Term Paper on "U.S. and Germany"

Term Paper 3 pages (1039 words) Sources: 1+

[EXCERPT] . . . .

U.S. And Germany

Although by no means responsible for the reunification of Germany, American President Reagan did utter one of the most famous sound bytes of the late twentieth century when he told Soviet leader Mikhail Gorbachev to "tear down this wall." The dissolution of the Eastern European communist bloc became a political and economic imperative for the United States, because the Cold War resulted in strained foreign relations and limitations in free trade. The end of the Cold War would mean renewed political hope and perhaps more importantly, the expansion of free trade throughout Eurasia.

The United States played a key role in promoting free enterprise throughout Eastern Europe because it would benefit them; Reagan's staunch capitalism especially favored the downfall of the Berlin wall, which meant that German businesses could expand into Brandenburg, Mecklenburg, Saxony, Saxony-Anhalt, and Thuringia, taking advantage of a well-trained workforce and preexisting industrial infrastructure. However, when the Berlin Wall fell, East Germany was economically depressed compared with its Western counterpart. Centralized industry meant that workers were highly skilled but unmotivated and not used to innovation or entrepreneurship. Moreover, throughout the Cold War and after, willing workers and especially youth fled to West Germany, depleting the East German workforce and leading to a brain drain. Reunification has been more of a boon than a bust, but the problems inherited from the GDR and the Soviet system continue to plague Germany. The United States might also have hoped for a more American-style response to reunification rather than the welfare policies that the FRG has traditionally pursued.

The Soviet system began to show signs of crumbling before the Berlin Wall fell. Gorbachev's openness to free trade, the Perestroika, was the culmination of years of signs that the communist model was not working well. The suppression of free enterprise could not stand up to widespread globalization by the late 1980s. For example, the state-controlled agricultural and industrial sector in the former East Germany left no room for innovation and entrepreneurship: the hallmarks of free enterprise. Reunification meant that more of Central Europe would jump onto the capitalist bandwagon and the free market policies pursued aggressively by the United States since the 1980s.

Just as Eastern Europe would come to depend on the United States and Western Europe to stimulate its latent markets, so too would the United States look to Eastern Europe as a potential source for financial growth. Reunification has proved to be mutually beneficial for both Germany and the United States, even though economic progress has been sluggish throughout the former GDR. However, "most of the people of the former GDR still cling to the old socialist dream that poverty can only be overcome by the state," notes Schirrmacher. The tax monies that the reunified German government has devoted to reviving the East German economy have yet to result in the successful establishment of small businesses. Germany's problems have indirectly become America's because of Germany's literally central position in the European Union.

The repercussions of German reunification affected the United States profoundly, just as the Stalinist policies of Walter Ulbrecht did during the Cold War.… READ MORE

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