ECONOMIC CRISES, STRUCTURAL CHANGE 119
the GDR. After the East German industries had already lost the ability to
compete in Western markets as a result of the lack of effi ciency within the
centrally planned economy as of the 1950s and the reforms of the 1960s
had not been able to fundamentally reverse this trend, the GDR acquired
a growing debt in Western currencies. Consequently, the GDR was struc-
turally dependent on its “class enemy” as it entered into a phase of crisis
in the 1970s and 1980s.^60
Up to this point, the economic alignment of the FRG with the West had,
by and large, proven to be a success story. Reconstruction after the war
and the “economic miracle” were marked by two basic trends in foreign
trade policy: the liberalization of the foreign trade system and the corre-
sponding integration into the global economy as well as the incorporation
of the country in the European Coal and Steel Community (ECSC) and the
European Economic Community (EEC). Initially, the step-by-step transfer
of West German exports and imports out of the hands of the Allies, and
the facilitation of inter-European trade through the establishment of a
multilateral clearing system and the reduction of volume-based import
restrictions within the framework of the Organization for European Eco-
nomic Cooperation (OEEC) pushed forward by the American occupation
authorities, were largely responsible for bringing the West German in-
dustries back to the global market. Bilateral liberalization treaties allowed
for a noticeable increase in the exchange of goods with Western and
Northern European neighbors as of 1949 by dismantling quotas. Like-
wise, the integration of the FRG in the General Agreement on Tariff s and
Trade (GATT) in 1951 boosted German exports, placing pressure on the
domestic industries to compete with other countries. Simultaneously, the
integration of the D-Mark in the European Payments Union (EPU) and the
transition to currency convertibility in 1958, as well as the liberalization
of capital trade, spurred growth in West German foreign trade from the
monetary side.^61
The economic potential attached to the FRG’s integration in Western
Europe has been quite apparent since the 1960s, if measured on the ba-
sis of trade fl ows. While West Germany in particular profi ted from the
trade-generating eff ects of the customs union, the overall share of West-
ern Europe in global trade also increased signifi cantly.^62 As early as 1960,
trade with the other fi ve member countries accounted for almost 30 per-
cent of West German foreign trade; this fi gure jumped to 46.7 percent
(exports) and 39.9 percent (imports) by the time the union expanded in
- Trade with East European countries (not including the GDR), on the
other hand, hovered around 4 percent. Before the war, however, about
15 percent of the exports from the territory that later became the FRG
went to eastern and southeastern Europe. In terms of the breakdown of