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Lawmakers Take Action Against High Food Prices

July 6, 1990

EAST BERLIN (AP) _ East Germany gave communities control of former state-run grocery stores on Friday after consumers found eye-popping food prices in their first foray into the free market.

Stung by the soaring prices that followed the merger of the German economies on Sunday, Parliament passed a law to break up the state grocery chains that suddenly had become unregulated monopolies.

Meanwhile, 120,000 factory workers were striking for job protection and higher wages to compensate for rising prices, and farmers buffeted by Western competition threatened to spill unsold milk in the streets.

While East Germans coped with the first phase of German unification, experts from both states Friday held their first full talks on the final stage of creating a single nation.

The two nations are negotiating a treaty that will reconcile the differing laws of the countries and build a political framework for a united Germany.

Guenther Krause, East Germany’s top negotiator and the Parliament state secretary, said the two sides agreed on a timetable of meetings that will result in a final treaty by the end of August.

Krause said the treaty should mandate that Berlin is the capital of a united Germany. Bonn is now the West German capital and East Berlin is the East German capital.

However, West German Interior Minister Wolfgang Schaeuble told reporters the decision should be made by a newly elected Parliament of both nations.

Krause also said the exact date of all-German elections would be decided by the end of this month.

The political treaty would have to be ratified by both Parliaments. East Germany would then hold elections in October to create five state governments, to match the West German state government system.

Under one proposal, common German elections would be held in December and the two countries would formally merge a day later.

The political treaty would be the companion piece of the economic pact that went into effect on Sunday and formally combined the economies of the two German states.

Stores opened Monday filled with West German products, many of them priced as high or higher than those in wealthier West Germany.

Lawmakers in Parliament criticized stores for selling West German products and snubbing East German goods - and the government for allowing it to happen.

There have been reports of stores in small communities with no competition abusing their captive markets by charging high prices.

Parliament passed a law to break up the two huge grocery chains of the former socialist system, HO and Konsum, by allowing local governments to sell the stores in their towns to private buyers.

Under the former Communist system, all prices in state stores were set by the government.

Lawmaker Gerhard Schultz said the new rule should help stop the ″exorbitant prices and price dictating.″

Meanwhile, farmers in southern Leipzig said Friday they would dump 2,640 gallons of milk on the streets Monday to protest the loss of business, the East German news agency ADN said.

Workers nationwide have been staging daily ″warning strikes″ to demand higher wages and protection against widespread joblessness expected as East German enterprises confront Western competition.

The East German affiliate of the powerful West German metalworkers union, IG Metall, called more strikes Friday at factories in East Berlin, Frankfurt an der Oder, Cottbus, Potsdam, Hennigsdorf and Eberswalde.

More than 120,000 workers took part in one-hour rallies, said Detlef Kuchenbecker, spokesman for the West German union.

The strikes were held to coincide with negotiations between the metal union and 151 Berlin-area factories represented by a newly formed East German employers association.

IG Metall is seeking labor contracts similar to those it has in West Germany.

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