between the Federal Republic and the German
Democratic Republic (December 1972) and
finally a Czech–German treaty (December 1973)
completed the clutch of Eastern treaties.
Visiting the German Democratic Republic in
March 1970, Brandt laid the foundations for a
new businesslike relationship. The Berlin Wall,
constructed in 1961, had stemmed the haemor-
rhage of population loss from East Germany and
in this negative way had created a basis of forced
stability for nearly thirty years. But the masters of
the German Democratic Republic were alarmed
at Brandt’s popularity. Even after the treaty was
signed, inter-German relations were far from
normal. The viability of the East German state
rested on Soviet support, specifically on the
Soviet veto of union with the West German
state. Brezhnev had, nevertheless, responded to
Brandt’s overtures and forced the East German
party boss Ulbricht to reach agreements. Western
recognition of the Eastern settlements was worth
a great deal to the USSR in stabilising its hold
over the East. The boost given to inter-German
trade, in addition, supported the ailing Eastern
economies; Brandt’s Eastern policy also brought
international recognition and benefits for the
Federal Republic, chief among which was the
recognition by the Soviet Union of the perma-
nence of the ties between the Federal Republic
and West Berlin. Moreover, movement between
the two Germanies was eased.
Brandt had thus extricated his country from
the increasingly damaging Hallstein Doctrine
whereby the Federal Republic had cut off rela-
tions with any state that recognised the German
Democratic Republic (except for the Soviet
Union). This had increasingly narrowed West
Germany’s room for manoeuvre; now the way
was open again for renewed trade and cultural
relations with Eastern and central Europe. By
taking the initiative, the Federal Republic was
showing the world that it was no longer content
with its inferior status, an ‘economic giant but a
political dwarf’.
Willy Brandt and his FDP partner Walter
Scheel also proclaimed a new era at home. Far-
reaching reforms were promised which would
deepen the attachment of every citizen to the
democratic order. The perception of government
by a remote elite, leaving the electorate either
acquiescent or in open rebellion, was to be radi-
cally changed. The youth rebellion burnt itself
out; under Brandt’s guidance, the SDP became
more tolerant of its young socialists. He also
hoped to provide an umbrella under which views
from left to right could all shelter, though more
often than not left and right fought each other
within the party. That was to remain the SPD’s
abiding problem, the price paid for the wide elec-
toral support necessary to establish itself as the
senior party of government.
The Brandt government fell short of fulfilling
its high aims at home. Between 1969 and 1975,
the business cycle had turned downwards and the
annual growth of the German economy fell from
8 to 1 per cent, a fall that was particularly steep
after the huge rise in oil prices in 1973–4. The
‘economic miracle’ appeared to be over; the West
Germans could not escape the depression of the
1970s.
Brandt’s successor was Helmut Schmidt, the
most able SPD chancellor of the post-war years.
Practical, energetic and decisive in leadership, he
provided a vivid contrast to the idealistic and
emotional Brandt. But he did not suffer fools
gladly and he made many enemies, especially
among ideologues. His principle was to find prag-
matic solutions to existing problems and to get
things done. He inherited the downturn of the
economy and the consequences of the oil shock- severe depression followed in 1974–5. The
Schmidt government managed to keep inflation
below 6 per cent. To Germans inflation was akin
to original sin. But government measures to
encourage efficiency and competitiveness to
maintain full employment were only partially suc-
cessful; even so, unemployment was kept down to
between 4 and 5 per cent. Falling economic
growth did not permit grandiose social-reform
schemes to be realised, but budgetary cuts and
financial rectitude kept the German economy in
much better shape than that of its neighbours.
Schmidt, a ‘European’, recognised the interde-
pendence of the Western world and worked in
close collaboration with the French president
Valéry Giscard d’Estaing.