Corporate governance and the former East Germany: The role of the Treuhandanstalt in moulding the new German economy

This paper demonstrates the development of economic reform of the new Germany following the collapse of the Berlin Wall. The analysis focuses on the Treuhandanstalt (THA), established in 1990, with responsibility for dividing up East Germany's national assets. The role of the THA is shown as a key social actor in moulding the new German economy. Decisions that were highly detrimental to the former German Democratic Republic (GDR) - resulting in job losses and de-industrialisation on a massive scale - were treated in an entirely perfunctory fashion. The manner in which the THA conducted its business thus took little account of the economic need to conserve employment and the symbolic need to preserve enterprises in the East.