Erich Honecker took office in May 1971 as a moderniser. His first major policy initiative — the so-called "unity of economic and social policy" — was a deliberate change of direction from Ulbricht's emphasis on industrial accumulation. Under Honecker, the SED committed itself to delivering a measurable improvement in the everyday material life of East German citizens. This meant: more housing (the great Plattenbau prefab apartment programme, which built 1.9 million flats between 1971 and 1989), more consumer goods (longer-running car production, fashion, household appliances), more leisure (subsidised holiday camps at the Baltic coast and the Harz mountains), more food choice (the proliferation of Konsum stores with imported delicacies, however limited).
The strategy worked, after a fashion. By 1980 East Germany had achieved a standard of living that was, by any Eastern Bloc measure, the highest in the region. It had also overtaken some Western European countries on specific indicators — kindergarten provision, women's labour-force participation, basic medical care. It had, by 1976, become a fully diplomatically recognised state at the United Nations and in international sport. The basic political bargain Honecker offered the East German population was: accept the SED's monopoly on power, accept the wall, and in exchange we will give you a quiet, decent, materially adequate life with secure employment, free healthcare, free education, and a small annual holiday.
A large majority of East Germans, by the late 1970s, had accepted this bargain. Not because they liked the SED — opinion poll data later released suggested only about a quarter of the population identified as committed socialists — but because the alternative seemed, at the time, distant and unrealistic.
Ostpolitik and recognition
Honecker came to power at exactly the moment that the West German Chancellor Willy Brandt's Ostpolitik — the policy of opening to East Germany and the Eastern bloc — produced its first major treaty results. The 1970 Treaty of Moscow and the 1970 Treaty of Warsaw, both signed by Brandt, had committed West Germany to renouncing territorial claims east of the Oder-Neisse line and to recognising East Germany as a real, if not legally sovereign, state. The Basic Treaty between the two German states, signed in December 1972, established formal diplomatic relations. Both German states were admitted to the United Nations in September 1973.
The international consequences were substantial. The Federal Republic, after 1972, established diplomatic relations with most of Eastern Europe. The GDR, after 1973, was recognised by virtually every country in the world (the exceptions being Israel, South Africa, and a few small Asian countries). Honecker conducted state visits to Belgium, France, and finally — in 1987 — to West Germany itself, where Helmut Kohl received him at the federal chancellery as a head of state. The visit was the symbolic apex of East German international status. The country had become, in international law and protocol, a full member of the system of nation-states.
"The German question is not on the agenda." — Erich Honecker, statement at his state visit to Bonn, 7 September 1987
The Helsinki effect
The Helsinki Final Act, signed in 1975 by 35 states including the GDR, contained a "Third Basket" of provisions concerning human rights, freedom of movement, and freedom of information. The Eastern Bloc states had signed primarily for the Helsinki guarantee of post-war frontiers (which they desired), and they considered the human-rights commitments either rhetorical or amenable to creative interpretation. They were wrong on both counts.
The Helsinki accords gave Eastern European dissidents — Czech Charter 77, Polish KOR and later Solidarity, East German peace and church activists — an internationally legitimate framework for their criticisms of their own governments. East German would-be emigrants began to file formal applications to leave the country, citing Helsinki provisions on family reunification. The number of applications grew steadily: 70,000 in 1976; 230,000 by 1988. The country was constructing, in plain view, a substantial population that had publicly declared itself disloyal.
The intershop economy
The most visible feature of everyday Honecker-era life — and the most ideologically uncomfortable — was the parallel economy of the Intershops. These were state-run retail outlets that sold Western consumer goods (jeans, electronics, cigarettes, coffee, perfume, chocolate) in exchange for hard currency, particularly West German marks. The shops were used principally by the small minority of East Germans who received West German remittances from relatives, and by foreign visitors. They were also used by SED officials, who acquired hard currency through their state functions.
The Intershops were a humiliation. They demonstrated, on every shopping street in central Berlin, Leipzig, and Dresden, that the East German mark could not buy what the West German mark could. They created a two-tier consumer society within a notionally egalitarian state. By the 1980s the Intershop system was generating around 5% of the GDR's hard-currency earnings and supplying around 25% of the country's most desirable consumer goods. The Honecker regime defended the shops, in private, as a necessary safety valve. The population resented them publicly.
The accumulating debt
The hidden problem of the Honecker years was financial. The country's emphasis on consumer-goods spending had, by the late 1970s, opened a yawning trade deficit with the West. East Germany imported more than it exported: machinery, technology licences, foodstuffs, Western consumer goods for the Intershops. The country borrowed extensively from West German banks (with West German government guarantees, as a matter of Ostpolitik) and from international markets. By 1989 the GDR's gross foreign debt to the West stood at around 41 billion West German marks.
The debt service alone, by the mid-1980s, was eating up a significant fraction of the country's hard-currency earnings. Honecker's economic adviser Gerhard Schürer prepared a confidential memorandum in 1988 warning the Politburo that the country was effectively insolvent and that maintaining the existing standard of living required ever-increasing Western loans. The memorandum was suppressed. Its conclusions would, within a year, be confirmed by events.
Everyday life
The next chapter takes up the experience of being an East German citizen in the Honecker era — what work was like, what shopping was like, what holidays were like, what television was like. The political account of the period would be incomplete without it.
End of Chapter IV