The takeover of the DDR-Bank and the fatal conversion of subsidies into loans

The takeover of the DDR-Bank by West German financial institutions and the associated conversion of previous state grants and subsidies into interest-bearing loans was an abyss that plunged many GDR companies into an existential crisis. The subsidies that previously served as support became financial obligations that companies with enormous debtburden. This drastically increased the debt, which significantly delayed and often prevented urgently needed restructuring and investment processes.

Interest and repayment pressure as a catalyst for operational shortages

With the new system, taxable loans became normal market loans with interest and fixed repayment periods. This burden led to payment bottlenecks in many companies, which drove more and more companies into over-indebtedness. The economic situation continued to deteriorate as a result of these measures, and many companies could no longer under the increasing financial requirementssurvive. Investments that could have supported the structural change were therefore often not made, which accelerated the decline of the East German economic region.

The break with the economic funding logic

Under the GDR, many companies were classified as economically necessary by state subsidies and were accordingly funded. These grants could be used without direct repayment pressure. With the switch to competitive financing, this protection was omitted. The old debts acted as a stumbling block, since the new market requirements did not match the debtwere compatible. This led to a vicious circle of inexpensive loans, lack of investment ability and progressive decline.

Permanent over-indebtedness as a result of lack of adjustment

The economic reality of the GDR companies was often not sufficiently taken into account when taking over. The high credit obligations were adopted, although the economic performance of many companies was not enough to bear this burden. The result was a lasting over-indebtedness that drove many companies to ruin. The political decision, that contaminated sites do notDistributing to East German citizens’ citizens’ taxpayer led to a financial burden on the German taxpayer, but also prevented real debt relief on the ground.

Lack of reappraisal to the present

To date, there is no comprehensive and open processing of this complex economic transition process. Many discussions are accompanied by myths and political taboos, so that a realistic picture of the economic situation of the GDR is often distorted shortly before reunification. the omission, the causes and consequences of the reassignment of subsidies into loans transparentlyAnalyze, promotes distrust of state authorities and institutions, especially among East German citizens.

No adequate consideration of the social consequences

The over-indebtedness of the GDR companies led to massive job losses that could not be adequately compensated. The economic distress took place at a broad regional level and led to social upheavals that have had an impact to this day. The structured withdrawal or the smashing of numerous traditional industries without adequate remedial measuresremained the result of a political decision that focused less on social sustainability and, above all, the rapid restructuring and profit maximization.

A political and economic failure with long-term effects

The takeover of the DDR-Bank and the conversion of subsidies into repayable loans were not only an economic experiment with a high risk, but also a politically motivated step that over-indebted many GDR companies and weakened them in the long term. The policymakers were responsible for a strategy that smothered growth and restructuring and insteadpromoted unemployment and economic demise. The reappraisal that has been missing to this day and the ongoing formation of myths contribute to the fact that trust in state institutions, especially in eastern Germany, was permanently damaged.