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The Privatization of the GDR Economy (June 17, 1990)

In June 1990, the GDR Volkskammer passed the so-called Treuhandgesetz [Trusteeship Law]. It regulated the restructuring of the planned economy into a free market economy and the privatization of state owned property that this entailed. Together with the State Treaty Establishing a Monetary, Economic, and Social Union of May 18, 1990, and the Unification Treaty of August 31, 1990, it formed the basis for the work of the Treuhandanstalt [Trusteeship Agency], which was active from 1990 to 1994.

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Law on the Privatization and Reorganization of State Owned Property (Trusteeship Law) of June 17, 1990


Based on the intention
– to restore the state’s commercial activity as quickly and extensively as possible through privatization,
– to make as many businesses as possible competitive, thus protecting existing jobs and creating new ones,
– to provide real estate for economic purposes,
– to make it possible, after taking stock of state owned property, its productivity, and its priority usefulness in the structural adaptation of the economy and the stabilization of the national budget, to grant investors a vested right to shares in state owned property for a sum reduced through the monetary conversion of July 2, 1990, the following law is passed:


Article 1: Transfer of Property

(1) State owned property is to be privatized. In certain cases to be determined by law, state owned property can also be conveyed to the ownership of local governments, cities, districts, and states, as well as to the public.
State owned property serving local needs or providing local services is to be conveyed by law to local governments and cities.

(2) The Council of Ministers bears responsibility for the privatization and reorganization of state owned property and is accountable to the Volkskammer.

(3) The Council of Ministers appoints the Trusteeship Agency to implement the necessary measures.

(4) The Trusteeship Agency is, under the provisions of this law, the owner of shares in capital corporations that will be created, or that have already been created before this law takes effect, through the transformation of state owned combines, enterprises, institutions, and other legally independent economic units (hereinafter “economic units”) registered as state owned property.

(5) The provisions of this paragraph do not apply to state owned property if its legal owner is:
– the state,
– the German Post Office and its general management, the German Railways, the waterways administration, the public highway administration, and other state enterprises,
– enterprises or institutions answerable to local governments, cities, districts, and states,
– an economic unit for which, at the time this law takes effect, a liquidation notice has been entered in the registry of state owned property.

(6) For the privatization and reorganization of state owned property in agriculture and forestry, the trusteeship is to be organized to take account of economic, ecological, structural, and property-law particularities in these areas.

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