6th Herbert Quandt Lecture

6th Herbert Quandt Lecture


– Good afternoon, ladies and gentlemen, and my apologies for the
weather-related delays. I’m Joel Hellman, I’m dean of the Walsh School of Foreign Service here at Georgetown University, and on behalf of the School
of Foreign Service, and the BMW Center for German
and European Studies, I’d like to welcome you here for the sixth Herbert Quandt lecture
at Georgetown University. This lecture series is
named after Herbert Quandt, who was instrumental in
taking BMW from the verge of bankruptcy in 1959 to
enduring international success. Alongside his business
accomplishments, Herbert Quandt was also a generous and a
far-sighted philanthropist, who was keenly interested
in fostering dialogue and increasing mutual
understanding among nations. The Herbert Quandt lecture
series was conceived to honor and to advance
those noble ideals. Past Quandt lectures have featured such luminaries as
President William Clinton, Foreign Minister Joschka
Fischer, and many, many others. This afternoon, two days
before the 25th anniversary of German unification,
we welcome to Georgetown two major architects of that
unification, and more broadly, the entire post-Cold War
settlement in Europe. We’re honored by their presence. Let me start the proceedings
today first by introducing Dr. Philipp Ackermann, the Minister and Deputy Chief of Mission for the Embassy of the Federal Republic of Germany. Dr. Ackermann joined the
German Foreign Service after he received a PhD in art history from Bonn University
and he currently serves as the Minister and
Deputy Chief of Mission. Previously he headed the
task force for Afghanistan and Pakistan for the German
Foreign Office in Berlin, and among other
appointments, Dr. Ackermann has served the German Embassy
in Rabat at the permanent mission of Germany to the
United Nations in New York and he became the principle speech writer to former Foreign
Minister Joschka Fischer. Dr. Ackermann also accepted
a civilian assignment as head of the German PRT
in Kunduz, Afghanistan from 2006-7, and later oversaw
the political department of the German Embassy in New Delhi. Let me welcome Philipp Ackermann,
and begin the proceedings. Thank yu very much. (applause) – Dean Hellman, thank you very much for this kind introduction, actually, I’m a bit ashamed that
you called all my CV. The only thing that matters in this room is that I’m Bavarian, you
know, I’m from Bavaria so that’s, I think, the … Dean Hellman, Dr. Waigel, Dr. Zoellick. One of the many nice things
about German unification is that we can celebrate
two anniversaries in a row. In 1989, the Wall came down. In 1990, we became one country again. So last year, we had the 25th anniversary of the fall of the Berlin Wall, triggered by a peaceful
revolution in East Germany that led to the toppling of
the Communist government. In 2015, we are celebrating
the 25th anniversary of the unification of Germany. The latter is certainly the
less emotional, more rational statesman-like event, but
it is a huge achievement that can’t be overestimated. The smooth and orderly
accession of the GDR into the Federal Republic was the result of a far-sighted statecraft
and skilled diplomacy. To put it bluntly, 45 years
after the Second World War, it was not self-evident that
the international community was prepared to welcome
a unified Germany again. In hindsight, all Germans, no matter which political affiliation they belong to, can be grateful that we
had a government in Bonn, and I hesitate when I say Bonn, it seems such a long time ago, to say that the government was in Bonn by then. It was in Bonn by then. We had a government in Bonn
that took the right decisions above all, when it came to Germany’s European and trans-Atlantic partners. Surely, it must have seemed hard at times to keep pace with the
events unfolding in Europe. But on the way to German
unity, Chancellor Helmut Kohl and his cabinet of
ministers always made sure that our allies and their feelings, as well as their occasional reservations, played a role in their deliberations. Tonight, you will hear
from two eyewitnesses or zeitzeugen, as we would say. It gives me enormous
pleasure that the long-time Finance Minister of that government, Dr. Theo Waigel, is here with us today. From 1989 on, he oversaw one of the most important ministries in
Chancellor Kohl’s government and was instrumental in many decisions relating to German unification. I’m looking forward to
hearing his insights and experiences from these
turbulent times in a minute. Ladies and gentlemen, you
might consider me partial in this matters, but I
think it is fair to say that the German unification has been and still is a great success. The enormous amount of
money invested in Germany’s eastern states, the new
lender, seemed well spent. In 1990, Chancellor Kohl
promised green pastures, grüne landschaften, in Eastern Germany, and at that time, he was
scolded for his promise. In hindsight, he was right,
as everybody who has been to Dresden, Erfurt or Potsdam
lately would have to agree with. Today Germany’s doing well,
economically and socially. Both our federal chancellor
and president, who by the way will come to Washington next
week, are from Eastern Germany, and today that seems
the most normal thing. The united Germany has found a new role on the international stage. Very few will say that Berlin acts overly confident internationally. On the contrary, from
abroad we hear expectations that we should do more
and with more vigor. And when I say abroad, I
mean this very country also. One thing is very important
and really should be recalled when discussing German unity, and that is the role of the United States
of America in its emergence. President Bush, 41, and his government were certainly the most generous partners. There can’t be any doubts. Without the support and
the help of Washington, it would have been much more difficult to achieve German unity. It is therefore with profound gratitude that we remember our American friends who reached out to us
when others in Europe, also this has to be said,
were still quite skeptical. The head of the US negotiating team of the Two Plus Four
Agreement, Dr. Bob Zoellick, is also here tonight, and
I’m very curious to hear his recollection of the
month of negotiations, which he will present in a bit. Some of you might remember
that President Bush then spoke of partners in leadership, meaning the US and Germany in 1990. I think that was a perspective that made a lot of people shiver
at the time, and not only outside Germany, also actually inside. And I think we, the Germans,
were then and perhaps are still now not quite comforted with this notion of leadership. The fact is still that we
are leading in some aspects. So in hindsight, maybe President
Bush’s characterization, while perhaps a bit premature
in 1990, was ultimately right. Ladies and gentlemen, I
think it’s worth remembering how smoothly and quickly German
unification was achieved. At a time when we all feel
the world is falling apart, it is useful to think
of success stories also. There are success stories,
small and bigger ones. They often don’t get the
attention they deserve. German unification, a historic
event that changed the life of almost every German for the better, I’m convinced is one of them. So let’s here what Theo Waigel
and Bob Zoellick have to tell us from these decisive
moments, months and days. Thank you very much. (applause) (speaking quietly) – Thank you, Dr. Ackermann. My name’s Jeff Anderson,
I’m the director of the BMW Center for German and European studies and the host of the Quandt lecture. I’d like to first take this opportunity to thank BMW for its generous support. It was their original gift
that makes not only the Center possible but also this lecture series. I also want to thank our
co-partner in this initiative, the Hanns Seidel Foundation and the Konrad Adenauer Foundation. Without their support and initiative, we wouldn’t be sitting here today. Thank you all for braving the gloomy day and the traffic to be with us. It gives me great pleasure to introduce Professor Ursula Mannle, who is chairwoman of the Hanns Seidel Foundation in Germany. An academician by training and
profession, Professor Mannle also pursued a distinguished
career in politics. A member of the Christian
Socialists Union, based in Bavaria since 1964, she has held important positions in the
party at both the federal and state level in
government, with policy briefs ranging from family policy and social policy to European policy. And as I said, she’s now the director of the Hanns Seidel Foundation in Germany. And it gives me great pleasure
to welcome her to the podium to introduce our guest
of honor, Dr. Waigel. (applause) – Dean Hellman, Professor
Anderson, Dr. Zoellick, Dr. Waigel, Dr. Ackermann,
ladies and gentlemen. In my function as chairwoman
of the Hanns Seidel Foundation, I am honored to welcome
you to this joint event with Georgetown University and
the Konrad Adenauer Stiftung. Your participation in such large number is a wonderful expression of
German-American friendship. First of all, I would like to
thank Georgetown University and especially Professor Anderson and the Konrad Adenauer Stiftung, with Dr. Hansel for their cooperation in
making this event possible. I would also like to thank Richard Telchik and his team in our Washington office for their tireless work in
putting everything together. We have gathered here to celebrate the 25th anniversary
of German unification. The Cold War dividing line ran through the middle of Germany for 45 years. Families, friends, the
people had been torn apart. When Germany was united
on October the 3rd, 1990, only 329 days had passed
since the Wall had fallen. I must confess, this 9th of November was for me the most emotional
day in my political life, when we come together in the
plenary of the German Bundestag and we spontaneously
sang our national hymn. On the 3rd of October, a
process was set in motion that restructured Europe towards
greater peace and security. After almost four decades, many Germans had given up hope of reuniting Germany. Even though our constitution
was only temporary, we say Grundgesetz, not
constitution, and included a clear directive to
accomplish Germany’s unity in freedom and self-determination. But the people in East
Germany had not given up hope and could not be contained
in their striving for freedom, self-determination and democracy. We are still grateful that this change was achieved peacefully. Therefore, the 3rd of October
is a happy, joyful day for Germany, Europe,
and the United States, our closest and most important ally. We are grateful that the
cause of freedom prevailed, and this was primarily possible
because the United States stood by Germany and gave their full support for unification. The relationship between
Germany and the US had never been stronger and more trusting than during this historic period. When we face tough challenges
today, we can look back to the cooperation between the
governments of Chancellor Helmut Kohl and President Bush the elder, and learn lessons of statecraft. Therefore, I’m especially
happy that two architects of this groundbreaking process
are here with us today, Bob Zoellick and Theo Waigel. Unification was a complex task with many architects in different fields. One of them was Bob
Zoellick, who served as the US Chief Negotiator during
the Two Plus Four talks, when resolved all external
questions concerning unification. Another was Germany’s Minister
of Finance at the time, Dr. Theo Waigel, who played
a pivotal role in the process of financial, social and
economic unification. Dr. Theo Waigel was for 30 years, a member of the German Bundestag. He served as chairman of
the CSU parliamentary group, Christian Social Union, not
Christian Socialists group. He became Minister of Finance
in this important time from April, 1989 to
October, 1998, and he was the party leader of the
Christian Social Party. As a member of Helmut
Kohl’s cabinet, Theo Waigel was involved in all relevant decisions concerning German unification
right from the start. In cooperation with Walter Romberg, his East German counterpart,
Dr. Waigel drafted the contract on the German Economic,
Monetary and Social Union. The introduction of the
German Mark as East Germany’s legal currency significantly
contributed to the irreversibility of German unity. During the negotiations
between Helmut Kohl and Mikhail Gorbachev on
the Caucasus mountains, he also played an
essential role in ensuring that Germany would remain firmly anchored in Western institutions after unification. A special achievement to be
highlighted was the withdrawal of the Soviet army, which
Theo Waigel negotiated with his Soviet colleague Stefan Zietalia. Payments amounting to
12 billion German marks as well as 3 billion
German marks worth of loans put an end to almost 50 years of Soviet military presence in Eastern Germany. Ladies and gentlemen,
I’m now looking forward to the words of two politicians
and active participants who have contributed significantly to the German unification process
and would like to thank you for your willingness to share
your experiences with us. We will start with Theo Waigel. Please, Theo, the floor is yours. (applause) – Dear Professor Anderson,
dear Dr. Zoellick, dear Minister Ackermann,
dear Professor Mennle, thank you for the introduction. Dear Dr. Hansel, ladies and gentlemen. It is a great honor for me to
have the opportunity to speak at Georgetown University, one of the distinguished universities
of the United States, especially to celebrate such
a significant anniversary of German history and
trans-Atlantic friendship. 25 years ago this Saturday,
the division of Germany was finally overcome
and Germany was united. I was Federal Minister
of Finance at that time and intimately involved
in planning and executing the monetary and economic
union that was a pre-condition and foundation for the
unification process. In late September of ’89, when I visited the conference center of
the Hanns Seidel Foundation in Bonn in Upper Franconia. I was asked about my
view on Germany’s future. My answer was, “the German question “is part of the global agenda.” The day after, I was deluged by criticism and political insults from
the opposition parties. Only a few days later, I
met President George Bush, father Bush, in Washington. He opened our conversation by
asking me how I would explain the future of Germany to a young German. I expressed my hope that
events in eastern Europe and development regarding the
self-determination of our people might ultimately help
to end the separation of the two Germanys. Condoleeza Rice, then Deputy
National Security Advisor, who wrote about this
conversation in her book, Germany Unified and Europe
Transformed: a Study in Statecraft, that I had not
more strongly expressed my confidence in a
forthcoming reunification. And I remember when
your Ambassador Walters came to Bonn, I think he was 77 years old, he was asked, “What do you
think, will Germany be united?” And he said, “Surely, in my time.” The people, laughed at the
time, who could not believe, and he was right. Naturally, we were aware of
powerful dynamics which had arisen as a result of various
peaceful demonstrations and the resulting public
pressure in East Germany. Cutting open the Iron Curtain,
the barbed-wire barrier separating Hungary and
Austria, and the exodus of refugees from Prague had
created a dynamic that no longer could be ignored by those
in power in East Germany. Yet we did not know how a
potential conflict between the population and the highly
armed regime would end, and how would the 500,000 Soviet soldiers. More than one million
Russians in Eastern Germany, how would they react that were stationed at the time in East Germany? In the spring of ’88,
Gerhard Schurer, one of the GDR’s leading economists,
approached Erich Honecker directly, regarding further
work that needed to be done on the national economic plan. The country’s net indebtedness would climb to 47 billion marks,
Eastern marks, by ’90. Investments would drop
off, the production of industrial goods was falling below the key performance indicators,
and wage policies were not linked to growth
in worker productivity. If this development were to continue, the GDR would be insolvent by ’91. Once again, on the day
of the 40th anniversary of the founding of the GDR, Erich Honecker lied to the East German people. Only a few days later, he was deposed and the economy experts
prepared an analysis for the new Secretary,
Egon Krenz, which indicated that a drop of between 25
and 30% in living standards would be required unless
massive capital support were to be given by the west. The GDR economy no longer
could be stabilized on its own. Now the West Germany government had to adjust to this new situation. Time and time again, we had
expressed our willingness to provide support in exchange for reforms and freedom rights for
the East German people. The question, “Which measures would help “the people of the GDR most
quickly and most effectively,” however, remained controversial. On November 10, ’89, the
Federal Finance Ministries started looking into
the GDR’s political and institutional structures as
well as the currency situation. We still assumed a net
indebtedness in converting the currencies for about
10 billion dollars. At that time, the direct
financial support measure by West Germany to the
GDR amounted to about 2.2 billion Deutschmarks annually. On November 14, ’89, a
first paper of the new currency policy and regime
in the GDR was prepared. The following steps were
considered essential. Autonomy for enterprises in the GDR. Introduction of competition. Removal of tne export monopoly. The gradual removal of
foreign exchange controls, realistic currency exchange
rates, central bank reform, independence of commercial banks, and social security measures
to help with unemployment. To that end, it was necessary
to liberalize prices. During the International
Strategy Symposium of the Hanns Seidel Foundation
on November 19, ’89, I pointed out that the East
German citizens’ desire for freedom had brought about
the opening of the Wall. Thereby, the German question
again had been moved onto the daily agenda of world politics. Reform movements in Hungary and Poland had progressed the most. On October 23, the proclamation
of the Hungarian Republic was celebrated with the words, “Today Hungary returns to Europe.” The election of the first
non-Communist head of government in Poland, Mr. Mazowiecki,
the introduction of political pluralism and
the intention to organize Poland’s economy according
to market-oriented principles are all the testimonies to the transformation process of this country. This was also the reason
why Chancellor Helmut Kohl promised support for the
People’s Republic of Poland. Concerns being voiced about the future direction of
Germany were unfounded. Even in the case of reunification,
nothing would change regarding Germany’s integration
into Western institutions. On the other hand, the
strong attraction of the European community and of
western democracies in general were strong motivating
factors that brought about the radical political change. We also looked favorably at the desire of eastern European countries
such as Poland and Hungary to establish stronger ties
to the European community. Thus, a joint European
house could be erected in which unified Germany
too would have its place. With regard to the
people of eastern Europe, the federalist structure of European Union would offer the possibility
to overcome national borders witout relinquishing the
individual economic and cultural trajectories of each region. On November 28, ’89, Chancellor
Helmut kohl stated in his Ten Point Program for the
removal of the partition of Germany and Europe, that
there would be an opportunity of overcoming the division of
Europe and of our fatherland. The path to German reunification cannot be planned at the conference table or with the help of an appointment book, but we can, if we only have the will. Already today, prepare those milestones that ultimate will lead to the goal. Later on he said, “Nobody knows today what “a reunified Germany
ultimately will look like, “but I am certain that the
reunification will become “a reality as long as the
German people desire it.” Under Item 10, Helmut Kohl repeated, “With this comprehensive
policy, we’ll work towards a state of peace in Europe where the German peoples may regain their unity during a process of
free self-determination. Unification remains the political goal of the federal government.” Thus, Helmut Kohl had taken the initiative towards the path for
unification on October 3rd, ’90. And I have to remark that Horst Telchik, the father of our Telchik
here in Washington, as an important assistance
made at that time to draft this Ten Point Program. How was the situation in
West and East Germany in ’89? In ’89 when I became Minister of Finance, the Federal Republic of
Germany had consolidated its overall budget, with public budget posting a surplus of 0.2%. Nobody knew at the time how close at hand Germany’s reunification was. The satisfaction of a
balanced budget in ’90 was however, outshone by joy
over the successful unification of Germany in less than one year. I had to take the chance. A budget with a surplus, or reunification? I decided for reunification, and I think I was right. (applause) A decisive issue was a
conversion rate of the currencies between the Federal Republic
of Germany and the GDR. The DIW, the German Economic Institute, had determined a purchasing power raisure of one Eastmark to 1.07 Deutschmark. A one to one conversion seemed feasible. This was amazing, since the
general debate focused on fixing the conversion rate at one to five. As productivity in the GDR
was significantly lower than in West Germany, I
realized that a conversion of wages and pensions at
a rate of one to one would endanger the competitiveness
of GDR’s enterprises and have long-lasting negative
effects on the state budget. Finally, a conversion of one
Deutschmark to two Eastmarks was agreed, with several exceptions. At the time, e specialist
at the Federal Central Bank had prepared internal
papers addressing the issue of quickly establishing an economic and currency union with the GDR. I would also like to take
this opportunity to do away with the legend that
the Euro was the price for Germany’s reunification. This view is held by
certain groups in France but also by German
historians and politicians. While I am not a
historian, but I was there. At times, contemporary witnesses are the declared enemies of historians. Already in ’88, during
the Hannover Summit, the Delors Commisssion
was tasked to prepare a concept for a common currency. In March, ’89, the Delors
plan was always on the table. At the time, nobody had
any idea that unification would be on the agenda
only six months later. What is true is that Chancellor
Helmut Kohl and his cabinet did not interrupt the
European process when the opportunity of German unification arose. This helped to calm
anxieties of our neighbors regarding Germany’s future role in Europe. In 1989 or ’90, neither the Chancellor nor the Finance Minister would
have been able to promise that many years later, ten
years later, a European Economic and Currency
Union would be ratified by both the Bundestag and the Bundesrat with a two-thirds majority. There was a meeting between
Federal Chancellor Kohl and Prime Minister
Modrow on February 13th. This was a historic date for Kohl. At issue was the fact
that the pending programs were sovereign German issues. Naturally it was
necessary to be in contact and agreement with the victorious power. Kohl was against a
conferience of the four former Allied powers without
German participation. Kohl pointed to the number of
people leaving East Germany for the west, which had
increased to about 100,000 by January and February. “We do not want an
exodus,” he said, verbatim, but he also said that
the Ten-Point Program had already been overtaken by events and that unification could
happen within one year. Then Kohl indicated his interest to offer a currency and economic union. A small group of experts
from the federal government of the German Central
Bank was commissioned to work out the necessary steps. This was a task of historic proportions, and time was of the essence. During a subsequent meeting
with the GDR’s Economic Minister Mrs. Luft, the atmosphere was frigid, as I strongly rebuffed her demands for 15 billion Deutschmarks
in financial assistance. I rejected the request
because any kind of financial transfer without prior
reforms would be like pouring water in a bottomless barrel. The Federal Central Bank
was in complete control of policy, which was
essential for the process. The GDR was forced to
operate under the same economic system as the
Federal Republic of Germany. For the GDR, this meant a
significant loss of sovereignty, which, however, was necessary
in order to guarantee the stability of the Deutschmark and trust in the currency conversion. When, on the 18th of May,
’90, Finance Minister Romberg and I signed the Currency,
Economic and Social Union Treaty in the presence of Chancellor Kohl and Prime Minister Lothar de Maizière. I passed one of the copies to
my colleagues with the words, “May God bless our fatherland,”
and he, a devout Lutheran, responded,”May He bless it.” I shall never forget these
parting words as I think back on the deeply moving weeks and months that presented this ceremony. On July 1st of ’90, the
conversion and issue of Deutschmark currency took place
in East Berlin and the GDR. The German Central Bank
did a brilliant job in handling all logistical
and organizational issues. There were about 180 billion marks in the savings and checking
accounts of GDR citizens. After the currency conversion,
the citizens of the GDR had available to them about
120 billion Deutschmarks. There was no inflationary
rush, as had been feared. It was a stellar effort performed
in a short period of time, only some weeks, on which
the Federal Central Bank rightly may look back with great pride. I shall never forget the
press conference on July 1st in East Berlin, which I attended
with my colleague Romberg. It was facilitated by a
shy, somewhat reserved lady, the Deputy Press Spokesman of
Prime Minister de Maizière. Her name was Angela Merkel. That too shows how much
things have changed. She now is the globally
recognized and respected Chancellor of Germany, and
our President, Joachim Gauck, he will come here to Washington next week, hails from the GDR citizen’s movement. To the question of
Anglo-American correspondents, I responded with a
somewhat laconic comment, “Everything is under control.” I could say it confidently. Economic necessities
dictated the financial needs following the currency union. The tasks were unprecedented. More than 40,000 enterprises
had to be privatized. Ailing infrastructure was
modernized with targeted investment assistance
and enormous investments in postal and rail services. In order to mobilize
West German and foreign capital for investment, a
comprehensive program of tax incentives through
investment grants and special override of provisions was created. Additionally, start-ups and
new enterprises had to be supported through targeted
assistance in order to gradually create an economic middle class. One of the problems in trying
to manage a unification from a fiscal policy standpoint was the lack of realistic financial data. There were uncertainties as to
the scope of financial needs for infrastructure and investment support. Available data at that time
was extremely unreliable. Experts from reputable
institutions came up with a huge spread of estimates,
from as little as 300 to 400 billion Deutschmarks over ten years. We now know the actual outcome,
just the sum of liabilities from the GDR’s budget debts,
the liabilities vis-a-vis the equalization fund,
the closing balance of the privatization industry,
and past debts of residential construction companies
amounted to every bit of 370 billion Deutschmarks. The necessity to finance
unification required an annual transfer volume
of between 4 and 4.5%w of GDP of West Germany to the east. The fact that too much money
went to consumptive purposes was not the Finance
Minister’s fault, but rather the result of wage policies that were not in line with productivity increases. Added to that were about
160 billion Deutschmarks for the purpose of stabilizing
the political and financial situation in the former
Soviet Union successor states and in the eastern European reform states. All experts agreed at the time
to tackle the fiscal burdens with a mix of financial tools,
such as expenditure cuts, loans, and tax increases. The chosen tool resulted, I
think, in a fair burden-sharing. The increase in Social
Security contributions affected enterprises and employers
alike, and the solidarity tax surges was based on
income tax progression. I am convinced that the
overall economic performance of the ’90s was satisfactory
despite the extra burdens. We were able to prevent an overburdening of the German economy. By removing subsidies and
preferential tax treatment, the federal budget was disburdened by 125 billion Deutschmarks in the ’90s. Despite the burdens of
unification, Germany, with its deficit rates of 2.7% in
’97, 1.7 percent in ’98, had fulfilled the most
important convergence criterion on the Maastricht Treaty. Nevertheless, it was clear
that the German fiscal policy-makers were confronted
with a Herculean task in the medium term. Only because of the mix of
instruments was a balance between economic, fiscal
and social policies, we could maintain our model role within the European Economic and Currency Union. The overall rate of the
new federal idebtedness which is essential for
the Maastricht criterion, fell from 3.4% of GDP
in ’96 to 2.7% in ’97 and to 1.6% in ’99. Unfortunately, this effect
went up in smoke in the years after 2002, but at that time
I was not Finance Minister, because Germany and other
countries did not take seriously enough the stability criteria. With regard to the national
debt, the Federal Central Bank provided a remarkable analysis. In its April 2000 monthly
report, it wrote that fiscal policy over the past decade
was on a consolidation course despite the largely weak
economic development. Over the entire period, the
cyclically adjusted deficit was significantly reduced
from 4% of GDP in ’91 to 0.5% in ’99. There were winners and
losers of unification, but everybody gained greater
freedom and that is, after all, our most important value. East Germany retirees are among
the major material winners of unification and social union. They received between 80% and
100% of the old age pensions. Little more than half of the
East German old age pensions were financed from revenues and the rest via transfers from the west. Research institutes and
scientists estimate the overall cost of German unity
over the past 25 years to have been between, 1,500
and 2,100 billion Euros. Of this amount, 60 to 65% went
towards the social sector. Professor Ragnitz of the
Dresden Ifo Institute says the following, “Overall,
the east provided itself a good steward on the
west’s financial means,” And Professor Karl-Heinz Paqué of the University of Magdeburg
considers the reconstruction of the east a successful endeavor. I consider a significant
conclusion made by the KFW, a major banking institution
in a large study from September, 2014, on
development in East Germany. According to the study, none
of the other eastern European tranaformation countries
were able to achieve such impressive progress. Today, East Germany is
in Europe’s middle range. This opinion prompts an
interesting comparison. When comparing the
German Wirtschaftswunder of the post-war period between ’50 and ’56 to development in East
Germany between ’91 and ’97, one notices an almost
equally strong interest during both comparison periods where capital GDP rose by 60%. Naturally, workers’ productivity
in East Germany continues to be below that of West
Germany due to differences in economic and sectoral structures. There are fewer large enterprises
and the lower productivity is also an expression of
lower investment activities. Having said that, one has
to note that enterprises, communities and private business sincw ’91 have invested about 1,600
billion Euros in East Germany. The East German unemployment
rate, which had been at 18%, with 1.7 million unemployed
in 2005, fell to 10.3 percent. It should be also said, however,
that just under 1.8 million people moved from East to
West between ’90 and 2012. One point, I think, wes
had not considered enough. From 1949 to 1989, three
million people left the GDR and went from east to
west and that is a loss of human capital, no
country can suffer this. Export is a growing engine
for East Germany’s economy. The share of export sales
rose from just 12% in ’95 to 34% in 2013. With respect to the education
sector, East and West German universities are qualitative equals. Good childcare facilities
enable greater female labor market participation
than in other regions. In September of last
year, the German newspaper Handelsblatt wrote in a major article, “A new and strong Germany has arisen.” This was a fortuitous merger. During the time, freedom
and democracy were created not only for 70 million
in East Germany, but also for citizens in all eastern Europe including the Baltic states. Today, Berlin stands as a symbol of unity and reconciliation. Germany is a new powerhouse
in the heart of Europe, and Professor Fratzscher
of DIW, a German economic research institute in Berlin, opines that the economic aspects of
the reunification have been a great and impressive success story. 15 years ago, a successful,
high-ranking Americsn manager remarked to me, “Theo,
to buy GDR, I think, “was a bad acquisition.” Initially, this really annoyed me, but then I found an answer. I told him, “17 million people
in East and Central Germany “have achieved freedom and democracy. “NATO security range was
extended to all of Germany. “The world’s security structure
was significantly improved. “Tjere are no longer Soviet
soldiers on German soil.” Whenever I met him, he laughed at that and he never repeated the question. I shall however, never forget
the refrain of the song Colonel, General
Bullikoff’s Last Soldiers, sang in both Russian and German, during the presentation
of the key to Kalshorst, the former Soviet
headquarter in East Germany. In English, it would sound something like, “Germany, we stretch our hands,
returning to the fatherland. “Our homeland will accept us free, “we all as friends to you shall be. “On friendship, love and trust,
our future we build must.” With the Treaty on the Currency,
Economic and Social Union that went into effect on June 30 in ’90, the constitutional process of
German unification had begun. It found its continuation
in the agreement of, on the establishment
of German unity between the Federal Republic of Germany and the German Democratic Republic,
which was negotiated by by Wolfgang Schauble and Gunther Krause, and Federal Foreign Minister
Hans-Dietrich Genscher and Markus Meckel negotiated the contract on the final provision for
Germany, which was concluded on the 12th of September, ’90. That, I think, was a
masterpiece of diplomacy, and Mr. Zoellick, we have
to thank you very much. You did, and your
partners, an excellent job. We will never forget this. (applause) On the 9th of October,
’90, for the first time a representative of a united
Germany, I was able to sign together with Ambassador
Terikoff the agreement on some transitional measures
between the government of the Federal Republic of Germany and the Union of the Soviet Socialist Republic and the costs for reduction
all the troops, the soldiers, the tanks and many many
bombs in Eastern Germany, the costs were 12 billion Deutschmarks. That is half of the amount
which now is necessary to restructure a Landesbank in Germany. In the history of the last century, 1990 clearly was the
best year for Germany. After unification, Germany
has lived up to its promises. We remain strong partners
in the western alliance, and we are committed to
close friendship with the United States of America. We have continued on the
common European path, and in spite of the financial
burden of unification, we stuck to the Maastricht criteria and put into effect the
European Monetary Union. During the financial crisis,
Germany remained as strong as a rock within Europe and worldwide. Germany is aware of its increased
responsibility in Europe. We now live up to the
partnership and leadership that George Herbert Walker
Bush had offered to Germany already in May, ’89. Germany is carrying the
necessary financial risks of those countries most affected
by the financial crisis, in particular Greece, because
of its geopolitical rule. We also take in the
largest number of refugees fleeing from Syria, the Middle East, and other countries in turmoil. Germany is a stable democracy,
and you can be certain you can always rely on
us as friend and ally. Thank you. (applause) – Dr. Waigel, thank you very much for your fascinating account of somebody
who was there, and thank you very much for setting the
record straight on some of the very important questions
you described here today. My name is Lars Hansel,
I run the office of the Konrad Adenauer Foundation
here in Washington D.C. I’m very happy to partner with
the Hanns Seidel Foundation and with Georgetown University
here for this event. It is certainly a distinct
honor and also a great personal pleasure for me to introduce the next speaker, Dr. Bob Zoellick, and I would like to take the freedom to start on a personal note. When I think 25 years back, a
little bit more than 25 years, I lived in the Communist
eastern part of Germany. I was a young student, as
many of you here today, and I also studied at a
old, respected university, but in the fall of ’89, I hardly studied. I took, like many others, to the streets to demonstrate for freedom
and change in Germany. My prospects in life
then were very limited. Fast-forward 25 years. Now I live in the United
States, in Washington. I have a three-uears-old daughter
with an American citizen, and I represent an organization with the Konrad Adenauer Foundation that supports democracy and freedom on more
than 100 countries worldwide. Well, when I think about it,
I think it’s still a miracle. And therefore it’s a very
special occasion for me to be here with Dr. Bob
Zoellick and Dr. Theo Waigel, who changed the life of so many people, in Germany and beyond. And it is because of
people like Bob Zoellick and Theo Waigel that I can be here today, and I definitely, Dr.
Waigel, belong to the winners of the unification, and
I’m very proud for that. Let me briefly introduce
Bob Zoellick here. He an impressive CV,
it’s very impressive what Bob Zoellick did in his life
and let me start by saying that he has German family roots, something we found out only recently. I was very pleased to find out about it. He has major achievements in
high government positions, in particular as Undersecretary of State, as US Trade Representative,
in high positions in business and academia. Bob Zoellick was also the
president of the World Bank. I’m not able to mention all
of his acievements here, otherwise you would not have
a chance to listen to him anymore, so therefore
I will confine myself to what is important for this event today. In 1990, Bob Zoellick was
not only an eyewitness, he was a crucial player,
he was a key player in the unification of Germany, making sure that the unification would be successful. Dr. Robert Zoellick was the
US negotiator on behalf of James Baker in the Four
Plus Two negotiations, and worked with counterparts
like Wolfgang Schuable, and he also met with
Theo Waigel at that time. We’re all so honored to have
both of them here today. There’s hardly anybody
in the United States who would be more fitting
to talk about unification from a US perspective than Bob Zoellick. Before I pass the floor to Bob
Zoelick, let me briefly quote from a Senate hearing
on September 26th, 1990, when Bob Zoellick testified
in front of the committee. He descrribed the
unification as a success for US foreign policy, in
particular the foreign policies of the US president, but he also added, “Above all,” and I quote,
“Above all, Mr. Chairman, “it is a triumph for the
American people, who helped “a former adversary
build a strong democracy “and rebuild a bustling
economy, and who then “were willing to share sacrifices “for the German people
to protect their liberty. “And because the American
people know that freedom “is indivisible, we too never gave up hope “that someday all of
Germany would be free.” And a little bit later, he relates to a quote of Konrad Adenauer, when he says, “Germany rewrites the
dictum of the first post-war “Chancellor, Mr. Adenauer. “It’s no longer ‘freiheit uber einheit,’ “it is now ‘freiheit and
einheit,’ freedom and unity.” The United States was indeed
the only power Germany could fully rely on, and I would
like to take this opportunity to thank the US administrations
and the American people for their unconditional
support, and I also personally would like to thank Bob
Zoellick for his personal role in German unity and freedom. And I would like to give him
a small token of appreciation. (spplause) And I also would like to
thank Dr. Theo Waigel. Dr. Bob Zoellick, the
floor is yours, thank you. – Well, I want to open by
saying what a privilege it is here to be with
Dr. Waigel, given his many accomplishments,
not only in unification but throughout his service to Germany. I also, as I hope you did,
found his remarks to be very informative from an
economic history point of view, and a unification point of
view, and carried many insights, so I want to thank him for doing that. But most important, I want
to thank him and his wife for coming to the United
States on the anniversary, the 25th anniversary
of German unification. It’s a very gracious thing
to do for you to share that very momentous national
experience with all of us in the United States so I
thank you for doing that. I also want to thank
the Quandt Foundation, and thank Professor Anderson
for his work on this, because I think as we talk
about some of the events of the past, we can also
touch on the challenges for the future, and I hope
all of you share the view that Dr. Waigel mentioned
and I certainly believe, about the importance
of the German-American relationship going forward. There will be many tests
and twists and turns, but a institution like
this that has been created at Georgetown, I think is
very important for the future. And in that context I also want to thank the Hanns Seidel Foundation,
and Professor Mennle. The German stiftung I think, are one of he most fantastic creations I’ve operated with them in
many different capacities in the field of development and security, it’s a wonderful commitment
of Germany to the world, and so I think you and I
also have to join in saying it’s a particular pleasure
as Dr. Waigel mentioned to have Richard Telchik
here since his father and I were close compatriots, and
without him I’m not sure German unification would have happened, so it’s wonderful for Richard to be here, and I’m glad you had
a chance to meet Lars, who I met with a couple years
ago and we discovered that some of my family is from
Bautzen, which is also part of his hometown, so it’s a wonderful example of kind of east and west coming together. For Minister Ackermann, as I
listened to your impressive bio, I was trying to think
which would be more challenging, being a speechwriter for Joschka Fischer, or being in Afghanistan with a PRT, and I’ll let you tell
us that story sometime. I’m really delighted
that you’re here with us. And also, it’s a wonderful
opportunity for you to get to know Dean Hellman, my friend Joel, who worked with me at the World Bank. He’s a fantastic choice
of a dean for Georgetown, I’m so delighted the
appointment, but one of the capacities in which we worked together and I learned a lot from
Joel was Joel was one of the leading experts in the
World Bank and globally at the challenges of fragile
and post-confict states. And indeed I’d asked him
to head a center we created in Nairobi to draw together our expertise, sp perhaps you can share some
of your experience together. Thank you Joel, also, for being here. In the spirit of being at
Georgetown, I thought that I would share with you a few lessons
from the experience of German unification, to share
some history, but perhaps also share some observations that have more general application. Then I’ll close with a few comments about the outlook for the future. The first that I want to emphasize is the importance of anticipation. It’s extremely hard to
predict specific events in our own lives and the world at large, but I do think it’s possible
for public officials to have some awareness of the trends and direction and development,
so you can try to prepare and position yourself for the future. So cast your mind back to early 1989 when President George Herbert Walker Bush, President Bush 41 as we
refer to him, took office. Gorbachev was a phenomenon
that had excited all of Europe. You could se the stirrings
of excitement in some of the eastern European companies
and for sure in Germany, this was an incredible phenomenonm great incredible sense
of hope and opportunity. And so one of the challenges
for President Bush was, how would he
position the United States to deal with a force
that, we didn’t quite know what Gorbachev had in mind. Turned out I’m not sure Gorbachev totally knew what he had in mind. One of the most striking
little starts of the story of unification was as early as May. Dr. Waigel was referring to this. Discussion in some ways
started in the United States earlier than people were
comfortable starting it in Germany. In May of 1989, President
Bush gave an interview in which he welcomed the
idea of, he used the term reunification at that point,
and he put it in a context of saying, the confidence
the United States had in a democratic Germany. He useda phrase about Germany
had certainly paid its dues and at some point you
have to let a guy up, in sort of normal phraseology, but it was a very strong
statement from the start of the US belief that
reunification should happen. Now, that same month there was
a very importand development that’s been lost in most of the histories, but I think it’s quite significant. In May of 1989, there was
a NATO summit meeting. And many of you will recall
that, going up to 1989, the dramatic events
between the United States and the Soviet Union and
NATO and the Soviet Union, were the nuclear reduction
talksm and in particular, the INF talks, which eliminated the nuclear forces at
the intermediate range. But it left a very sensitive item of the short-range nuclear forces, and the then-German Defense Minister said, “The shorter the misiles,
the deader the Germans.” So it created a very
controversial issue for NATO. Would you modernize short-range
nuclear forces exactly at the time you’ve removed
the intermediate forces, at a time when German public
opinion was looking at Gorbachev as opening the new day? So President Bush took a
very bold and dramatic step, which actually his Chairman
of the Joint Chiefs opposed. And that was, he proposed
a major reduction and equalization of conventional forces, he shifted the agenda
from the strategic agenda to the conventional force agenda. And he drove this through the NATO summit, which wasn’t so easy,
there were come countries that were resistant to this shift, and it had some very important effects. First it took the short-range
nuclear forces issue and put it to the side, because
if you actually were able to equalize, at much lower levels,
the conventional forces, the short-range nuclear forces
would be less important. That removed a big irritant
in US-German relations. Second, it created the prospect– Dr. Waigel alluded to this
in more general terms, that maybe Soviet forces would leave. Maybe Soviet forces would actully leave the central and eastern European countries and further support
the political stirring, and third, for President
Bush, it clearly established his leadership of the alliance. It was a bold move, it was
done in some unusual fashion with a NATO communique, drafting it, but it was a very significant
event and on that same visit, that’s when President Bush visited Mainz, the home state of Chancellor Kohl, and gave the speech about
partners in leadership to which the Minister referred and which I’ll come back to in the close. But the important point
was then, in the summer, President Bush also took
trips to Poland and Hungary, which you recall were
the leading countries in the process of
political liberalization, and wanted to show his support for the peacefull process of change. So by the time we came to
the late summer of 1989, the President’s first
year in office, we were relatively well-positioned to deal with the avalanche of events
that was soon upon us, starting actually that summer
as Germans from the GDR, as you recall, went to
the Embassy in Prague a and you had the movement of people coming as Hungary lifted the barbed wire. Second observation about
foreign policy and strategy drawing from this event, and that is, it’s natural for leaders, officials to be confronted with events day by day, just read your newspapers, you can see the number of problems people deal with. But I believe it’s actually
critical for people to have a sense of how those
individual actions or decisions will fit in a larger framework. So United States diplomacy
with German unification operated within a framework
that President Bush mentioned, I think, in the Mainz
speech was the notion of a Europe whole and free. We were not only dealing
with the many challenges of German unification, we’re dealing with the challenges of European unification. This had implications, for
example, it’s the reason why the United States was so
strongly committed to the notion that Germany had to be united within NATO. This was not only for the
security of Germany, but also it was a reassuring step for
the rest of western Europe And with the concern that
if security arrangements weren’t built on those
structures, might there be a return someday to the
old “met-oh-re-oh-pa” set of concepts? Another important step
was the recognition that the united Germany would
be a European Germany, as Dr. Waigel mentioned, and
that the European community would become a closer union,
and it was in the interest of the United States to develop
those ties with that union, so in a speech in Berlin in
December, quite early on, Secretary Baker outlined
the interests of a closer US-DC relationship, which
we later institutionalized. But we also wanted to have a
home for all the countries, so in that same speech he
talked about transforming the CSCE, which had come
out of the Helsinki process, to what became the OSCE,
with the idea that the OSCE had to be transformed with
a different set of purposes to support democratization
across the larger states. We had sensitive issues such
as the Polish border question, which as many of you may
recall, remained a very sensitive topic, and in part there was a slight difference of opinion here between Foreign Minister Genscher
and Chancellor Kohl. Chancellor Kohl was trying
to deal with some sensitive political issues, and
frankly, President Bush did a private mediation, with
Prime Minister Mazowiecki of Poland to give assurance,
to allow Kohl the room to do things but then allow
that process to go forward. There was also an important
idea related to the future process of unification for Germany. I recall this quite
strongly because some of my German counterparts in the
Two Plus Four negotiations were under incredible pressure. At times we’d come under pressure
to perhaps give something a little bit away in terms
of German sovereignty. Accept that you were gonna
move towards a unified Germany, but maybe at the edge,
make a little change. And some of them almost
had tears in their eyes, because I was the strongest
supporter at the table of the notion that Germany
should not be singled out, Germany needed to return
to full sovereignty. This was not only our
trust and faith in Germanu, but frankly it was the
concern that we didn’t want to plant the seeds
of a future problem, for some future generation
of Germans that might say, “Why are we being singled out, “why are we being treated differently? There was also the question,
thinking in a historical context as Dr. Waigel has done
such a nice job of explaninf, of wanting to avoid past mistakes. For example,w e had in
mind wanting to avoid what we call “the Versailles victory.” This was the notion of the
peace treaty after World War I that planted the seeds
of its own destruction. So we worked as much we can
without curtailing our interests and principles, to work
with the then-Soviet Union, try to see what interests
that we cuold try to address, and Dr. Waigel certainly talked
about some of the major ones on the economic side, but there were others in that process as well. So we saw this as a
challenge about dealing with these individual actions
within this larger framework and we hoped that the framework
would become not just a closing chapter on the Potsdam
Agreement and World War II, but it would be an opening
chapter in a foundation for a future relationship
with Germany and NATO, the European Union, and then the world. Third lesson. I talked a little bit about
anticipation, I’ve talked a little bit about strategy
and framework, but it’s very important for diplomats to keep an eye on what’s really happening on the ground. I can think of some examples
today where I sometimes see a little disconnect between
the language in Capitals and what I watch happening
in particular areas. And the story of the language
on the ground in 1989 was the story of the German people. We both alluded to this and
Lars has also referenced it. The driving force of this
were Germans east and west. And the story that brought
this home to Secretary Baker and to me so clearly dates
from December of 1989, so this was in about the first
month the Wall fell down. We had gone to East Germany
to see the Modrow government. It was a very sensitive
issue, whether we should accord them any legitimacy
by meeting them, which we hadn’t in the past. But we wanted to send a signal
that they should move towards re-elections, follow the types of process that Dr. Waigel was talking about. But we didn’t only want
to meet that government, so we went to the Nikolaikirche in Potsdam to meet some of the dissidents, some of the extremely
courageous Lutheran pastors and their leaders, who had
frankly stood up against incredible threat and
evil to start the process. And I remember still as
clearly today as it was then that as we were talking to
these courageous people, it had a sense of poignancy,
because as we were asking them, “So what’s happening
with your congregation, “what’s happening in Eastern Germany?” They told us with some regret
that while they wanted to create a third way, der dritte Weg, that’s not what their parishioners wanted. Their parisioners wanted what
they saw on West German TV, or they saw what their
West German cousins wanted. So a light went off in our
minds and that was that unification would not be a
merger, it would be a takeover. Professor Mennle referred to
the, what we say in English is the basic law, sort of the preliminary German constitution,
this had an implication. As many of you know, there was a term. I forget if it’s 123,
it’s in the three digits, it was designed for the
basic law to have a merger. But instead, I remember meeting
with my colleagues from Bonn at the time and we came to a
conclusion at the same time, this should be done through article 23, which was the article
designed for the Zahlen. So this was a takeover,
not a merger process. But the other important
part about understanding what was happening on
the ground was that the movement of people, the
interests of people, the emotions of people, was
both a risk and an opportunity. The risk was, if we didn’t
move with those people. Every day you had to worry
about an accident, and a sense of frustration
that the four powers were– You heard it today, 25
years later from Dr. Waigel, were interfering with the German people. Who knows what would happen
with Soviet soldiers. Throughout this process,
we were on tenterhooks that something could go wrong. Because it all went right, it looks easy. Every day was nerve-racking in that sense. So we had to keep the process
going, but on the other hand that movement of people became
a tool in our diplomacy. Because when others
starting most of course with the Soviet Union but also
some in western Europe were a little reluctant, we could say, “This is moving, this is happening. “We have to sort of
work with this process.” And to give you an
interesting little example, this is for the students at Georgetown, is sometimes diplomats
operate in s world that seems a little bit de-linked
from overall public opinion. And because I’d been involved
with some political events, I remember having a perspective
a little different than some of my close colleagues at the
State Department and the NSC. One that related to the creation of the Two Plus Four process. The Two Plus Four process was
announced, I believe it was early February in Ottawa, of 1990. As many of you recall,
I’m sure Lars recalls, that’s when the election,
for the first re-election in Germany was supposed to be in March. One of the reasons that I
was so strongly committed to announcing the Two Plus Four. Put yourself in the minds
of East Germans who had not had a free election for 70, 80 years. If you or I or people in
this audience are told there’s an election, you may
or may not like the choices or you may be worried about
getting to the voting booth, but you generally believe
that it’s a real thing. Would these people in East Germany believe that it’s a real thing? And so we thought that the
announcement of the Two Plus Four would signal to the East German
people, this is for real. The Four Powers have actually agreed to the unification process. My vote matters, I will take
part in the democratic process. So it’s an interesting example
of how public diplomacy, statecraft, all could fit in to sort of building this momentum on the ground. The last lesson that I’ll
refer to is also the fact that we talked about anticipation,
we talked about strategy, we talked about knowing
things on the ground, the critical need to be operational. And Joel will probably know
this from his experience and maybe even from working
with me at the Bank. There’s lots of times people
have ideas, but you have to make things happen, you have
to push the process forward. And if you think about
this, in a relatively short space of time, we not only
had to create something called the Two Plus Four process,
which was designed to cede the Four Power rights,
but we were working on the CFE negotiations, we were
dealing with changes in NATO, so that it would be more accommodating. We were dealing with the OSCE
process, to make CSCE to OSCE. So I described it as a
multiple-ring circus, and we were partly trying
to coordinate these efforts to sort of keep them in time and movement, and what always hovered
above us was the fact that we had no idea how much time we had. Some of the scholars that
write about this will say, “Oh, you should have done
this, slowed this down,” so on and so forth. Keep this in mind. The Wall opens in November,
’89, the Two Plus Four Agreement is sighned in September, ’90,
unification, October, ’90. December ’90, Zhevernasy resigns. August, ’91, there’s a
coup against Gorbachev. From my more parochial perspective, even in that period in August 1990, you had Saddam Hussein’s
invasion of Kuwait. My bosses, President Bush and
Secretary Baker, were getting pulled off to pull a whole
new coalition together. So we never know, we never
knew where the window for this opportunity would
close, we had to move. But at the same time, and
this is, Dr. Waigel mentioned, at the time that
Chancellor Kohl in November came out with the Ten-Point
Plan, he was heavily criticized for saying “You’re trying
to push this too fast, “you’re going too quickly.” And by the way, this is
where the US did play a very important role with
Gorbachev and the French and the British and the other
process to reassure them, so it goes back to my point
that it wasn’t just seen as a hasty unification,
but it was a restructuring of the overall European picture. I will conclude with this point
on the German unification. I think the best story to
fit this is one that I’m told that Helmut Kohl likes to
tell and I’ve often applied to my work, which is that
the measure of a statesman is somebody who sees
fate as she rushes past and grabs on to the hem of her cloak. This is a phrase from Bismarck. And when Kohl tells that
story it has an extra meaning, because of course if Helmut
Kohl grabbed on to the hem of somebody’s cloak he could
half-steer it as he went along. But I like that phrase because
what it partly shows is, fate moves, you have to be
alert to it, you have to act quickly, sometimes you may or
may not have the opportunity and as Dr. Waigel said,
this was an opening. This was an opportunity,
people had to move. I’m sure there were things
that were imperfections in the process, but it
moved pretty fast and things were put together pretty well. I think we’ll look back from a larger historical perspective. And now I’ll close with the reference that Dr. Ackermann and I both mentioned.; President Bush gave this
speech in Mainz in May of 1989, and I worked on that speech
and on the title as well. The Partners In Leadership,
and we knew that the phrase “leadership” in
Germany doesn’t always ring well, and we knew that this
would create some question. But we were partly both
pressing, we were showing respect and we were also forecasting,
because it was our belief in pure practical terms
that a united Germany would inevitably become the most
influential country in Europe. And this is still, as Dr.
Waigel mentioned, I understand, we understand history in the United States more than people sometimes recognize. We know this is not an easy concept. But the financial crisis has
certainly highlighted something that Germans are so reluctant
but will need to come to terms with, which is
Germany is dominating Europe even if you don’t want
to be seen as dominating. And this whole structure that
we are working on with NATO, the European Union, reflects that concept. So the notion of Partners
In Leadership, I think, has actually come to
fruition 25 years later, I come out exactly where Dr. Waigel did, because Germany now has still
many challenges but it has a rare and unique opportunity
that Germany has earned which is to shape the future of Europe, to shape the future of the
trans-Atlantic community. I believe you go to China,
there’s a lot of respect for Germany there, there’s
lots of opportunities. Now of course, Germany
can”t do this by itself. But one of the, I think,
pieces of unfinished business we have, so maybe this is an exercise for Georgetown faculty and the
Center, is the notion that I think, that the US-German
relationship over the past 25 years, while satisfactory,
didn’t fulfill its promise. And I think this is due to
shortfalls on both sides. And it’s very typical,
people have other demands, they’re pulled in different
directions, but I also think both sides took each other
a little bit for granted. So I believe this is actually
a moment, and one of the challenges for our next US
President, is to sit down with German colleagues and
recognize, this is not just to-ing and fro-ing on
bilateral issues, but there’s a series of issues that
one needs to understand the perspectives, including
the different perspectives. I highlight this for a
group like this because probably all of you wouldn’t
be here if you didn’t care about German-American relations. There’s a lot of ties
that bind us together, family, history, experiences
like German unification. Oh, I realize there are differences too. There are differences in culture
and history and political experience, and in my
diplomatic experience across the world, it’s important to
understand the differences too, as well as the commonalities
so that you can work with them, not try to push people to fit into one sort of model or another. So I think there remains great potential in this relationship, and I think that people like
Dr. Waigel and all of you who are committed to it, I
really appreciate the effort, because I think it’s
important not only for our two countries, but I think
it’s important for Europe, trans-Atlantic relations and globally. You’ve been very patient,
so I’m gonna close after, I am an American, as you know Americans like to tell jokes in speeches. So I’m gonna share with you
a closing story from German unification that will give you
perhaps another perspective on one of your European colleagues. When it came time for the
Two Plus Four Agreement, the final settlement
agreement, we obviously had to have this in all four
official languages of the Two Plus Four countries, so we had German, Russian, French and English. Well if you think about the
Two Plus Four countries, there were two countries that
claimed to speak English, Britain and the United States. And of course, Britain
particularly in the Foreign and Commonwealth Office
is understandably proud of their command of what
they think is their language. So when it came time for
the drafting, we shared it with our British colleagues. So one of the decisions we
made was to say to the British, “You are particularly
careful with draftsmanship, “Why don’t you take the
section on borders?” Because one thing everyone
wanted to know for sure was, we united Germany but where does it begin and where does it end? And if you go and you look at
the final settlement agreement you’ll see that one of
the ways this was stated was to point out that
the new united Germany would consist of the
Federal Republic of Germany, the German Democratic
Republic, old East Germany, and Greater Berlin, obviously,
’cause that was the old Four Power rights area and it had
to be unified within Germany. So you can imagine the surprise
when I got back the text from my British colleague and it said, “The new united Germany will
consist of the Federal Republic of Germany,” fine, “German
Democratic Republic,” fine, “and Greater Britain.” (laughter) So there’s a story in
some German circles that the British were not enthusiastic
but they were willing to make the final
sacrifice for unification. So thank you all. (applause) – Thank you both. The original plan called
for me to do a small kind of mini-interview with our two
distinguished guests and then turn it out to the audience,
but time is a little short and I do want to get the audience
involved, so if you start signaling to our assistants,
I’m gonna just put something on the table for our
panelists to think about but I won’t ask or demand
an answer right away, we’ll let them mull it over and we’ll take a few more questions from the audience. And I have to acknowledge
some sources here, I want to thank our wonderful
major students in the program, in the European Studies
program and the School of Foreign Service for help with
these questions, and I also wanna give a shout-out to
the high school students at Walt Whitman High School
in their Comparative Politics AP course who also contributed
to a little bit here. You all presided over a
major settlement at both the national and the
international level, in 1989-’90, and this anniversary is a
chance to celebrate that and it was a time of joy and optimism but when I think about today’s context, there seems to be little
cause for joy and optimism. In fact, I wonder whether
some of what was achieved back then that you
helped create is at risk. The European economy seems
to be as fragile as ever, the rise of right-wing
extremism seems to be prevalent throughout Europe and threatens
stability in many parts of the continent, there seems
to be a lack of solidarity within Europe, of the very kind
of solidarity that permitted the two Germanys to
unify in the first place. The integrity of the EU seems
to be at risk, as Greece may exit for one reason, the
Brits may exit for another, the Russians seem to have
completely abandoned any kind of commitment to a Europe whole
and free, and now we are looking at a crisis of epic
proportions with the flow of migrants from crisis zones
just out of Europe’s borders. Am I being too Cassandra-like, I mean, are these challenges manageable? If so, which ones deserve
first priority, and is the post-Cold War settlement
in some sense at risk today? That’s one big issue. Would you like to take a crack at it now? – I was pointing, I was
trying to get more time for me to think so I was pointing back. – Why don’t we take one
or two more questions from the audience and it will
give you both time to think and reflect, and then
you can pick and choose whichever questions you’d like to answer. Please. – I’m Barry Wood. I would like to ask Mr.
Waigel, and thank you for such a stimulating talk. It seems to me that indeed,
the birth of the Euro is at least indirectly
linked to German unity, and I’m wondering why you
seemed to be sensitive to that. After all, the Delors Commission,
you mentioned rightly, was before, but nothing
much was happening. Certainly the thrust, and I
think Mr.Zoellick has spoken of this in the past, the thrust
for moving forward quickly came following the
agreement on unification. Why the sensitivity on this link? – Many people in Germany at
the time were not very happy to lose the Deutschmark,
of course, and therefore, if we would say the introduction
of the European currency was the price for German
unification, I think that would have many
negative aspects in Germany. And it is not realistic. We discussed a common currency
in Europe always in the ’60s. There was the Werner plan, called after Prime Minister from Luxembourg. In ’79, Helmut Schmidt and
Jessica des Carre created a European currency system,
not a currency but a system, and it was, I think, a predecessor of a common currency in Europe, and the decision to take the
opportunity was, I think, idea from Helmut Kohl, he
was a European of his time. And as a topic at the– – The summit. – The summit, of course. The summit in Hannover,
they decided that the Delors Commission and participated
from the Central Bank president should make a proposal. And they did and the proposal was on our table in March, ’89. Then we decided that the
first step for liberalization for financial markets should be in ’90, and that was before any
step, before any chance of German reunification could come on. Both things are linked, but
the decision for the currency for the European currency,
was before, and we did not interrupt this process, as
that was very important, but nobody in ’89 could say,
we will be able in ten years ten years later, to create a currency. Nobody could say that. We had the will, we had
willingness to do that, but nobody could promise
because we had three elections from ’89 to ’98, three elections, and of course, the majority could change. It could be possible that the opposition side would reject such a plan, and therefore there is a combination, but it was not the
condition, and that is right and you can be sure, Helmut
Kohl has the same opinion, Hans-Deitrich Genscher, and
I for me can also tell you that is the right story
between reunification and the common currency. – Can I add just a little bit on this, because particularly when
we do this at universities, maybe there’s an insight
for some of the students. Like you, at the time,
I had somewhat suspected Mitterrand sort of took
his price for unification, but I went back and did the
research, some of which you heard today, and I came to the
conclusion that I was wrong. If you go back and you
look at the reports, this was a building process,
but there was a very strong German interest in the Euro,
and this is coming back to the point about, when
Germany agreed to the Euro it wasn’t all generosity and spirit. Fred Bergsten has written a piece called “Helmut schmidt’s Revenge,”
and what he’s referring to is the fact that Helmut
Schmidt, who was also a strong Finance Minister, before then-Chancellor, used to get extremely
frustrated when you had this general process where Germany
would build a current accounts surplus, the Deutschmark
would appreciate, and then the US dollar, which at
that point was weaker, would come in as a wedge
between the Deutschmark and other European currencies. And this frankly wreaked
havoc on inter-European trade. So if you believed in the
goal of European integration and trade and interconnectivity,
it was natural to try to think about having a common
currwncy and avoid that. Now people can debate whether
there are other things that should have been done,
or rules and other pieces, but I, on researching this,
came to the same conclusion that Dr. Waigel did and
obviously, did Kohl decide perhaps this is a point to give it a push, to show sympathy with
Europe, I don’t think, that would be a controversial
debatable point, but just to give you one other
historical anecdote on this, and the archives have
revealed this, early on in the process after the
Berlin Wall came down, Francois Mitterrand had
a meeting with Gorbachev. And when you look at the
notes of the meeting, you can really see that Mitterrand
is testing with Gorbachev whether maybe France and
the Soviet Union and Britain can stop this thing, and
it’s quite interesting in the context of the other
things we talked about because Gorbachev reacts very poorly. But the reason he reacts
poorly is he thinks that the French are setting
him up, and he’s thinking, “Ah, am I being set up as the
bad guy, and I have to decide, “Will I side with Germany
and the United States, “or France and Britain?” And he said “I think I’m gonna side “with Germany and the United States, So after that point, Mitterrand, you see this in the diplomacy, he changes. He’s a little quicker than
Thatcher is to come to the mood. – I only make one remark in German. (speaks German) – As one can read in the
protocols, and Mr. Gorbachev told me himself, Francois
Mitterrand and Maggie Thatcher visited him personally and they certainly were not enthusiastic
about German reunification. At least they wanted to delay
the process of reunification, and Margaret Thatcher said
that she loved two Germanys much better than one reunited Germany. Mitterrand and his most
important man, advisor, Attely, then started to create
the legend, as though they had been instrumental
in the implementation of the introduction of the Euro, but I can say to you that they weren’t. There was a process of
earlier decisions between 1989 and 1998 that took
place, and the introduction of the Euro depended also
on both France and Germany meeting the 3% Maastricht
criterion, and I would not have agreed to the introduction of the Euro if that had not been met by Germany. – Question, there is a
mic in the middle, but you can also shout, I suppose. (audience member speaking quietly) – Good evening, gentlemen. My name is Dinas Buttners,
I’m a dual degree. I’m a SFS and MBA student
here at Georgetown. Thank you for your presence and thank you for attending here tonight. My question is not so much
with the professionals in the room, but the young professionals and the young and up-and-comers. There are many distinguished
people with us tonight, but there’s also many students
and many rising professionals. You gentlemen were on the cusp of history, with reunification and
with history looking at what your actions would say or do. Looking back prior to
reunification, what personal, professional and developmental experiences most prepared you for that
historical opportunity that you had for German reunification? Thank you for the question. – (speaking German) – I can only say to you
that even as a young person, I always believed in the
opportunity of reunification, but I did not know when it might happen. But it is always important to be prepared for such an event that might happen. Helmut Kohl had a natural
affection for people, for human beings, and he
was able to bring to bear that affection also on
what he did in politics. I was only 18 years old when
the Treaty of Rome was signed, this has been a long time ago. Now I’m 76 years old, and I
can say now with that affection that 90% of my expectations
actually have been fulfilled. I can only hope that the
next generations will also think like that and will
continue to bear responsibility for development in Germany and in Europe. I am confident that they will do that. Henry Kissinger once said, “I
do not know how Europe does it “but I know that they will do it.” We were able to resolve the problems with Ireland, Portugal and
Spain, as far as the crisis in the Eurozone was
concerned, and I’m confident that Greece will be resolved,
although let me add here, I was actually against
Greece joining the Eurozone. – One remark. When I was a younger man … (switches to speaking German) – I was a young man in the 50s. My father had lived through
two world wars, and I lost my only brother, he fell in World War. My grandparents experienced three wars. My father, after returning from
war, was deeply disappointed and became a radical pacifist. Franz Josef Strauss,
who was my predecessor as the head of the CSU,
the Christian Social Union party of Germany, said
that we have to be prepared for change and we have to be
prepared to fight for liberty in a partnership between western
Europe and United States. And at that point in time
I decided in favor of Franz Josef Strauss and against my dad. – I’ll make four observations. This is obviously a topic
that can go for a while, I’ll try to keep it brief. First as you might have
drawn the conclusion from my remarks, I think having
a very good grounding in history is very important. Mark Twain said, “History
doesn’t repeat itself “but sometimes it rhymes.” But the real point about
history is that it gives you perspectives, questions, understandings. Henry, I was a graduate
of the Kennedy School and the law school up at
Harvard and I do things at the Kennedy School, and
Henry Kissinger once came there and said, “The two most
important traits for a “public official are a knowledge
of history and philosophy,” and the professors all
looked around because they didn’t teach either. One of the professors there
now, Graham Allison, and I actually have an applied
history process he’s bringing, something I would suggest for Georgetown. How you use historical
cases and learn from them. However, I realized I probably
couldn’t make a living from history, so I had
to do this other stuff, but it’s always a good run. And particularly for Americans,
since a lot of Americans are in this audience, it’s
probably changed now to a degree, I don’t know the state of
schooling, but most people around the world don’t think
the United States or Americans know anything about their
history or culture or others, and if you know a little bit
and you can ask questions, boy, it goes a long
way, so it’s worthwhile. The second, obviously, in
addition to the grounding, you want to have some competencies. So there’s lots of different ones. In my case it was sort of a
combination of law and economics and finance and management and
public policy and governance. You’ve gotta be good at what
you’re gonna do if people are going to want you,
when you get a moment, to contribute to it. Third, another element on
top of the technical parts. I came up more on what we’ll
call the technocratic side, but if you’re gonna be effective
in a democratic society, you’re gonna have to understand politics. It doesn’t mean you have
to be a politician, but you have to understand the
Constitutional political process. You have to understand
how to get things done. So I’ve referenced Secretary Baker. Secretary Baker was a master,
internationally as well as domestically, because
he understood politics. And part of this is
understanding the democracy, how you develop power, wield
compromises, other things, and if you just harken back to my remarks, think about some of the points
where I was talking about public attitude, shaping
public opinion, understanding some of the German public opinion. It gives you a perception,
and while it’s frustrating for people trained in the technical arts, like many at Georgetown or
me, if you want to make a difference, you have to learn
how to wwork in that system. And what is not appreciated
as well as it should be is the diplomatic art is often politics. It’s negotiation, it’s understanding the other person’s position. Baker’s memoir is “The
Politics of Diplomacy,” and there’s a lot of similarities to this. And the fourth and last part is that … This is the difficult part,
but if you’re interested in the world of policy or politics, you have to make calculated risks. I’m sure that Dr. Waigel
did this in his career. There’s moments where the
opportunity presides itself and you have to decide
when you’re gonna seize it. It’s a little bit like my Bismark quote about fate moving past. So I went to Harvard law
school, I clerked on a court, I w3as in a law firm,
a lot of my colleagues just stayed in law
practice and that’s fine. And I had to make some decisions
around running some risks at varioous points, about doing something. And I think that’s, you
don’t want to be foolish but if you’re gonna make a
career in diplomacy or politics or others, at some
point you have to decide when the opportunity presents itself, and that leads to the last
one, which particularly younger people never think of but it’s probably the most important. You probably think your boss picks you. The most important thing
to do is pick your boss. Because you learn a lot from
the boss, it doesn’t mean that you necessarily agree
or share all the views. But what you learn from
the boss is very important. In my case, I was very
fortunate throughout my career, but again, you know, one person said, “Luck is the residue of design.” And so part of the point is
that I partly picked my jobs from people I could learn from. From different sort of traits,
whether they’re Republicans or Democrats, or people
that knew kind of the arts of Washington, and in my case,
you see, I was very lucky working with Secretary Baker, and just to put this in context, I’m a
little younger than Dr. Waigel, but to give you the unusual
nature of how this can happen and this good fortune, it’s
not just me, but when I was working on German unification,
I was 36 years old So I had a boss that
decided I could do this. Unfortunately his attitude
was, whatever I had done before I had to keep doing ’til
I could add new ones. But nevertheless, he didn’t
care what your background was, he cared if you performed,
and he was there to produce and do that. Coming back a little bit
to Dr. Anderson’s question, to put this in a European
context, he was joking and saying is he a Cassandra, and I was
gonna say, you can’t be a Cassandra ’cause Cassandra’s
the one who warns, and the way he’s describing,
it’s already here, it’s not a warning. But I look upon Europe today and I think, “Oh, what an exciting opportunity here.” The process never ends, the
world never settles down, and so I think for Europe now,
there’s gonna be a challenge of, not even talking
about the neighborhood but talk about the
internal parts of Europe. Obviously, with the deeper
Eurozone, you have to decide, do you deepen the Eurozone
further, are there different ways to do that? That now creates an issue
for Europe that didn’t exist 20 or 30 years ago when the idea was, it’ll be an ever-closer union. What do you do with the
non-Eurozone countries in the European Union? Not just Britain but Sweden
and Denmark and others, and they’ll have to be a
device for that going forward. How do you think now
about the relationship with what we’ll call
the eastern border here, with Ukraine and other areas
with Russia’s behavior? How will Europe not only deal
then with the economic issues but how will it deal with
the demographic issues>And this is the question
partly, you said, of refugees. So to link this back to
my point about US-German and strategic relationship,
ideally the United States actually should be a good
partner in a cooperation on this, on some of these issues like
turmoil in the Middle East, you’re never gonna deal
with the refugees unless you deal with the underlying
problems at some point. Im not sure the US can do it, but you’re not gonna do it without the US. And that’s the sort of
effort, and where frankly I also think even on some
of the internal issues. Keep in mind, the Marshall Plan, the NATO, United States was one of the deep movers of European integration in the late ’40s. So frankly I think this
is oen of the things where there are ways, we could talk about T-tip and others for economic
reforms, and of course I wouldn’t do the United
States marching in and telling Europeans what to do, remember what George Marshall
did, George Marshall said. “You have to come up with your own ideas,” and that was in ’47. A good way to start
would be a quiet dialogue with the Germans and share some ideas on some of these topics and
say “Here’s what we see “on the agenda, what do you see and “how are you planning to deal with it?” It comes back also to this point I made about strategic frameworks. Anybody who’s been in public
service will tell you, the immediate is pressing and
it drives out the strategic. And so it’s not a reason
to blame somebody, but most public officials frankly
don’t have time to be thinking about strategic frameworks,
you almost have to push it, so part of the dialogue
is to push both sides to try to think about
some of these issues. So the remarks I made
actually have a resonance to go back to your question. – I’ve been doing this for
fifteen years and I can tell you it’s not often that one
gets to end on answers that are articulate, sincere,
thoughtful and uplifting, snd I think we’ve heard two such answers, so I’m gonna call it a
day, for their benefit as well, they’ve been
working hard up here. Please join me in thanking Dr. Theo Waigel and Dr. Robert Zoellick. (applause)

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