216 WINFRIED SÜß
quick and unproblematic introduction of the sociopolitical institutions
of the Federal Republic in the states of the former East helped to make
the transformation of a planned economy into a market economy more
bearable and therefore socially acceptable to the citizens in the new fed-
eral states. It aided in the reorganization of the circulation of money and
goods in eastern Germany, making it possible for companies to share the
burden of the costs related to the system transformation with the tax pay-
ers and the contributors to statutory social insurance schemes.^59
The main social problem during the transformation period was dealing
with mass unemployment. Just from 1990 to 1994, approximately three
million employees lost their jobs in the new federal states. Many of these
older individuals were forced to take early retirement, while the younger
people aff ected were directed toward the state-fi nanced “secondary job
market”; very few of the latter actually managed to fi nd their way back to
the regular “primary job market” in the long term. In order to soften the
blow of this economic transformation, the German government turned to
tried-and-true measures that had been used to overcome social problems
in the old Federal Republic. These policies had in fact already attracted a
great deal of criticism since the 1980s because they shifted state fi nancial
burdens onto the social security system, which increased labor costs.
The impact of reunifi cation on the sociopolitical institutional order was
therefore quite uneven. Although the residents of the new federal states
experienced a radical break in terms of the continuity of the welfare state,
the sociopolitical institutions of the Federal Republic proved to be elastic
enough to be able to deal with the special, historically unique situation
of German reunifi cation. Indeed, these institutions emerged from the fu-
sion of the two states in a relatively unaltered form, and in many respects
they were even strengthened by this period of transformation. On the
path to German unity, the welfare state once again proved its astounding
ability to adapt to changed circumstances and to absorb the impact of
social problems on a very large scale. At the same time, however, social
policy lost much of its autonomy, leaving behind the impression of an
“exhausted welfare state.”^60
The way in which social policy developments are assessed very much
depends on the time frame that is taken under consideration. Keynesian
policies dominated until 1994, and their overarching aim was to deal with
the social consequences of German reunifi cation. They were coupled,
however, with a massive increase in government debt, high wage costs,
and strongly diminishing economic performance. The social expenditure
ratio rose in the fi rst few years after reunifi cation in the new federal states
to over 55 percent, and the aggregate social security contribution rate
climbed by 7.6 percent, from 35.5 percent to 42.1 percent, between 1990