December 15, 2017
This article examines financial aid for companies and the guidelines of subsidy policy in East Germany after 1989 in the context of German structural policy in the “Helmut Kohl era” (1982-1998). It comes to the conclusion that – after a short period of fast structural change in East Germany – efforts increased to rescue existing businesses and industrial sites, as well as the jobs they provided after the end of 1992, primarily through the initiative of regional actors. Financial aid for companies – particularly for funding industrial investments in modernisation and new plants – played a key role in the rescuing and restructuring process. At the same time, structural policy gradually converged with the patterns that had been formed during the political management of structural change in the “former” Federal Republic. Only the short period of the postreunification years 1991 and 1992 was characterised by the steering of structural change and the redefinition of East German industry by the markets as well as by a renunciation of subsidies for the preservation of existing jobs. The temporary retreat of the state from structural policy was partly a result of the experience of the 1980s, when structural policy was criticized for slowing down German economic growth and impeding structural change.