Former GDR minister: Western politicians still don’t grasp devastation of forced capitalist transition

Workers at the Eisenhüttenkombinat Ost 1952. Bundesarchiv

This article is based on an interview with Karl Döring, a former public servant in the government of the German Democratic Republic. Written by Jenny Farrell, the story here is told from Döring’s first-person point of view.

Born in 1937, Döring studied and earned a PhD in metallurgy in Moscow, served as production director at the VEB Quality and Stainless Steel Plant in the GDR, was the country’s deputy minister for mining (1979-85), and from 1985 onwards, was the general director of Eisenhüttenkombinat Ost (EKO), one of the GDR’s biggest steelworks.

From July to November 1990, he was the deputy chairman of the supervisory board of the Treuhandanstalt, the agency established by the West German government to oversee the privatization of the public property belonging to the people of the GDR. The full interview was published in German in Berliner Zeitung on Sept. 29, 2024.

The unification of Germany in 1990 brought hope, but that hope quickly turned into chaos for many in the former German Democratic Republic. As an East German who had an up-close view of the sweeping changes that followed, I experienced first-hand the transition from a planned economy to a market-driven system. My efforts to save Eisenhüttenkombinat Ost (EKO, Iron and Steel Combine), an industrial giant, and my time with the Treuhandanstalt (Trust Authority), the agency responsible for privatizing East German state enterprises, encapsulate the emotional and economic turmoil of that era.

The privatization processes following the annexation of the GDR into the Federal Republic form the core of my management experience in the “new world” of capitalism—with all its possibilities and impossibilities. Within our leadership team and the work’s council, which was established in early 1990, there was a strong determination to preserve the Eisenhüttenstadt site.

After all, it wasn’t just about a steel plant, but a complex metallurgical enterprise with ore production, blast furnace operations, the steel mill itself, as well as areas of steel processing and refining. The plant was modern and new. When the end of the GDR came, there were 12,000 people working at EKO. The entire town of Eisenhüttenstadt, along with the local economy, including bakeries, dairies, and salons, all depended on the steel plant; so did the surrounding region. It was obvious: “If the plant dies, so does the town.”

My role as an East German representative within the Treuhand was marred by conflict, as I was often seen as a troublemaker by my West German counterparts. The Treuhandanstalt’s two governing bodies were the supervisory board, overseeing operations, and the executive board, managing daily affairs. The former was initially chaired by Detlev Rohwedder, a pragmatist, who recognized the importance of including “Ossis” (East Germans) in decision-making. He supported my appointment to the supervisory board in 1990. This position, though unpaid, allowed me a direct line of sight to the serious decisions shaping the future of the East.

However, my time in this role was short-lived. When Rohwedder moved to head the executive board, he was replaced by Jens Odenwald, a West German whose attitude towards East Germans was anything but inclusive. Odenwald clearly viewed us as obstacles rather than partners. One by one, my colleagues and I were pushed out of decision-making processes. Meetings and committees were reorganized, with our names removed from the list of participants.

There were no confrontations, but rather a slow, insidious marginalization. I was told by Odenwald himself to “focus on EKO” and not worry about the broader operations of the Treuhand, a thinly veiled dismissal. Despite having been formally appointed by the GDR’s government, the West German authorities ignored our legal standing, offering no explanation for our exclusion. The Treuhand showed little regard for the expertise of East Germans, reflecting a general attitude of disrespect. Rohwedder, who was more conciliatory and less blatant, said: “Mr. Döring, give up, you have no chance—such is the current climate.”

Today’s political discontent in East Germany, seen in populist movements like the AfD, has roots in the post-unification years. The way East Germans were treated after 1990, particularly in economic terms, left many with deep feelings of humiliation and resentment.

I witnessed the devastation of mass unemployment; in Eisenhüttenstadt, it exceeded 20% in the 1990s, with little hope for recovery.  Many workers were offered severance packages similar to those in the West, but for people who had spent their entire lives working full-time, being told to take a payout and retire at 55 was crushing. Entire social structures, from workplace communities to local sports clubs, collapsed. The disillusionment extended to the next generation, who grew up watching their parents struggle with unemployment and economic insecurity.

Politicians in the West, then as now, have failed to grasp the magnitude of this devastation. They view unemployment as a manageable issue, unaware that in the GDR, joblessness was unimaginable. Overnight, millions find themselves out on the streets. Their collective bonds were gone – the company sports club and other places vanished. The sudden collapse of the GDR’s economic and social structures left deep scars that remain visible to this day.

The key difference between a functional planning system and the rigid system of the GDR lies in scope and flexibility. In the GDR, everything was planned down to the smallest detail, with little room for local decision-making or innovation.

A state-level planned economy can succeed if based on realistic policies, limited central planning, focused priorities, and autonomy for decision-makers. Economic subsidies should be rare, social subsidies kept reasonable, and prices should maintain their market-regulating role without central interference. With honest statistics and worker participation in the planning process, it could offer a viable alternative to today’s profit-driven economy.

Today, capital interests prevail, increasingly so, as the current sociopolitical system resembles more of a “chaos system.” There’s no longer a significant force representing majority views, making consensus among parties essential. However, this ability has been lost, which is detrimental to Germany, as it prevents fair and forward-thinking policies.

Looking back on those years of upheaval, it is clear that the transition from socialism to capitalism was far more complex and painful than many anticipated. For those of us who fought to save industries like EKO Stahl, the battle was as much emotional as it was economic. We were not just trying to save a company; we were fighting for the dignity and future of an entire region, of an entire country. Today’s discontent in the East underscores the need for economic decisions to consider human costs and for planning – both in government and business – to respect those affected.

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CONTRIBUTOR

Jenny Farrell

Dr. Jenny Farrell is a lecturer and writer in Galway, Ireland. Her main fields of interest are Irish and English poetry and the work of William Shakespeare. She is an associate editor of Culture Matters and also writes for Socialist Voice, the newspaper of the Communist Party of Ireland.

Karl Döring

Karl Döring (AKA Karl Doering) is a former public servant in the government of the German Democratic Republic. A metallurgist by training, he served in economic roles overseeing the steel industry. During the 1990 German reunification, he was the deputy chairman of the supervisory board of the Treuhandanstalt, the agency established to oversee the privatization of the public property belonging to the people of the GDR.