The foundation of the Treuhand

The DDR establishes the Institute for the Fiduciary Administration of Public Property

The collapse of communism and the peaceful revolution in the DDR presented the new East German government with a problem: what was to be done with all the state-owned enterprises? Although they were large, unwieldy and ultimately unprofitable, they owned many assets. Seeking to manage this agglomeration of wealth in the public interest, Minister-President Hans Modrow moved on 1 March 1990 to establish a trust (Treuhand), tasked with taking stock and either privatizing or shutting down every East German public company. This proved to be a mammoth task, involving tens of thousands of sites and four million employees.

Nothing like this had ever been achieved on such a scale and there were no established models to follow. This was just one of the reasons why the Treuhand, staffed largely by West Germans, made numerous errors of judgement. This situation of mismanagement was compounded by incidences of the misuse of subsidies and the misappropriation of funds. Millions of ordinary Germans were thrown into unemployment. Today, many East Germans look back with bitterness on the effect that this programme of denationalization had on their lives.