The impact of Ostpolitik on the GDR economy and standard of living

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The impact of Ostpolitik on the GDR economy and standard of living

Advantages

  • Honecker was able to increase spending on welfare due to cheap loans available form the FRG
  • During = the 1970s and 1980s, living standards in the FRG improved and consumer goods e.g. cars and household goods became more widely available
  • The GDR overcame the shortage of certain goods as a result of trade agreements with the FRG

Disadvantages

  • The GDR borrowed recklessly from the FRG
  • 8% of East German foreign trade came from visitors from the West exchanging currency
  • Pulled the GDR towards the West, this caused political problems
  • Some loans from the FRG were tied to specific arrangements

Evaluation

The GDR was too dependent on the FRG and this made the USSR concerned.

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