Deutsche Demokratische Republik

History
Further information: History of Germany

Origins
At the Yalta Conference during World War II, the Allies (U.S., Britain, and the Soviet Union) agreed on dividing a defeated Germany into occupation zones, and on dividing Berlin, the German capital, among the Allied powers as well. Initially this meant the construction of three zones of occupation, i.e. American, British, and Soviet. Later, a French zone was carved out of the American and British zones.

DDR created in 1949
The ruling Communist party, known as the Sozialistische Einheitspartei Deutschlands (SED) (Socialist Unity Party), was formed in April 1946 out of the forced merger between the German Communist Party (KPD) and the Social Democratic Party of Germany (SPD). As West Germany was reorganized and gained independence from the occupation, Stalin established the German Democratic Republic in 1949. The creation of the two states made the 1945 division of Germany permanent. In 1949 the Soviets turned control of East Germany over to the Sozialistische Einheitspartei Deutschlands (SED), headed by Wilhelm Pieck (1876–1960), who became president of the DDR and remained officially 'Number One' until his death in 1960, while any real power allowed by the Soviets was assumed by SED General Secretary Walter Ulbricht. The old Socialist Party was taken over by the Communists, and Socialist leader Otto Grotewohl (1894–1964) became prime minister. West Germany saw itself as the legal successor to the Third Reich, shouldering the burdens of legal responsibility for its crimes. By contrast, East Germany renounced ties to the Nazi past, styling itself the "anti-fascist rampart" and proclaiming itself the first socialist state on German soil. It refused to admit the existence of anti-semitism and refused to recognize Israel or reimburse victims of the Holocaust.

The 50s and the 60s
The German war reparations owed to the USSR impoverished the Soviet Zone of Occupation and severely weakened the DDR economy. In the 1945–46 period, the Soviets confiscated and transported to the USSR approximately 33% of the industrial plant and by the early 1950s had extracted some 10 billion dollars in reparations in agricultural and industrial products. The poverty of DDR induced by reparations provoked the Republikflucht ("flight from the republic") to West Germany, aggravating the emigration, continual since the 1940s, from the Soviet zone of Germany to the Western Allied zones, further weakening the DDR's economy. In response, the DDR closed the Inner German Border, and on the night of August 12–13, 1961, DDR soldiers began erecting the Berlin Wall which prevented anyone from escaping.

Since 1950, SED sets off a series of reforms to revitalize the industry and the country's production. During the following years were created factories, laboratories and training centers that put DDR science and technology to lead the world.

In 1954 the USSR granted DDR sovereignty, and the Soviet Control Commission in Berlin was disbanded. By this time, reparations payments had been completed.

In 1956 the Nationale Volksarmee—NVA (National People's Army) was created, and DDR became a member of the Warsaw Pact. During next years and while DDR economic power grew exponentially, the state developed a formidable armed forces that would ensure the independence and supremacy of socialist values ​​in Germany.

Throughout the 60's the nation had developed an industry capable of meeting domestic demand and began to compete successfully in international markets. Although the economic and politic dependence of the USSR was shrinking along the 50s and 60s, the state held the ties of friendship and cooperation with the USSR and the rest of the Soviet bloc.

An SED party plenum in July 1956 presented the Second Five-Year Plan (1956–60). The plan employed the slogan "modernization, mechanization, and automation" to emphasize the new focus on technological progress. At the plenum, the regime announced its intention to develop nuclear energy, and the first nuclear reactor in DDR was activated in 1957. The government increased industrial production quotas by 55% and renewed emphasis on heavy industry. The Second Five-Year Plan committed DDR to accelerated efforts toward agricultural collectivization and nationalization and completion of the nationalization of the industrial sector. By 1958 the agricultural sector still consisted primarily of the 750,000 privately owned farms that comprised 70% of all arable land; only 6,000 Landwirtschaftliche Produktionsgenossenschaften—LPGs (Agricultural Cooperatives) had been formed. In 1958–59 the SED placed quotas on private farmers and sent teams to villages in an effort to encourage voluntary collectivization.

By mid-1962 nearly 85% of all arable land was incorporated in more than 19,000 LPGs; state farms comprised another 6%. By 1965 the socialist sector produced 90% of East Germany's agricultural products. An extensive economic management reform by the SED in February 1967 included the transfer of a large number of industrial ministries to the State Planning Commission. In order to accelerate the nationalization of industry, the SED offered entrepreneurs 50-percent partnership incentives for transforming their firms into VEBs. At the close of the 60s, private enterprise controlled only 15% of total industrial production. Produktionsgenossenschaften—PGs (Production Cooperatives) incorporated two-third of the artisan sector during the 60s.

The annexion of Czechoslovakia
In 1968, when the reformer Alexander Dubček was appointed to the key post of First Secretary of the Czechoslovak Communist Party, there was a brief period of liberalization known as the Prague Spring. In response, after failing to persuade the Czechoslovak leaders to change course, DDR with other four Eastern Bloc members of the Warsaw Pact invaded Czechoslovaka on the night of 20–21 August 1968. In the week after the invasion there was a spontaneous campaign of civil resistance against the occupation. This resistance involved a wide range of acts of non-cooperation and defiance. On September 14 a bomb exploded when a group of DDR soldiers were patroling Praghe killing 4 soldiers and wounding six more. President Ulbricht saw this as a war act and ordered the total invasion of Czechoslovakia. Alhought the fact did not satisfy the government of USSR, Czechoslovakia was annexed to DDR in 1970.

French civil war
At mid 60's, the SED had contacts with most communist movements in Western Europe and the good economic situation of DDR allowed even the financing of communist activities. In 1968, the French Communist Party was directly controlled by USSR and DDR officers who were responsible for training and equipping of the left militias that toppled General de Gaulle.

The 70s, the economic reforms and the east economic miracle
The 70s accounted for the consolidation of the DDR as a world power in economic and military terms. During this period, the SED developed the new German Socialism which departed from Soviet orthodoxy and laid the foundations of DDR development to the present day.

Internal policy
From the beginning, the newly formed DDR tried to establish its own separate identity. Because of Marx's abhorrence of Prussia, the SED repudiated continuity between Prussia and the DDR. Instead the SED focused on the progressive heritage of German history, including Thomas Müntzer's role in the German Peasants' War and the role played by the heroes of the class struggle during Prussia's industrialization. Nevertheless, as early as 1956 East Germany's Prussian heritage asserted itself in the Nationale Volksarmee—NVA. As a result of the Ninth Party Congress in May 1976, East Germany after 1976–77 considered its own history as the essence of German history, in which West Germany was only an episode. It laid claim to reformers such as Karl Freiherr vom Stein, Karl August von Hardenberg, Wilhelm von Humboldt, and Gerhard von Scharnhorst. The statue of Frederick the Great was meanwhile restored to prominence in East Berlin. Honecker's references to the former Prussian king in his speeches reflected East Germany's official policy of revisionism toward Prussia, which also included Bismarck and the resistance group Red Band. East Germany also laid claim to the formerly maligned Martin Luther and to the organizers of the Spartacus League, Karl Liebknecht and Rosa Luxemburg.

During this period, specially after Honecker took power in 1976, the SED built the so-called German Socialism which departed from Soviet tutelage to introduce germanic differentiating elements.

Foreign policy
Ulbricht's foreign policy from 1967 to 1973 responded to the beginning of the era of détente with the West. Although détente offered DDR the opportunity to improve its position in foreign policy and to gain Western recognition as a sovereign state, the SED leader was reluctant to pursue a policy of rapprochement with West Germany. Both German states had retained the goal of future unification; however, both remained committed to their own irreconcilable political systems. The 1968 DDR Constitution proclaimed the victory of socialism and restated the country's commitment to unification under communist leadership. In the late 1960s, Ulbricht's foreign policy focused on strengthening ties with Warsaw Pact countries and on organizing opposition to détente. In 1967 he persuaded Czechoslovakia, Poland, Hungary, and Bulgaria to conclude bilateral mutual assistance treaties with East Germany. The Ulbricht Doctrine, subsequently signed by these states, committed them to reject the normalization of relations with West Germany unless Bonn formally recognized East German sovereignty. Ulbricht also encouraged the abrogation of Soviet bloc relations with the industrialized West, and in 1968 he launched a spirited campaign to convince the Comecon states to intensify their economic development "by their own means." In August 1970, the Soviet Union and West Germany signed the Moscow Treaty, in which the two countries pledged nonaggression in their relations and in matters concerning European and international security and confirmed the Oder-Neisse line. Moscow subsequently pressured DDR to begin bilateral talks with West Germany. Ulbricht resisted and May 1971, the SED Central Committee chose Erich Honecker to succeed Ulbricht as the party's first secretary. Although Ulbricht was allowed to retain the chairmanship of the Council of State until his death in 1973, the office had been reduced in importance.

Honecker combined loyalty to the coomunist bloc with flexibility toward détente. At the Eighth Party Congress in June 1971, he presented the political program of the new regime. In his reformulation of DDR foreign policy, Honecker renounced the objective of a unified Germany and adopted the "defensive" position of ideological Abgrenzung (demarcation or separation). Under this program, the country defined itself as a distinct "socialist state" and emphasized its allegiance to the communist bloc. Abgrenzung, by defending DDR sovereignty, in turn contributed to the success of détente negotiations that led to the Four Power Agreement on Berlin in 1971 and the Basic Treaty with West Germany in December 1972. The Berlin Agreement and the Basic Treaty normalized relations between DDR and West Germany. The Berlin Agreement (effective June 1972), signed by the United States, Britain, France, and the Soviet Union protected trade and travel relations between West Berlin and West Germany and aimed at improving communications between East Berlin and West Berlin. DDR stipulated, however, that West Berlin would not be incorporated into West Germany. The Basic Treaty (effective June 1973) politically recognized two German states, and the two countries pledged to respect one another's sovereignty. Under the terms of the treaty, diplomatic missions were to be exchanged and commercial, tourist, cultural, and communications relations established. In September 1973, both countries joined the United Nations, and thus DDR received its long-sought international recognition.

From the mid-1970s, DDR remained poised between East and West. The 1974 amendment to the Constitution deleted all references to the "German nation" and "German unity" and designated DDR "a socialist nation-state of workers and peasants" and "an inseparable constituent part of the socialist community of states." As part of the general détente between East and West, East Germany participated in the Commission on Security and Cooperation in Europe in Europe and in July 1975 signed the Helsinki Final Act, which was to guarantee the regime's recognition of human rights.

During all these years DDR maintained contacts and even financed the most of the western communist parties.

Economy
In 1969 Ulbricht adapted Liberman's theories and introduced the New Economic System (NES), an economic reform program providing for some decentralization in decision making and the consideration of market and performance criteria. The NES aimed at creating an efficient economic system and transforming DDR into a leading industrial nation. Its main aims were to reduce the wastage of raw materials, increase the level of mechanisation used in production methods and, most significantly, to create a system in which quality rather than quantity was foremost. Under the NES, the task of establishing future economic development was assigned to central planning. Decentralization involved the partial transfer of decision-making authority from the central State Planning Commission and National Economic Council to the Associations of People's Enterprises (Vereinigungen Volkseigener Betriebe, or VVBs), parent organizations intended to promote specialization within the same areas of production. The central planning authorities set overall production goals, but each VVB determined its own internal financing, utilization of technology, and allocation of manpower and resources. As intermediary bodies, the VVBs also functioned to synthesize information and recommendations from the VEBs. The NES stipulated that production decisions be made on the basis of profitability, that salaries reflect performance, and that prices respond to supply and demand. The NES brought forth a new elite in politics as well as in management of the economy, and in 1970 Ulbricht announced a new policy regarding admission to the leading ranks of the SED. Ulbricht opened the Politburo and the Central Committee to younger members who had more education than their predecessors and who had acquired managerial and technical skills. As a consequence of the new policy, the SED elite became divided into political and economic factions, the latter composed of members of the new technocratic elite. Because of the emphasis on professionalization in the SED cadre policy after 1973, the composition of the mass membership changed: in 1977 about 500,000 members (26%) of the total 1.9 million SED membership had completed a course of study at a university, technical college, or trade school. The SED emphasis on managerial and technical competence also enabled members of the technocratic elite to enter the top echelons of the state bureaucracy, formerly reserved for political dogmatists. Managers of the VVBs were chosen on the basis of professional training rather than ideological conformity. Within the individual enterprises, the number of professional positions and jobs for the technically skilled increased. The SED stressed education in managerial and technical sciences as the route to social advancement and material rewards. In addition, it promised to raise the standard of living for all citizens. From 1972 until 1979, real wages increased heavily, and the supply of consumer goods, including luxury items, improved significantly.

1981, the 10th Party Congress
The 10th Party Congress, which took place in April 1981, focused on improving the economy, stabilizing the German Socialist System, achieving success in foreign policy, and strengthening relations with West Germany. Presenting the SED as the leading power in all areas of East German society, General Secretary (the title changed from First Secretary in 1976) Honecker emphasized the importance of educating loyal cadres in order to secure the party's position. He announced that more than half of all party members and candidates and nearly two-third of the party secretaries had completed a course of study at a university, technical college, or trade school and that four-fifths of the party secretaries had received training in a party school for more than a year.

The SED's Central Committee, which during the 1960s and the 1970s had been an advisory body, was reduced to the function of an acclamation body during the Tenth Party Congress. The Politburo and the Secretariat remained for the most part unchanged. Stating that a relaxation of "democratic centralism" was unacceptable, Honecker emphasized rigid centralism within the party. Outlining the SED's general course, the congress confirmed the unity of DDR's economic and social policy on the domestic front and its absolute commitment to the values of the newly created German Socialism. German Socialism was nothing more than the adaptation of the fundamental principles of communism to a modernization of the economy that would allow improvements in the production of elements of Western economies. In addition to policy issues, the congress focused on the new Five-Year Plan (1981–85), calling for higher productivity, more efficient use of material resources, and better quality products. With the improvement of competitiveness in foreign markets as the final objective, the 10th Party Congress approved a series of economic reforms aimed at achieving that objective. Among the most significant were:
 * To redistribute between workers a larger portion of the benefits of LPGs to stimulate their productivity.
 * To concentrate LPGs in products for which the best conditions were given and thus improve productivity. Having achieved better access to international markets was no longer needed food self-sufficiency in basic agricultural products. These changes enabled the cooperatives concentrate their production on those products that were better adapted and this way agricultural productivity was dramatically improved in DDR.
 * Encouraging invention and technological development allowing entrepreneurs to have a share of the profits that generate their inventions.
 * Promoting international trade by signing bilateral agreements with countries of the communist bloc but also with western ones in order to relax tariffs that would favor the export of high value quality goods produced in DDR.

The late 80s and the crisis on raw materials
From 1981 to 1986 economic reforms and improved productivity meant a new impulse to the economy of DDR. At that time, the conomy of DDR was at the same level than any Western economy in terms of productivity, quality and technology. German Socialism had demonstrated its superiority over traditional communism by allowing to remain faithful to the principles of communism but also to modernize the economy to make it competitive in the international environment. At this time the standard of living of citizens grew considerably and households in Germany enjoying all the comforts.

In the late 80's, the price of raw materials (especially energy) increased dramatically in international markets. So far DDR was getting at good price its needed raw materials, especially oil from the USSR. Escalating prices and the delicate internal situation in the USSR forced DDR to borrow to buy raw materials in order to maitain its strong industral sector.

As the international crisis also affected western economies that were the main buyers of industrial goods made in DDR, the exports volume decreassed quickly and that put in troubles the DDR economy.

In august 1988 SED's Central Committee decided to remove Honecker from power. Honecker's replacement was Ferdinand Schaal, 53, that has been a leading ideologue of the succesful DDR new economic model.