Moreover, the decision by the business and political sectors in the old federal states to take the West as the yardstick in (almost) all things, without consideration for a few quite progressive achievements in the East, created new problems at times. Here, I shall mention the Water and Wastewater Enterprises [WABs or Wasser- und Abwasser-Betriebe].
The western model was transferred to the East 1:1. Consequently, the WABs had to be transferred to the municipalities. The result can be seen today: inflated prices and plants that are too big. The consulting provided by some Western engineering firms played no small part in this bad decision. It would surely have been better to preserve the WABs as AGs [joint-stock corporations] or as GmbHs [limited liability companies] and to allow the municipalities to sell their shares. Given the way they were eventually dealt with, one might just as well have broken them up right away.
Among the misguided developments was also the half-hearted dissolution of the Treuhandanstalt. From the outset, it was the Treuhand’s declared goal to dissolve itself as thoroughly as possible at the earliest possible date. After all, the issue was to put an end to this large administrative economic agency under direct federal oversight in order to allow for normal federal structures. Instead, the federal government and the Länder decreed an extension of the special economic system for the East German states. This meant, among other things, that many a generous subsidy continued to flow from the federal treasury, with or without political pressure, and that independent entrepreneurship had a difficult time developing. A wait-and-see attitude spread before nary a sleeve was rolled up.
[ . . . ]
Source: Birgit Breuel, “Die Treuhandanstalt – Zielvorgaben, Rahmenbedingungen und Ergebnisse” [“The Trusteeship Agency – Objectives, Basic Parameters, and Results”] in Birgit Breuel and Michael C. Burda, eds., Ohne historisches Vorbild. Die Treuhandanstalt 1990 bis 1994. Eine kritische Würdigung [Without any Historical Model: The Trusteeship Agency from 1990 to 1994. A Critical Assessment]. Berlin: Bostelmann & Siebenhaar, 2005, p. 13 ff.
Translation: Thomas Dunlap
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