After the Berlin Wall fell, West German entrepreneurs who went East were compared to "carpetbaggers," the Northerners who went South after the U.S. Civil War to take advantage of unsettled conditions

November 8, 1999
Web posted at: 2:30 p.m. EST (1930 GMT)

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From Berlin Bureau Chief Chris Burns

BERLIN (CNN) -- Ten years after the fall of the Berlin Wall, the former East Germany still struggles to rebuild its economy, left in hopeless disrepair after four decades of communist central planning.

And resentment lingers against the West Germans, viewed by many as outsiders who took advantage of the communist collapse.

After East Germany and West Germany unified in 1990, the German government sold off 14,000 East German companies, often at extremely low prices.

In some cases the buyers, most of them West Germans, paid one symbolic deutsche mark to take over heavily indebted or technologically backward firms.

The newly privatized companies slashed bloated work forces from thousands to hundreds. East Germany's so-called hidden unemployed become the truly jobless.

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Such events led to the stereotype of the mean "Wessie," or West German. Many "Ossies" or East Germans, in particular those who struggled to bring down the communist system, now consider unification a form of neo-colonialism by the Wessies.

"Only the people with a lot of money, they had a plan. They've realized their visions. And now we have the result," said Sebastien Pflugbeil, co-founder of New Forum, a small leftist party formed in East Germany before unification.

"About 95 percent of what was before in the hand of the GDR (East Germany) is now in the hand of Western people," Pflugbeil said.

Some West Germans who went East used unscrupulous means in pursuit of profits. Some who bought companies from the Treuhand, the government privatization agency, received redevelopment aid on the promise of saving jobs but reneged on their agreements.

Such West Germans earned a reputation similar to U.S. "carpetbaggers," Northerners who went to the South to take advantage of unsettled conditions there after the Confederacy lost the Civil War.

Some analysts consider the negative image of the West German entrepreneurs unfounded, contending that, for the most part, they have had a positive effect.

"Some (privatized companies) very successfully," said Wolfram Fischer, co-author of "Treuhandanstalt: The Impossible Challenge."

"And there were others who were really carpetbaggers and got some profit out of it or ruined the firm. But the percentage of those was not that big," Fischer said.

Nonetheless, the negative stereotype could help explain the unsolved murder of a prominent West German businessman who headed the Treuhand. Detlev Rohwedder was fatally shot in April 1991, days after he announced a draconian privatization plan.

Some East German firms were taken over by West German buyers for "fire-sale" prices

Some East German managers, however, agree with West German owners that their companies needed to restructure. The Skett machine tool plant in Magdeburg, for example, slashed its work force from 12,000 to 500, but still needed state aid before turning a profit.

Skett Managing Director Dirk Pollak said East German employees and West German owners worked together to turn the company around.

Yet many East Germans still feel the negative effects of unification.

"It's been a mixed blessing," said Ilka Dietmann, 28, an East Berlin student who is now unemployed. She is bitter about losing the chance to become a teacher because the government didn't recognize her college education.

"Life has become stressful in East Berlin and very expensive. A lot of people lost their careers. Life has changed, and not always for the better," she said.

Reuters contributed to this report.