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Yes, Let's Get Together, But . . .
One would think that Heinz Lyscik, director of an East Berlin cabaret famous for its risque pillorying of the former political order, would be overjoyed at the fall of the Communists and the prospect of unification with the West. Imagine: no more hassles with the censors, complete artistic freedom, new crowds from the West flocking to his place, Die Distel. But Lyscik is more worried than cheered. Under the Communists, he notes, "we got 13 marks per ticket in subsidies. Tickets cost patrons only 1.50 marks. Now we are already up to 4 to 8 marks, and we don't know from day to day if we will continue getting our subsidy. If not, we'll have to start charging the 30 to 40 deutsche marks they charge in the West. What kind of audience will we have then? "
Polls show that two-thirds of East Germans and three-fourths of West Germans favor unification. But with unification likely to take place sooner than almost anyone expected, East Germans are beginning to realize that they are going to lose the attractive sides of communism (subsidized housing, guaranteed jobs) as well as the less desirable aspects (secret police, censorship). Across the border, meanwhile, West Germans are starting to fret about the high costs of adopting their poor relations.
Last week's agreement between the two countries to start immediate negotiations to replace the East German ostmark with the West German deutsche mark provided the starkest reminder yet of the downside of unification. The immediate aim of the monetary union is to stanch the East German stampede to the West, which continues at the rate of 2,000 a day. The theory is that if Easterners were more confident about their country's economic future, they would be less prone to flee. The first step in that process is to replace East Germany's funny money with West Germany's stable, convertible currency.
Easterners, though, will have to pay to get their hands on hard marks. Even if the notes are traded at three ostmarks for one deutsche mark, the official rate of exchange for foreigners, East Germans will find their savings slashed by two-thirds overnight. The damage will be worse if the exchange rate is closer to the more realistic 10 to 1 offered on the black market. East Germans have a lot to lose; their personal savings total more than 150 billion ostmarks, or some $3,100 a person at the inflated exchange rate of three ostmarks to the deutsche mark.
Fearful of a sudden devaluation of their hoards, East Germans last week staged a minirun on banks, withdrawing cash for shopping sprees. "People are buying whatever has value," said a salesclerk at East Berlin's Zentrum department store.
After unification, East Germany will adopt West Germany's market-oriented economy, and the going could initially be rough for East German companies and workers. Aging and inefficient East German industries like automobile manufacturing, which produces the pathetic 26-h.p. Trabant, will face competition from modern, powerful West German counterparts like Daimler-Benz. This could cause widespread factory closures and job losses, which never happened in the old centrally controlled East German economy. A report by the European Community leaked two weeks ago estimates that East Germany, which now has a worker shortage, could have 15% unemployment -- 1.2 million workers -- in the first year of economic reforms.
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