On November 9, 2009, German chancellor Angela Merkel (1954– ) marked the 20th anniversary of the fall of the Berlin Wall along with the leaders of Russia, France, and Britain. Merkel, Germany’s fi rst female chancellor, was raised in the former East Germany and as a young prodemocracy activist had played an active role in the commu-nist dictatorship’s demise. She led the assembled world leaders, includ-ing U.S.

Secretary of State Hillary Clinton, through the Brandenburg Gate before delivering a historic address. Speaking before tens of thou-sands of spectators in a rainy Berlin, Chancellor Merkel commemorated the victims who died trying to escape communist tyranny.

She also joined the other world leaders in celebrating the memory of German reunifi cation and the end of the cold war. However, her speech also demonstrated Germany’s growing prominence on the world stage in the 21st century.

Asserting Germany’s determination to help tackle the daunting problems facing the contemporary world, including global poverty and climate change, Merkel used the fall of the Berlin Wall as a metaphor of the power of hope and collective action. Speaking to the gathering, the German chancellor reminded the assembled crowd that the same determination that brought down the Berlin Wall could serve as a source of strength in the 21st century.

In a speech before the U.S. Congress a week before, Merkel had made a similar point, urging her audience that the world needs to demonstrate that it can meet the challenges of the 21st century and that it can tear down these “walls” as surely as the Berlin Wall was dismantled 20 years before. After fi reworks and a festive concert, Angela Merkel returned to the checkpoint she had used two decades before to cross over into the west.

Having escaped the oppression of her childhood, Merkel has risen against the odds to become the leader of the Federal Republic, a democratic nation that is a leader within the European Union and a prominent member of NATO and the G8, an infl uential forum of the world’s eight most industrialized democracies. With her nation, Chancellor Merkel now faces the challenges and uncertainties of the 21st century.

Building a New Germany

On December 1, 1990, national elections determined the composition of the new German Bundestag. Helmut Kohl’s coalition, the conserva-tive alliance of the CDU/CSU, won 319 of the 662 seats, giving it a clear majority in coalition with the moderates of the FDP, which won 79 seats. The SPD failed to gain many new seats in the former East Germany and claimed just 239 seats.

East Germany’s former ruling party, the SED, which had changed its name to the Party of Democratic Socialism in 1989, also ran in the election. However, hampered by widespread outrage at the activities of the former regime’s security ser-vice, it won just eight seats.Among the fi rst controversies in the newly reunited Germany was where its capital should be located.

While Berlin had been designated the Federal Republic’s capital, and huge sums of money had been budgeted for the construction of state buildings, many former West Germans proved reluctant to abandon their former capital at Bonn. After a contentious debate in the Bundestag in June 1991, the del-egates voted to locate Germany’s capital in Berlin, a city whose history refl ected the legacy of both of the former German states.

The controversy surrounding the symbolic choice of Germany’s new capital proved trivial compared with the massive problems associated with integrating the former East Germany into the Federal Republic’s capitalist economic system. The two German states had signed an eco-nomic treaty on July 1, 1990, prior to unifi cation, one that consolidated their economies and established the deutsche mark as the sole currency.

However, bringing the dilapidated East German economy up to the production and profi tability levels of the former West Germany proved a daunting task. Factories and transport networks in the former East Germany had fallen into disrepair, and the state-owned industries, crip-pled by debt and hampered by ineffective management, proved unable to compete with Western companies.

Meanwhile, German workers in the east were unused to the rough-and-tumble competition of the capi-talist system, having been raised in a society that promised universal employment and extensive social welfare entitlements. Recognizing the enormous gulf between the economic capacity of the former East Germany and West Germany, the Kohl government scrambled to revi-talize the ineffi cient state industries of the East.

Kohl formed the Trust Agency (Treuhandanstalt) and charged it with privatizing some 8,500 state-owned industrial concerns and agricultural holdings in the for-mer East Germany, huge enterprises that had more than 4 million total employees. In restructuring, closing, and dismantling these failing, debt-ridden concerns, the German government found few enthusiastic buyers and soon wracked up an enormous debt. By 1994, when its activities ceased, it had borrowed almost 270 billion deutsche marks to fi nance its operations.

Worse yet, the activities of the Trust Agency caused more than 2 million workers in the former East Germany to be laid off in the early 1990s, more than half of the total workforce of the former state-owned industries, sparking mass protests in Berlin and other German cities. The controversy turned deadly in April 1991 when the Trust Agency’s director, Detlev Rohwedder (1932–91), was assassi-nated by terrorists, perhaps affi liated with the Red Army Faction.

The former East Germany’s state-run industries were not the only expensive problem facing the newly unifi ed Germany. The east’s trans-portation and communication networks also required costly modern-ization. The federal government poured more than 800 billion deutsche marks into the former East Germany during the 1990s to upgrade its obsolete transportation systems, communication infrastructure, and energy networks, to fund unemployment payments and vocational training for laid-off workers, and to fi nance costly environmental cleanup projects.

Despite the massive infusion of money into the former GDR, many of its former citizens seethed with resentment as candidates from the west claimed top positions in government, business, and education. Educated in a capitalist system and untainted by any past association with the GDR’s repressive communist regime, immigrants from west-ern Germany seemed to be getting the best jobs as the ranks of the jobless swelled in the east.

For many former citizens of the GDR, the reality of unifi cation, expressed in economic uncertainty and lost social security benefi ts, failed to live up to their expectations. In the decade after the fall of the Berlin Wall, older East Germans pined for the security afforded by the old socialist state.

As anger mounted in eastern Germany, the Kohl government organized a series of talks that led to the 1992 Solidarity Pact. This agreement provided for nationwide tax hikes to help fund the rejuvenation of eastern Germany without continuing to rely on uncontrolled defi cit spending that might trigger runaway infl ation.Dealing with the excesses of the former East German communist regime also proved divisive in the aftermath of German reunifi cation.

The most pressing issue concerned the activities of the Ministry of State Security, known as the Stasi. The Stasi, the SED’s secret police, monitored the activities of East German citizens, using wiretaps and thousands of paid informants to compile damaging fi les on enemies of the state, real and imagined. The Kohl government formed a commis-sion in the fall of 1990 to review the millions of secret fi les amassed by the Stasi and to prosecute the ministry’s former agents.

By January 1992, the government commission agreed to give former East German citizens access to their Stasi fi les, unleashing a torrent of anger and dismay at their contents. The legacy of surveillance and suppression revealed by the opening of the Stasi fi les rent eastern Germany, pitting victims of communist repression against former Stasi operatives as well as neighbors, coworkers, and family members who collaborated with the regime.

As controversy over the GDR’s past swirled, the Federal Republic’s judiciary also prosecuted leading SED fi gures for atrocities commit-ted under their authority. Thus, the former director of the Stasi Erich Mielke faced charges in 1993. Mielke’s political career had begun in the 1930s, when he fought for the KPD in street battles against the Nazis. After orchestrating the murder of a pair of Berlin police offi cers who had broken up KPD meetings, Mielke fl ed to the Soviet Union and was tried in absentia for the killings.

He spent World War II as a politi-cal offi cer in the Red Army and returned to Germany after the war to head the GDR’s secret police, coordinating the nefarious activities of the Stasi. In December 1989, as the SED regime crumbled, the reviled Stasi head was expelled from the party and arrested by GDR authorities.

After unifi cation, in October 1990, Mielke was arrested and tried by the federal court for the 1931 murders of the two Berlin police offi cers. Found guilty in 1993, he was sentenced to six years’ imprisonment but released after just two years, owing to his poor health.

A broken man, he died in a Berlin nursing home in obscurity in 2000.Mielke’s former boss, the East German dictator Erich Honecker also faced charges in the wake of reunifi cation. In the face of massive dem-onstrations in October 1989, an aging Honecker had been ousted as SED leader. A year later, when the GDR was dissolved, Honecker and his family took refuge in a Soviet military hospital outside Berlin before fl eeing to the USSR to avoid arrest for his regime’s atrocities.

After the collapse of the communist regime in Russia in December 1991, Honecker was extradited to Germany to answer for his crimes. By the time he was brought to trial, however, in 1993, he was so ill that the court released him. After this controversial decision, Honecker sought refuge in Chile, dying there a year later of liver cancer.