Economic stagnation in the 1980s Flashcards
An example of ideology outweighing performance
Return to centralised planning
The debt owed by the GDR to capitalist countries from whom it was borrowing at high rates of interest rose to astronomical proportions - provide evidence
Debt to capitalist countries:
1970 = DM 2.2 billion
1980 = DM 30 billion
1989 = DM 46 billion
What was the problem with high amounts of debt in the East German state?
The GDR could never export enough to finance it because of inefficient production techniques and limited demand for its products outside the Soviet bloc
What per cent of the GDR’s raw materials were bought from the USSR?
70%
Brezhnev had complained to Honecker that COMECON members were…
exploiting the Soviet Union by buying cheap oil from it and often selling the oil on to Western markets at great profit
What did the USSR announce in 1981?
It would reduce oil deliveries
What did Poland announce in 1981?
It was cutting coal exports
What was the response by the GDR to Poland cutting coal exports?
To develop lignite (a cheap brown coal)
Consequences of using lignite
It was inefficient and caused tremendous pollution because of its high sulphur levels (in weather forecasts heavy cloud became a euphemism for industrial smog)
The GDR was in a deep economic crisis by 1982 - how did the FRG help
It negotiated two massive loans:
- DM 1 billion in 1983
- DM 950 million in 1984
The aim of the 1981-85 Five-Year Plan
To invest more in modernisation and improve production
Regardless of the economic catastrophes what did Honecker maintain?
The Social Contract was still sacrosanct
It was still believed that improvements in social welfare would see…
commensurate improvements in productivity
Mary Fulbrook referred to the insistence on social benefits as…
“sacred cows that could not be slaughtered”
By the 1980s, as consumer expectations rose as a result of increasing awareness of Western quality goods, it became clear that…
the GDR was lagging further and further behind
