Related topics

East Germany Wants to Limit Foreigner Investment

April 30, 1990

EAST BERLIN (AP) _ East Germany wants to limit foreign ownership of its state industries and sell half interest in the factories to its citizens, an official was quoted as saying today.

Delegations from both Germanys began meeting in Bonn today to discuss merging the economies and social institutions of the nations. The union is to be completed by July 2.

Among East German demands is a proposal that East Germans retain at least half ownership in the 8,000 enterpises that now are state-owned, an East German official was quoted as saying.

Peter Moreth, the East German trustee for public property, said in an interview with the West German newspaper Die Welt that the government wants East Germans to be able to buy investment certificates in each nationalized industry.

He said the certificates would be redeemable after three years. East German companies would also be able to sell ownership shares to employees, he said. Foreign ownership in each enterprise would be limited to 50 percent and go to the highest bidder.

He estimated the value of East German industries after the economic merger at $178 billion.

Some East Germans fear that West German and foreign interests will completely take over the East German economy once it is converted to a free market.

There was no immediate reaction from West Germany, which wants the ailing East German economy to convert to a free market. Many factories are obsolete and likely to close after an economic merger.

East German Prime Minister Lothar de Maiziere and the government of West German Chancellor Helmut Kohl have sharp differences over how to distribute the financial burden of German unification.

East Germany wants to maintain some subsidies and protections for workers as the nation shifts from socialism.

West Germany has said it will trade most East German marks for West German marks at a 1-1 exchange, but wants to trade personal savings accounts of more than $2,300 at a 2-1 rate. East Germany is demanding a higher ceiling.

West German officials during the weekend, in speeches and interviews, said East Germany should not press for more financial concessions that could lead to higher West German taxes and erode the power of the West German mark.

Kohl indirectly chided East Germany, implying it was seeking to achieve prosperity through negotiations, rather than hard work.

″We must also say that the prosperity in West Germany did not fall from heaven, but came from work,″ he said Sunday in a speech in Saarbruecken, West Germany.

In addition to the economic differences, wide disagreement exists over the role of a united Germany in the superpower alliances.

De Maiziere met in Moscow on Sunday with Soviet President Mikhail S. Gorbachev, but the two failed to settle disagreements over whether a united Germany could be part of the NATO alliance.

On May 5, foreign ministers from the Soviet Union, United States, Britain and France will meet in Bonn to discuss the international implications of German unification.

West Germany and the United States want a united Germany in NATO; the Soviets insist on dual membership in NATO and the Warsaw Pact; and East Germany says temporary NATO membership is possible if the alliance changes its military philosophy.

East Germany now is in the Warsaw Pact and West Germany is in NATO.

Update hourly