house, the
Bundesrat (federal council). Bundestag representatives are elected
for four-year terms by universal suffrage under a system of `
personalized proportional representation´ in which electors have
one vote for an ordinary constituency seat and one for a Land
party list, enabling adjustments in seats gained by each party
to be made on a proportional basis.
Political parties must win at least 5% of the national vote
to qualify for shares of `list seats´. Bundesrat members are nominated
and sent in blocs by Länder governments, each state being assigned
between three and five seats depending on population size. The
Bundestag is the dominant parliamentary chamber, electing from
the ranks of its majority party or coalition a chancellor (prime
minister) and cabinet to form the executive government. Once appointed,
the chancellor can only be removed by a `constructive vote of
no confidence´ in which a majority votes positively in favour
of an alternative leader.
Legislation is effected through all- party committees. The Bundesrat
has few powers to initiate legislation, but has considerable veto
authority. All legislation relating to Länder responsibilities
requires its approval, constitutional amendments need a two-thirds
Bundesrat (and Bundestag) majority, while the Bundesrat can temporarily
block bills or force amendments in joint Bundestag-Bundesrat `conciliation
committees´. Bundestag members also join an equal number of representatives
elected by Länder parliaments in a special Bundesversammlung (federal
convention) every five years to elect a federal president as head
of state. The president, however, has few powers and is primarily
a titular figure.
The 1949 constitution is a written document. Adherence to it
is policed by an independent federal constitutional court based
at Karlsruhe which is staffed by 16 judges, who serve terms of
up to 12 years. All-party committees from the Bundestag and Bundesrat
select eight each.
The court functions as a guarantor of civil liberties and adjudicator
in Federal-Land disputes. (Similar courts function at the Land
level.)
History
Germany divided
In 1949 Germany was divided by the Allied powers and the USSR, forming
the German Democratic Republic (East Germany) in the eastern part
of the country (formerly the Soviet zone of occupation), and the
Federal Republic of Germany (West Germany) in the west (comprising
the British, US, and French occupation zones under Allied military
control following Germany's surrender at the end of World War
II in 1945).
For the next four and a half decades West and East Germany were
divided by the policies of the Cold War, with West Germany becoming
the strongest European NATO power, and East Germany a vital member
of Comecon and the Warsaw Pact. During the era of Soviet leader
Leonid Brezhnev, Soviet medium-range nuclear missiles were stationed
on East German soil.
The formation of the Federal Republic In postwar West Germany,
a policy of demilitarization, decentralization, and democratization
was instituted by the Allied control powers and a new, intentionally
provisional, constitution framed, which included eventual German
reunification. The Federal Republic (West Germany) came into existence
on 23 May 1949, when the Basic Law, or constitution, was signed
by members of the Parliamentary Council in the presence of the
Allied military governors (thereafter called commissioners).
West Berlin was blockaded by the Soviet Union 1948-49 (see Berlin
blockade), but survived to form a constituent Land in the Federal
Republic, after an airlift operation by the Allied powers.
Adenauer comes to power in West Germany
Politics during the Federal Republic's first decade were dominated
by the Christian Democratic Union (CDU), led by the popular Konrad
Adenauer .
The first elections to the Bundestag, or lower house of the
German Federal parliament, were held on 15 August 1949, the Christian
Democrats emerging as the strongest party. Theodor Heuss was elected
first president of the Republic, and Adenauer was elected first
German Federal chancellor (16 September). The first government
of the Republic was a right-wing coalition. In the declaration
of policy of his government on 20 September Adenauer voiced the
determination of his ministers to cooperate closely with the Western
powers. In retaliation for the institution of the German Federal
Republic, an East German state, the German Democratic Republic,
was established under Soviet auspices in the eastern zone of Germany
in October 1949.
Economic recovery under Adenauer
Chancellor Adenauer and his economics minister, Ludwig Erhard, established
a successful approach to economic management, termed the ` social
market economy´, which combined the encouragement of free- market
forces with strategic state intervention on the grounds of social
justice.
This new approach, combined with aid under the Marshall Plan
and the enterprise of the labour force (many of whom were refugees
from the partitioned East), brought rapid growth and reconstruction
during the 1950s and 1960s, an era termed the `miracle years´.
In additional factor in Germany's economic performance was that
it did not have the rearmament burden of the other leading Western
countries.
Western defence alliances
During this period, West Germany was also reintegrated into the international
community. Adenauer's government supported the Federal Republic's
proposed participation in West European collective defence. This
subject, raising the question of a recreated German army and possible
conscription, caused considerable controversy in West Germany
over the next few years, and in many other countries, especially
France, where the prospect of a new German army was viewed with
much popular misgiving, in the light of recent history.
The German Social Democrats (SPD) were opposed to the Federal
Republic tying itself militarily to the West, primarily because
they claimed that this would prejudice any chance of German reunification
with East Germany; and this fear was played upon by Soviet propaganda.
However, Adenauer had the necessary majority to carry through
his policy, with only minor modifications. In the elections of
1953 his party increased its majority.
In 1952 it was agreed that on West Germany's formal joining
of the proposed European Defence Community (EDC) the Allied occupation
should end, although Allied troops would continue to be stationed
in the Federal Republic for German and European defence purposes.
The London and Paris agreements, which followed French rejection
of the EDC in 1954, resulted in West Germany being invited to
join NATO and officially restored to the Federal Republic full
sovereignty. French distrust of the German rearmament that this
involved was allayed by various safeguards. As a result, the Western
European Union, of which the Republic was a member, came into
being on 7 May 1955; and seven days later the Federal Republic
formally joined NATO, becoming a loyal supporter of the USA. A
small regular army was soon built up; but conscription was not
started until 1956-57.
In 1955 Adenauer visited Moscow. As a result, diplomatic relations
were established between the USSR and West Germany and the USSR
returned to Germany several thousand German prisoners still detained
in the USSR.
European integration
West Germany was admitted to the Organization for European Economic
Cooperation (OEEC; the predecessor of the OECD) in 1949; and became
a full member of the Council of Europe in 1951. It was one of
the founder members of the European Coal and Steel Community.
When in 1955, against Adenauer's advice, the inhabitants of
Saarland voted against `Europeanization´, and by implication,
in favour of union with West Germany, relations between France
and the Federal Republic were temporarily strained. Agreement
was eventually reached, however, as a result of which Saarland
was united to West Germany at midnight on 31 December 1956.
West Germany was one of the signatories of the Treaty of Rome
in 1957, under which the European Economic Community (EEC) came
into being on 1 January 1958. Germany has continued to play a
dominant role in the EEC and its successors, the European Community
(EC) and European Union (EU), and has been a constant advocate
of closer European integration.
After Charles de Gaulle's return to power in France in May 1958
relations between France and West Germany grew closer, due partly
to a personal friendship between Adenauer and de Gaulle. In January
1963 a `treaty of reconciliation´ between the two countries was
signed in Paris. When Adenauer retired from the chancellorship
later in the year, however, the warmth of Franco-German relations
began to diminish and differences between the two countries concerning
the future course of such organizations as the EEC and NATO became
more open.
Government in East Germany
The People's Council, elected in 1948, and consisting mainly of a communist-dominated
Socialist Unity Party (SED), was converted into a People's Chamber
(Volkskammer) on the establishment of the Democratic Republic
of Germany (7 October 1949). After that all elections were on
the pattern of a one -party list of candidates.
East Germany dissolved its five Lä nder (Brandenburg, Mecklenburg-
West Pomerania, Saxony, Saxony- Anhalt, and Thuringia) in 1952,
and its Chamber of States, or upper house, in 1958, vesting local
authority in 15 Bezirke, or administrative districts. Under the
1968 constitution the supreme legislative and executive body in
the German Democratic Republic was the Volkskammer (people's chamber),
whose 500 members (including 66 from East Berlin) were elected
every five years by universal suffrage.
The sovietization of East Germany
On the inauguration of East Germany , Wilhelm Pieck became the president,
Otto Grotewohl (former leader of the SDP in the East) became premier,
and Walter Ulbricht deputy premier. From the beginning the real
power resided with Ulbricht, who was first secretary of the SED
Politburo. After Pieck's death in 1960 the presidency was abolished,
and a council of state was elected by the Volkskammer. Its chairman,
who was given dictatorial powers, was Ulbricht. His position was
further strengthened after Grotewohl's death in 1964.
The years immediately after 1949 saw the rapid establishment
of a communist regime on the Soviet model, involving the nationalization
of industry, the formation of agricultural collectives, and the
creation of a one- party political system. East Germany made periodic
suggestions for talks on German reunification, but its drafts
invariably included clauses designed to perpetuate forcibly its
own communist regime, and were rejected by the Western powers
and by West Germany.
Shortly after its inauguration, East Germany recognized the
Oder- Neisse line as its permanent boundary with Poland, and acknowledged
the expulsion of over 2 million Germans from the Sudeten area
of Czechoslovakia as ` permanent and just´.
The 1953 revolt
From its inception the poverty of East Germany contrasted markedly
with the prosperity of West Germany , and the curbs on personal
liberties added to a discontent that found expression in the thousands
of refugees who poured into West Berlin, and thence to the Federal
Republic, from the eastern sector. In June 1953 opposition to
sovietization led, during food shortages, to severe rioting in
East Berlin and in several other East German towns. In Berlin
only the intervention of Soviet tanks restored order.
The revolt was followed by repressive measures, and though the
Democratic Republic was proclaimed a sovereign state in 1954 (recognized
at first only by the communist powers), large Soviet forces continued
to be stationed there until the collapse of the communist regime
in 1989.
The Berlin crisis of 1960-61
Friction between East and West Germany came to a head in 1960-61, because
of the continuing flow of refugees entering West Berlin from the
east. This had caused the population of East Germany to decline
sharply between 1949 and 1961 and was undoubtedly affecting its
economy adversely.
On 13 August 1961 East Germany closed the Berlin border, and
subsequently built a heavily policed wall along it (see Berlin
Wall). The flow of refugees was thus virtually stopped, though
a limited number of sensational successful escapes continued to
be made, together with many equally sensational and often fatal
failures, which severely shocked public opinion in the West.
From December 1963 an agreement was reached between the East
and West Berlin authorities under which West Berliners could visit
relatives in East Berlin and the Democratic Republic for limited
periods at festive seasons, and some elderly citizens of East
Germany were permitted to go and settle with their relatives in
the West.
Adenauer gives way to Erhard
In 1959 Heuss was succeeded as West German president by Heinrich Lubke.
After the elections of 1961 the Christian Democrats lost ground,
and governed in a coalition with the Free Democrats (FDP). Though
the economic boom continued, the CDU and its allies lost prestige
on account of various government scandals, and an increasingly
public rift between the ageing Chancellor Adenauer and his economics
minister, Erhard, centring on the question of Adenauer's retirement.
The emergence of a new and youthful SDP leader, Willy Brandt
- who had vaulted to international prominence as mayor of West
Berlin during the construction of the Berlin Wall - suggested
a strong threat to future CDU dominance of West German politics.
Erhard eventually succeeded Adenauer as chancellor in 1963 and
resigned in 1966.
Erhard had to face differences within his own party, and public
controversy on such matters as to whether the law should be amended
to allow for trials of war criminals to take place after May 1965
(when they would normally have qualified for the 20- year indemnity
exemption). Additionally, relations with several Arab states were
strained by West Germany's agreement to establish ambassadorial
relations with Israel, to whom, by 1965, it had completed payment
of large reparations for the Holocaust.
A closer understanding with Britain was reflected in a highly
successful state visit of Queen Elizabeth II to West Germany in
1965, and by a subsequent agreement between the two countries
on a West German contribution towards the support costs of the
British Army of the Rhine. In September 1965 Erhard led his party
to victory in the federal general election.
Brandt and Ostpolitik
During the 1960s Willy Brandt played a major role in shifting the SPD
away from its traditional Marxist affiliation towards a more moderate
position. Support for the SPD steadily increased after this policy
switch and the party joined the CDU in an uneasy `grand coalition´
(1966-69), with Brandt as the junior partner and foreign minister
to CDU chancellor Kurt Georg Kiesinger.
But by the later 1960s most younger people felt that the time
had come to face realities and regularize West Germany's relations
with its eastern neighbours. This mood found expression in Brandt's
foreign policy of Ostpolitik (`eastern policy´), which sought
reconciliation with Eastern Europe as a means of improving contacts
between East and West Germany.
The SDP, with Brandt as chancellor, gained power in 1969, with
the support of the FDP under Walter Scheel (1919- ). Under Brandt's
moderate socialist government, West Germany concluded treaties
with Poland and the USSR (1970), treaties that normalized relations,
recognized the de facto boundaries, and provided for limited cooperation
in various fields. In 1972 a treaty was effected with East Germany,
acknowledging East Germany's borders and separate existence and
enabling both countries to enter the United Nations in 1973.
In 1974 Brandt was forced to resign after the revelation that
his personal assistant (Günther Guillaume) had been an East German
spy, and was succeeded by Helmut Schmidt. Also in 1974, Gustav
Heinemann (1899- 1976), president since 1969, was succeeded by
Walter Scheel.
Developments in East Germany in the 1960s and 1970s
Apart from the unsuccessful uprisings of 1953, East Germany proved
a notably quiescent member of the Eastern bloc. By the 1970s there
was a considerable improvement in living standards and the availability
of consumer goods. East Germany's policy of economic austerity
had yielded good results, and by 1969 it had a higher per- capita
GNP (gross national product) than Austria, Japan, and Italy, almost
two-thirds that of West Germany, and it was the world's 10th industrial
power.
During the 1970s there was some relaxation in government rigidity,
a more moderate political stance was adopted, and the Stalinist
Walter Ulbricht was replaced as leader of the Socialist Unity
Party (SED) by the pragmatic Erich Honecker. Economic and diplomatic
relations with the West were extended. In 1972-73 the number of
countries officially recognizing East Germany soared, and East
Germany achieved international status as an independent state,
although the West German constitution continued to declare that
there was only one German nationality.
Schmidt's centrist course
As SPD chancellor of West Germany, Helmut Schmidt adhered to Ostpolitik
and emerged as a leading advocate of European cooperation. In
the 1976 general election Schmidt's SDP-FDP coalition won a narrow
majority over the CDU-CSU alliance headed by Dr Helmut Kohl. The
CSU is the more right-wing sister party of the CDU in Bavaria,
and in the 1980 election the CDU-CSU alliance was headed by the
CSU leader, the controversial Franz-Josef Strauss, but was once
more comfortably defeated by the SPD-FDP coalition.
Between 1980 and 1982, the left wing of the SPD and the liberal
FDP were divided over military policy (in particular the proposed
stationing of US nuclear missiles in West Germany ) and economic
policy.
Chancellor Schmidt fought to maintain a moderate, centrist course
but the FDP eventually withdrew from the federal coalition in
1982 and joined forces with the CDU, led by Helmut Kohl, to unseat
the chancellor in a `positive vote of no confidence´. Helmut Schmidt
immediately retired from politics and the SPD, led by Hans-Jochen
Vögel, was heavily defeated in the Bundestag elections in 1983,
losing votes on the left to the new environmentalist Green Party.
Kohl's chancellorship in the 1980s
The new Kohl administration, with the FDP's Hans-Dietrich Genscher
remaining as foreign minister, adhered closely to the external
policy of the previous chancellorship, while at home a freer market
approach was introduced.
Unemployment rose to 2.5 million in 1984, problems of social
unrest emerged, and violent demonstrations greeted the installation
of US nuclear missiles on German soil in 1983-84. Internally,
the Kohl administration was rocked by scandals over illegal party
funding, which briefly touched the chancellor himself. However,
a strong recovery in the German economy from 1985 enabled the
CDU-CSU-FDP coalition to gain reelection in the federal election
in 1987.
During 1988-89, after the death of the CSU's Franz-Josef Strauss,
support for the far-right Republican Party began to climb, and
it secured 7% of the vote in the European Parliament elections
of June 1989. In 1989-90 events in East Germany and elsewhere
in Eastern Europe caused half a million economic and political
refugees to enter the Federal Republic (see below); they also
prompted the reopening of the debate on reunification ( Wiedervereinigung).
This resulted in West German politics becoming more highly charged
and polarized. The CDU gave strong support to swift, graduated
moves towards ` confederative´ reunification, if desired, following
free elections in East Germany.
Exodus to West Germany
In East Germany Honecker had been urged by the liberalizing Soviet
leader Mikhail Gorbachev since 1987 to accelerate the pace of
domestic economic and political reform; his refusal to do so increased
grassroots pressure for liberalization. In September 1989, after
the violent suppression of a church and civil- rights activists'
demonstration in Leipzig, an umbrella dissident organization,
Neue Forum (New Forum), was illegally formed.
The communist regime was further destabilized between August
and October 1989 both by the exodus of more than 30,000 of its
citizens to West Germany through Hungary (which had opened its
borders with Austria in May) and by Honecker's illness during
the same period.
Reform in East Germany
On 6 and 7 October 1989 the Soviet leader Mikhail Gorbachev visited
East Berlin, and made plain his desire to see greater reform.
This catalyzed the growing reform movement, and a wave of demonstrations
(the first since 1953) swept East Berlin, Dresden, Leipzig, and
smaller towns. At first, under Honecker's orders, they were violently
broken up by riot police. However, the security chief, Egon Krenz,
ordered a softer line and in Dresden the reformist Communist Party
leader, Hans Modrow, actually marched with the protesters.
Faced with the rising tide of protest and the increasing exodus
to West Germany (between 5,000 and 10,000 people a day), which
caused grave disruption to the economy, Honecker was replaced
as party leader and head of state by Krenz (18-24 October). In
an attempt to keep up with the reform movement, Krenz sanctioned
far-reaching reforms in November that effectively ended the SED
monopoly of power and laid the foundations for a pluralist system.
The Politburo was purged of conservative members; Modrow became
prime minister and a new cabinet was formed; New Forum was legalized,
and opposition parties allowed to form; and borders with the West
were opened and free travel allowed, with the Berlin Wall being
effectively dismantled.
Moves towards reunification
In December 1989 West German Chancellor Kohl announced a ten- point
programme for reunification of the two Germanys. While the USA
and USSR both called for a slower assessment of this idea, reunification
was rapidly achieved on many administrative and economic levels.
By mid-December the Communist Party had largely ceased to exist
as an effective power in East Germany.
Political crisis in East Germany
Following revelations of high-level corruption during the Honecker
regime, Krenz was forced to resign as SED leader and head of state,
being replaced by Gregor Gysi (1948 - ) and Manfred Gerlach (1928-
) respectively. Honecker was placed under house arrest awaiting
trial on charges of treason, corruption, and abuse of power, and
the Politburo was again purged. (Honecker was finally allowed
to leave Germany for exile in Chile in January 1993.)
An interim SED-opposition ` government of national responsibility´
was formed in February 1990. The political crisis continued to
deepen, with the opposition divided over reunification with West
Germany, while the popular reform movement showed signs of running
out of control after the storming in January of the former security-police
(Stasi) headquarters in East Berlin. The economy continued to
deteriorate - a total of 344,000 people had fled to West Germany
in 1989 and 1,500 continued to leave daily - and countrywide work
stoppages increased.
East German elections in March 1990 were won by the centre-right
Alliance for Germany, a three-party coalition led by the CDU.
Talks were opened with the West German government on monetary
union and a treaty unifying the economic and monetary systems
signed in July 1990.
Reunification
Official reunification came about on 3 October 1990, with Berlin as
the capital (although the seat of government initially remained
in Bonn). In mid-October new Länder elections were held in former
East Germany, in which the conservative parties did well. The
first all-German elections since 1932 took place on 2 December
1990, resulting in victory for Chancellor Kohl and a coalition
government composed of the CDU, CSU, and FDP, with only three
former East German politicians. In Berlin, which became a Land,
the ruling SPD lost control of the city council to a new coalition
government. The former states of East Germany resumed their status
as Länder.
Social conflict
During 1991 divisions grew within the newly united nation as the economy
continued to boom in the west, while in the east unemployment
rose rapidly. More than 90% of Ossis (easterners) said they felt
like second-class citizens, and those in work received less than
half the average pay of the Wessis (westerners). Hundreds of racist
attacks on foreigners took place, mainly in the east. Public support
for Kohl slumped, notably after taxes were raised in order to
finance both the rebuilding of the east and the German contribution
to the US-led coalition against Iraq.
Economic crisis in the east
Eastern Germany's GDP fell by 15% during 1990 and was projected to
decline by 20% during 1991, with a third of the workforce either
unemployed or on short time. There were large anti-Kohl demonstrations
and outbreaks of right-wing racist violence in eastern cities
March-April 1991 as the economic crisis deepened. In western Germany,
the ruling CDU suffered reverses in state elections during the
spring of 1991 as Wessi voters reacted against Kohl's backtracking
on his promise not to raise taxes to finance the east's economic
development.
Defeat in Kohl's home Land of Rhineland-Palatinate in 1991 meant
that the CDU lost, to the SPD, the majority it had held in the
Bundesrat (upper chamber) since October 1990. In May 1991 Björn
Engholm, the minister-president of Schleswig- Holstein since 1988,
was elected chair of the SPD. He replaced Hans- Jochen Vögel,
who continued as the SPD's leader within the Bundestag.
In June 1991 the Bundestag (lower chamber) voted to move to
Berlin. The Bundesrat (upper chamber) the following month voted
to remain in Bonn, agreeing to reconsider its decision in later
years.
Racist violence
Throughout 1991 and 1992, neo- Nazi and other far-right groups continued
their campaign of violence against foreigners. A shift to the
right emerged in elections in Bremen in September 1991, with support
for the CDU and the right-wing, anti- foreigner German People's
Union rising significantly.
Recession
By January 1993 unemployment exceeded 7% and, as recession gripped
the country, a 1% decline in national output was predicted for
the year ahead. Rudolf Scharping took over as SPD leader in April
1993. In July, parliament introduced restrictions on asylum seekers
(more refugees from the Balkan civil wars had been received by
Germany than by all other countries combined). In a state election
in Hesse in March 1993 support for the CDU slumped while the extreme-right
Republicans captured 8% of the vote.
Kohl elected to fourth successive term In May 1994 Chancellor
Kohl's nominee, Roman Herzog, was elected president. A resurgence
of the German economy helped the ruling CDU-CSU-FDP coalition
to secure a narrow 10-seat majority in the October 1994 Bundestag
elections. Support for the opposition SPD and the Greens increased,
while the reform-communist Party of Democratic Socialism - strong
in the east - achieved the election of 30 deputies. The following
month Kohl was reelected to an unprecedented fourth successive
term as chancellor.
At the start of 1995 the government banned leading neo-Nazi
groups in a determined effort to curb right-wing racial violence,
and in June the Bundestag broke with a 50-year taboo and approved
the deployment of 1,500 soldiers and medical staff in the Balkans
region. This followed a 1994 constitutional court ruling that
allowed for armed missions outside of the NATO region provided
they were for humanitarian reasons. Support for the SPD slumped
to a postwar low of 23% in state elections in Berlin in October
1995, and the following month Oskar Lafontaine replaced Rudolf
Scharping as SPD leader.
Worsening economic conditions
By the end of 1995 unemployment had reached a postwar high of 3.8 million
and in January 1996 the Kohl government announced a 50-point reflation
plan to tackle the problem. In a bid to reduce the public sector
deficit to 3% of GDP by 1997, enabling entry into the European
Union's economic and monetary union (EMU) in 1999, a DM 70 billion
($46 billion) savings package was announced. Plans to reform the
welfare system by cutting sick pay and job protection, raising
the retirement age, and freezing public- sector pay for two years
were rejected by trade unions and employers and a spate of warning
strikes by public sector workers accompanied the country's entry
into recession. Federal tax reforms were rejected by the country's
16 states (L änder) in May 1996. In a referendum in the same month
voters in Brandenburg rejected a merger with Berlin.
In November 1996 the government announced plans for emergency
spending cuts to hold the budget deficit below 3%, the ceiling
set for participation in European economic and monetary union.
Measures to cut social welfare benefits, including unemployment
benefit and sick pay, caused widespread industrial unrest.
In January 1997 unemployment rose to a postwar record of 4.7
million, representing 12.2% of the labour force (10.6% in western
Germany and 18.7% in eastern Germany).
Political trials
Egon Krenz, East Germany's last hardline Communist leader, was jailed
in August 1997 after being sentenced to six and a half years for
the deaths of people trying to escape over the Berlin Wall. Two
other members of the East Germany's Politburo were found guilty
of manslaughter for killings at the Wall.
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