122 RALF AHRENS AND ANDRÉ STEINER
for example, was fair to middling at best. In other sectors, such as agri-
culture or the steel industry, European policy had a tendency to preserve
existing structures and often aimed to cushion the detrimental impact
of the decline of older industrial regions on the social and labor mar-
kets.^72 Regardless of the diffi culty of measuring success, these industrial
policies demonstrate that Western Europe, including West Germany,
did not intend to jettison its long tradition of state intervention in eco-
nomic structures and business cycles. Despite such measures and other
processes of adjustment plagued by crises, the economy of the Federal
Republic was already deeply immersed in a new phase of international-
ization when it unexpectedly gained new industrial regions through Ger-
man reunifi cation.
In the fall of 1989, the GDR was still solvent. But, trouble was defi nitely
looming on the horizon: given its net debt in convertible currencies,
which amounted to 175 percent of the export revenue coming from trade
with Western industrialized countries, as well as the poor performance of
its exports on the markets that worsened even further in the 1980s, there
was hardly any perceivable way for the country to avoid falling into the
debt trap.^73 The ineffi cient division of labor within COMECON was one
factor behind this hopeless situation because the delayed industrializa-
tion of other bloc countries cost the GDR a substantial market share in
the Eastern export markets. Although East Germany offi cially attempted
to specialize in certain production lines on a bilateral level, which was re-
fl ected statistically in the rising share of corresponding products among
the country’s exports and imports, these goods did not meet Western stan-
dards of development and quality. Moreover, rising commodities prices on
the global market, especially for crude oil, put a strain on the foreign
exchange balance. As prices within the COMECON only adjusted to those
on the global market with a substantial delay, the GDR profi ted quite
considerably—despite accelerated adjustments beginning in 1975—from
relatively inexpensive Soviet oil exports until the mid-1980s. Most of this
oil was then processed and exported to the West, proving to be the most
important source of foreign currency for a while. But, the GDR’s real ex-
ports to the USSR almost had to be doubled to aff ord even this relatively
inexpensive crude oil.^74
In addition, after a brief interruption in the early 1970s, the GDR re-
instated its targeted policy to import Western capital goods; at the same
time, however, rising commodity prices strained the country’s foreign
currency balance even further. An assessment of East German foreign
trade according to the actual cost of exports and the actual proceeds from
the transfer of imports to the factories thus reveals a lasting shift in re-
gional structure. Consequently, as of 1980, the share of COMECON coun-