The Price of German Unity

Gerhard A. Ritter is well known for his pioneering work on the history of social welfare policy in Germany. In the book under review he describes the introduction of West German social welfare systems into the former German Democratic Republic (GDR), the contribution this made to the ultimate success of unification and the burdens which it put on the German economy as a whole. On 18 May 1990 a treaty was signed between the Federal Republic and the GDR for ‘the creation of a monetary, economic and social union’. This ‘State Treaty’ was the essential precursor to unification itself. So far as social policy was concerned, the East Germans agreed that the welfare and pension arrangements existing in West Germany should be introduced in the East. But there were difficulties caused by the radically different methods of dealing with pensions and other social benefits in the two countries. In West Germany they usually took the form of insurance policies based on contributions from employers and employees. In the GDR the state paid for a basic pension as well as a health system which, though poorly financed, provided free outpatients’ services and emphasised preventive medicine

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