SENSATION: Treuhandanstalt – The SCANDAL that shook East Germany!

SENSATION: Treuhandanstalt – The SCANDAL that shook East Germany!

In a shocking look back at German history, today, July 15, 2025, we take a look at one of the most sensitive points of reunification: the founding of the Treuhandanstalt! Founded on March 1, 1990, this institution aims to liquidate and privatize the GDR's over 8,000 state-owned companies. What was intended as a rescue operation developed into a so-called “shock therapy” that plunged the East into unprecedented economic turbulence!

With the aim of promoting “efficiency” and “competitiveness”, the trust was initially filled with euphoric hopes. But it quickly became clear that this was nothing more than a huge tightrope act! Hundreds of companies closed and the once proud 4.1 million employees shrank to a shocking 1.24 million by April 1992! The entire nation was on the brink of economic collapse!

The liquidation of the GDR and its consequences

The Treuhandanstalt was not only a bureaucratic monster, but also a symbol of disappointment! Critics like Petra Köpping make it clear that mass privatization took away their companies and jobs from people in the East - for the benefit of West German investors! A full 80 percent of the privatized companies ended up in Western hands, and the discontent among the population grew immeasurably!

On April 1, 1991, Detlev Rohwedder, the president of the Treuhand, was tragically murdered! This shocking murder not only caused an economic shock, but catapulted the trust into the headlines - and rightly so! His successor, Birgit Breuel, tried to turn things around by accelerating the private sector program. But the problems were already enormous!

Scandals and social upheavals

The trust was repeatedly rocked by allegations of fraud and embezzlement. Investigations and committees of inquiry became routine as East Germans desperately fought for their future! The structural difficulties of the GDR economy were too great, even for the ambitious plans of the Treuhand. In the end, on December 31, 1994, the Treuhand was dissolved with a massive deficit of over 260 billion German marks! Its successor organization, the BvS, was supposed to monitor compliance with the privatization contracts, but the painful memories remained.

Privatization was a catastrophic undertaking and led to long-lasting social upheavals between East and West. In the culture of remembrance of this time, the Treuhand is now perceived as a “bad bank” - a powerful symbol of the disappointments after the fall of the Wall! Despite the hope of an economic recovery, the dreams ended in a deep crisis that shook the trust of many East Germans in democracy. A true lesson in the dangers of rash economic decisions that still resonate today!

The lessons from this drama are clear: Where money and power collide, chaos and disappointment are often not far away! What grand plans were once intended as a beacon of hope are now perceived by many as the “Achilles heel” of the unification process!

For further information on this dark chapter in German history, you can read the reports on Bietigheim newspaper, Wikipedia and bpb.de read up!