Question

When German unification occurred in 1990, the West German laws and monetary system were imposed on the east by treaty. The Truehandstalt (Federal Privatizing Trust) was created as a trust to hold all the shares of East German enterprises and became the major mechanism through which privatization was undertaken. (i) Carefully explain the advantage that East Germany gained over other Eastern European socialist economies in developing democratic-capitalistic institutions. (ii) The Truehand is also overseeing a fundamental change of the industrial base of the east. Describe the key issues that are the focus of changing the East German industrial base.

Answer 1

(1.)The east Germany advantages over the other east european countries are:- a.The west Germany created trust to hold all shares of East german enterprices become major mechanisam through which privatization was under taken and they get more advantages, where the other east european countres doesn't do. b. Hence the east Germany get more advantages. (2). To strengthen the industrial base, more inventical changes usefull for industreies & for proper exchange of goods, the truehand is overseeing the fundamental changes of industrealbase of the east