The Political Economy of German Unification

By Thomas Lange; J. R. Shackleton | Go to book overview

Chapter Four
PRIVATISATION IN THE NEW
BUNDESLÄNDER
A Critical Assessment of the Treuhand

K.H. Domdey


Introduction

One topic stood out very clearly in the debate over German monetary, economic and social unification: privatisation and the associated redefinition of property rights. The process of privatisation was facilitated by the establishment of the Treuhand- anstalt, a public body the sole purpose of which was to hand over state-owned properties to their previous owners in eastern and western regions or -- in the case of firms and industrial equipment -- to the most promising bidders from the private sector. According to the Treuhand Act, passed in June 1990 by the DDR (Deutsche Demokratische Republik) parliament and incorporated more or less unchanged into the Union Treaty with the Federal Republic, the Trust Agency for the Management of State Property -- generally known as the Treuhand -- was given the task of privatising and implicitly restructuring the DDR economy. Since being set up, the Treuhand has been at the centre of public debate.

____________________
This chapter draws on an earlier series of articles entitle `Die Wende: Präludium order Postludium der alten Epoche?', published in Berichte des Forschungsinstituts der internationalen Wissenschapftlichen Vereinigung Weltwirtschapft und Weltpolitik, No. 24-26, July- September1994, Berlen.

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