OSTOPOLITIK BERLIN AND THE PROSPECTS FOR PANKOW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R002000110025-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 21, 2016
• Document Release Date: April 28, 2006
• Sequence Number: 25
• Publication Date: August 29, 1998
• Content Type: MEMO

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Secret
MEMORANDUM
OFFICE OF
NATIONAL ESTIMATES
Ostpolitik, Berlin, and the Prospects for Pankow
MORI
review(s)
completed.
Secret
31 August 1971
Copy No.
81
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31 August 1971
SUBJECT: Ostpolitik, Berlin, and the Prospects for Pankow
CONTENTS
Page
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Nature of Pankow's Problems with Detente . . . . . . 2
Problems at Home . 6
East German Efforts to Rebuff Ostpolitik . . . . . . . . 9
The Outlook Under Honecker . . . . . . . . . . . . . . . 16
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C E N T R A L I N T E L L I G E N C E A G E N C Y
OFFICE OF NATIONAL ESTIMATES
31 August 1971
SUBJECT: Ostpolitik, Berlin, and the Prospects for Pankow*
SUMMARY
With the Four Power agreement concluding the first phase
of the Berlin negotiations, the East German government will
now take up an active role in the next phase. There will be
heavy pressure on that regime, recently under new leadership,
to adopt a forthcoming attitude in working out a new relation-
ship with Bonn. Erich Honecker, were he free to choose,
might prefer to continue along the inflexible course charted
by Ulbricht, but the Soviet urge toward detente with Western
Europe does not allow him that luxury. Honecker can be
expected to move cautiously in adjusting East German policies;
even so, the changes he makes are likely to complicate certain
of the GDR's internal problems, economic as well as political.
Over time, developments in East Germany may well cause concern
in Moscow as well as in Pankow, raising anew the question of
whether the Soviet Union's twin objectives in Europe -- the
consolidation of its hegemony in the East and the expansion
of its influence in the West -- are in fact compatible.
This memorandum was prepared by the Office of National
Estimates and coordinated within CIA.
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1. Erich Honecker has assumed power at a pivotal point
for East Germany. He must not only reinvigorate a troubled
domestic economy but must also cope with the delicate problems
generated for Pankow by Brandt's Ostpolitik, the USSR's West-
politik, the Four Power agreement on. Berlin and the various
other factors working for political and economic change in
Europe. His freedom of action will be limited -- as Ulbricht's
was -- by considerations stemming from the GDR's geographic
location and its status as a rump state dependent on the USSR
for its very existence. Beyond this, Honecker will probably
have appreciably less maneuvering room than Ulbricht had,
for the Soviets have now clearly signalled that they expect
Pankow to move in the direction they have set toward detente
with Western Europe and more specifically, that they expect
2arkow to show some flexibility in t-.e inter-German phase
of the negotiation on Berlin.
The Nature of Pankow's Problems with Detente
2. Most of Pankow's East European allies clearly
welcome the trend toward a reduction of tensions in Europe.
But for the East Germans -- now as in the past -- a critical
element in any movement toward East-West detente is its
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effect on Bonn's regional position and influence. For Pankow
the gut issue is survival. The internal foundations of East
German statehood are still weak, or at least are thought to
be so by the regime.
It was Ulbricht's policy to keep West Germany at
arm's length, holding political and social contacts to a
minimum and confining economic ties to the profitable and
expanding exchange conducted within the framework of the
Interzonal Trade arrangement (IZT). Ulbricht clearly wished
no change in these circumstances - at least until such time
as he could confront Bonn from a more secure base. For
Ulbricht that meant that there should be no real movement
in inter-German relations until living standards in East
Germany had approached those in West Germany, a distinct
East German sense of national identity had developed, and
East German sovereignty had been accorded widespread de jure
recognition. Honecker, long a ranking member of Ulbricht's
policy-making team, appears to share this point of view.
And, like Ulbricht, he recognizes that fulfillment of these
prerequisites -- or at least of the first two -- remains at
best a very long term proposition.
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4. The efficacy of Pankow's policy toward West Germany
has depended on both Soviet support and the cooperation of
the other East European countries. Ulbricht certainly had
moments of concern, but until late 1968 he was generally
successful in persuading his Warsaw Pact allies to go along
with his views of how Bonn should be handled. In essence,
the policy he urged on Moscow involved managing East-West
relations in such a manner as to contribute to the political
isolation of West Germany -- both from the East and from its
Western neighbors.
5. But the Brezhnev regime's motives in seeking to
relax tensions in Europe were from the first too broad and
complex to mesh easily with Ulbricht's parochial purposes.
By the spring of 1969, those leaders in the Kremlin who
favored a more active and forthcoming European policy could
cite an impressive array of arguments -- including increased
tensions on the Sino-Soviet border and disturbing evidence
of renewed progress toward Common Market integration and
expansion -- to support their case. In any event. the
"appeal" adopted at the Warsaw Pact meeting in Budapest in
March 1969 -- with its call for a European Security Confer-
ence and its noticeably mild treatment of West Germany --
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set the stage for renewed emphasis on detente. Gomulka's
Soviet-endorsed offer to negotiate a border settlement with
West Germany two months latter contributed to this atmosphere
(and clearly miffed the East Germans).* Even so, little
inovernent was recorded in East-West relations until the fall
when, as the result of the West German elections of September
1969, Brandt took over in Bonn. Sir. 2e then, changes and.
trends affecting East-West relations in Europe have been
particularly disconcerting for the East Germans.
6. Pankow has recognizel that Brandt's vigorous
pursuit of a more forthcoming and flexible Ostpolitik
places the realization of some of the GDR's key objectives
-- e.g., broad international recognition -- within grasp.
Relations between Warsaw and Pankow (and between Gomulka
and Vlbricht personally) were already at a low ebb.
Long something less than cordial, they had deteriorated
further in 1967 and 1968 as considerations of national
interest widened differences over a number of economic,
foreign policy, and domestic issues. Thus, when Gomulka
made his bid to Bonn for better relations in May of 1969,
the East Germans apparently felt free to convey their
reservations to Warsaw in fairly blunt terms. In ad-
dition, Pankow is reported to have tried to persuade
the Poles to include a demand for West German recognition
of the GDR's sovereignty and western border in their
negotiating position vis-a-vis Bonn.
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But the East German leaders have remained at least as
anxious as ever to preserve those bloc barriers which have
served to protect their subjects and their East European
markets against the penetration of West German influence.
And in Pankow's view Brandt's Ostpolitik and the Kremlin's
new Westpolitik now seem to be converging and to be pushing
the normalization of Bonn's relations with the East much
too fast and too far.
Problems at Home
The enthusiastic popular reception accorded Brandt
during his visit to Erfurt last year served to heighten
Pankow's concern. But this was not the only disturbing in-
ternal development in 1970. East German economic performance
-- a key factor in Pankow's campaign to strengthen its posi-
tion vis-a-vis Bonn (not to mention its position vis-a-vis
its Warsaw Pact allies) -- slipped noticeably. In part this
was due to the effects of two or three years of adverse
weather. But the basic problems stemmed from the fact that
Pankow had once again overextended itself in its drive for
a higher rate of economic growth. The distruptive impact of
its forced draft approach to development was magnified by
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the shortages and imbalances F -.crated by deliberate concen-
tration on a few selected branches of industry (the so-called
"structure-determining" industries, such as petrochemicals
and electronics). While the overall economic balance sheet
was far from disastrous, the implications were sufficiently
alarming -- even before the lessons of the December disorders
in Poland -- to prompt an undoubtedly reluctant Ulbricht
to forswear his former policies and to endorse a. return to
a more modest and balanced course.*
Signs that East Germany's self-styled "econ'.rnic miracle"
might be in trouble appeared in 1969. By mid-1970
foreign trade deficits and domestic shortages had be-
come serious, the backlog of unfinished investment
was growing rapidly, and there were increasing signs
of worker and consumer dissatisfaction. A reappraisal
of the GDR's approach to economic development began in
earnest in September 1970. Official year-end statistics
for 1970 confirmed that performance had fallen short
of expectations in a number of key areas. For example,
in contrast with 1966-1968 when less ambitious goals
were generally me, or exceeded, figures for 1970 re-
vealed that industrial production had risen by 6 per-
cent instead of 8 percent as planned, worker productivity
by 5 percent instead of over 9 percent, and investment
by 7 percent instead of 11.4 percent. Pankow's problems
were compounded by the fact that winter had brought
even more than its usual share of extra shortages and
bottlenecks -- necessitating the calling out of 8,000
additional workers (including 2,300 GDR and Soviet
soldiers) to keep fuel supplies moving.
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I I
8. But readjustment of the economy will take time;
tangible improvements may not be visible for a year or two.
In the meantime, the gap between economic conditions in
East and West Germany is likely to widen further and to
complicate the GDR's problems with Bonn's Ostpolitik.*
This is particularly true in relation to consumption
figures where, in sharp contrast to East German prospects,
West Germany's rate of growth in 1971 has been unofficially
projected at over 5 percent.
It has been estimated that East German living standards
presently lag 35-40 percent behind those in West Germany
and that the gap has, if anything, been increasing
during the past year or two. East German planners
have found popular satisfaction a particularly elusive
goal. For example, due in part to overtime and extra
shift work, personal income grew faster than planned
in 1970. But far from generating a heightened sense
of well-being, the extra money in the hands of the
population served to increase discontent with short-
ages of meat, butter, clothing, consumer durables,
and fuel. Thus, with the Polish disorders firmly in
mind, Pankow took a number of relatively expensive
steps to mollify the population -- such as authorizing
payment of year-end bonuses not earned on the basis of
economic performance and decreeing price reductions rn
certain consumer goods. It also made much of consumer
and worker welfare in the new five-year plan.
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East German Efforts to Rebuff Ostpolitik
9. The East Germans have for some time fought a
delaying battle against Ostpolitik -- arguing their case
in Warsaw Pact councils and dragging their feet as much as
possible with respect to moves which would remove various
obstacles to the improvement to inter-German relations
or which would facilitate even a limited Berlin settle-
ment. For example, on 5 November 1970 -- the day after
the ambassadors of the Four Powers announced for the first
time that some progress had been made in their negotiations
an Berlin -- East German spokesmen launched avigorous
campaign to publicize Pankow's especially hardline for-
mulations on the status of West Berlin and the movement of
goods and persons across East German territory. A few
days later, Ulbricht seemed to expand the GDR's demands
by preconditioning the commencement of bilateral nego-
tiations with Bonn on the cessation of "any activity of
other states" in West Berlin which "contradicts the inter-
national status" of that city or which "violates the interests
of the GDR and of the other socialist states". Previously,
Pankow had only insisted on the halting of "illegal"
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West German activities in Berlin. Thus, Ulbricht's state-
ment, which he claimed was carefully formulated, can be
seen as an attempt to complicate the Four Power negoti-
ations by raising a new challenge to the rights and ac-
tivities of the Western allies. But Pankow was clearly
out of step with Moscow, and on 2 December, at a hastily-
convened Warsaw Pact summit meeting in East Berlin, the GDR
was persuaded to adopt a more moderate posture.
10. In the propaganda field, the East Germans have
developed two basic themes tailored to limit the impact
of West German influence. The first of these, aimed at
minimizing the internally disruptive effect of any FRG-
GDR dialogue or agreements, combines rejection of the
concept of "inner-German"relations with the thesis that
a process of further "demarcation" (Abgrenzung) of the
two Germanies -- as opposed to convergence or rapprochement
-- is taking place. The thrust of this argument is that
under the influence of totally different and mutually
antagonistic social systems, the two Germanies are drifting
farther apart in every possible way.
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11. The second and related theme, intended to educate
East Germany's population and allies alike, concerns the
subversive aims of Brandt's Social Democrats. In deference
to the Soviets, who are now generally careful to focus their
criticism of West German developments on the activities of
so-called "revanchist" elements, the East Germans do make
reference from time to time to the existence of potentially
progressive trends and forces in the FRG. But, roughly
speaking, where Moscow conveys a guarded sense of hope
concerning the Brandt regime, Pankow expresses alarm.
The East German leaders are afraid that Brandt and the
Social Democrats will be able to seduce the East German
people and deceive the Soviet leadership. And it is in
Pankow's generally harsh treatment of social democracy
-- including, on occasion, attacks. on Brandt himself --
that the GDR leadership has departed most obviously and
most frequently from the Moscow line.
12. When Ulbricht stepped down from his Party post last
May, he could look back with mixed feelin;s on his record in
blunting the perils of Brandt's Ostpolitik. There had been
some concessions on the East German side. Deprived of bloc
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support for its goal of full West German diplomatic recogni-
tion, Pankow was forced to accept a less satisfying formula
calling for the establishment of "equal relations" between the
two Germanies "on the basis of generally valid principles of
international law". And by indicating his "consent" to Polish
plans for diplomatic relations with West Germany, Ulbricht
conceded that even this watered-down objective is not a pre-
requisite for the normalization of Bonn's bilateral relations
with other members of the Warsaw Pact. Beyond this, the East
Germans were persuaded to resume their own bilateral talks
with Bonn and to disavow some of their previously stated pre-
conditions for substantive negotiations -- such as the demand
cited earlier concerning cessation of the FRG's "illegal"
activities in West Berlin.
13. The East German concessions have been offset to some
degree by the steady improvement of Pankow's international
standing. is late as April 1969, only 13 states -- all
Communist -- accorded East Germany de ure recognition. In
the following month, Iraq and Cambodia became the first non-
Communist states to establish full diplomatic relations with
the GDR. By mid-1971, 15 other non-Communist states in Africa,
Asia, and Latin America had followed suit. Beyond this, the
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East Germans now claim to maintain various kinds of official
consular or ?;rade relations with another 31 countries. And
the West's experience at the ECE environmental meeting in
Prague last spring indicates that Moscow now intends to render
somewhat more vigorous and consistent support to East German
efforts to exploit their diplomatic gains for the purpose
of winning membership in various UN-affiliated organizations
(and, eventually, in the UN itself). Indeed, even if the
Western powers do not decide to modify their opposition,
it seems likely that the GDR will gain membership in one or
more UN-affiliated organizations within the next 12 to 18
months.
14. But whatever the balance of gains and losses, the
strategy pursued by Ulbricht cannot be extended as a long-
term prescription for meeting the problems created for the
GDR by the easing of East-West tensions in Europe. First of
all,, the strategy's effectiveness had depended to no small
degree on Ulbricht's internal and international stature as
a veteran Communist leader and on his personal political
skills. These attributes had served over the years to in-
crease the GDR's influence in Moscow. They had also helped
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to contain and control disputes and factionalism within the
Eaat German leadership. But what worked for Ulbricht then is
hardly feasible for Honecker new.
15. Information as to the attitudes and alignments of
various East German leaders is fragmentary and frequently of
dubious reliability. It would appear, however, that while
there is broad agreement on the fundamental considerations
which underlay Ulbricht's response to Ostpolitik, some dif-
ferences exist. It would also appear that Ulbricht had been
steering something of a middle course between the lines of
action favored by some of his more unbending lieutenants
on the one hand and by an allegedly pragmatic group of
government and Party leaders on the ot'ier. Honecker's name
has generally been associated with the hardline. grouping
-- which is said to favor a rigid and aggressive approach
to countering Bonn's Ostpolitik. In contrast, the prag-
matists reportedly are skeptical of Pankow's ability to stem
the trend toward improvement of East-West relations and
fearful of the economic consequences for East Germany if it
is left behind in this process. As a result, they are said
to be inclined toward a relatively forthcoming approach to
inter-German problems.
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a-L' -1.i-11 'L' -.L
16. Be that as it may, the GDR's "solutions" to the
problems raised by Ostpolitik may raise more potcrtially
divisive questions than they resolve. For example, East
German emphasis on the need for greater bloc political.
integration -- which Pankow conceives as a means of achieving
greater security for the GDR -- may be difficult to reconcile
with the program to develop a form of East German nationalism
and with the related need to secure the full trappings of
independent statehood. Similarily, the GDR's efforts to bind
its economy more closely to that of the Soviet Union --
thought to be a way to protect East Germany from growing
Western and West German competition in bloc countries --
would seem likely to dim prospects for the type of economic
modernization which would be required to make East German
products competitive on the world market. Finally, emphasis
on the GDR's sovereign status ar.d the concept of Abgrenzung
risks losing the advantages -- including access to the Common
Market -- derived from the IZT arrangement. About 10 per-
cent of the GDR's foreign trade is currently conducted with
the FRG and East German staff economists have estimated that
loss of IZT benefits would cost Pankow about $137 million a
year in terms of trade alone.
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The Outlook Under Honecker
17. Honecker has so far made no great effort to project
a "new broom" image. On the contrary, the emphasis has been
on continuity, both of personnel and of policy. In part,
of course, this has been eyewash -- part of the careful stage-
managing calculated to make the transition period as painless
as possible and to demonstrate to both internal and external
audiences that (in contrast to what happened in Poland)
Ulbricht's retirement was a routine development.
18. But the continuity theme has some substance as well.
Although Honecker has on occasion shown signs of being less
tolerant of innovation than Ulbricht was, it would appear that
he has no serious quarrel with the basic thrust of the poli-
cies he inherited. If anything, he has placed even greater
stress on the Abgrenzung theme. Similarly, he has given no
indication that he intends to moderate Pankow's campaign
against the twin evils of social democracy and West German
"imperialism". And on the home front, the chances that
Honecker might attempt to allay potential popular unrest
through a genuine relaxation of internal controls seem des-
tined to remain virtually nil for a long time to come.
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19. Nevertheless, there have been some subtle changes
in Pankow's posture and tactics. Honecker probably realizes
that Ulbricht could get away with many things which he --
for the present, at least -- cannot. Of necessity, then,
teamwork now figures more prominently in the GDR regime's
approach to internal and intra-Bloc affairs than in the past.
This is reflected in Honecker's stress on collective leadership,
in the GDR's more cooperative attitude regarding CEMA inte-
gration efforts, in the current absence of East German claims
about having developed an advanced system of socialism, and
in Pankow's more amiable policy toward Poland.
20. And where the Berlin Agreement is concerned, Pankow
has evidently bowed to the inevitable. (Ulbricht would prob-
ably have had to do the same, but there might have been some
bitter-end resistance; as it was, Gromyko seems to have se-
cured Honecker's approval for the agree?lent fairly quickly
and relatively painlessly on a flying visit to Pankow just
before the four Ambassadors finished their work.) The GDR
has now publicly and effusively declared its satisfaction
with the terms and gratitude to the USSR for achieving them.
In fact, as evidenced by his remarks to a Neues Deutschland
interviewer on 27 August, Honecker apparently intends to ward
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off any potentially destabilizing reactions to the terms of
the tentative agreement as they become known by portraying
the agreement as a victory for Soviet and East German
efforts to ease East-West tension;; and to strengthen East
German sovereignty and territorial integrity. Of course,
Pankow may be expected to take tough, and even obstructionist,
positions on some matters during the course of the impending
inter-German negotiations. But, in the end, the East Germans
will follow the course which the Soviets have laid out for
them.
21. In any case, the development of closer bloc relations
with West Germany and other changes in the overall European
environmen -- changes which could conceivably include an
agreement on mutual and balanced reduction of forces (MBFR)
in Central Europe -- will pose further difficult tests for
Honecker. He can be expected to move with considerable cau-
tion in adjusting his course. Even so, the unique forces
which bear upon the East German scene suggest that the process
of change could take some unexpected -- and from Moscow's
point of view, disturbing -- turns.
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22. In a detente environment, Pankow is likely to be
more preoccupied than ever with the closely interrelated
issues of economic progress and state-building. In both
fields local requirements will argue in favor of moves
which could cause strains between the GDR and its Warsaw
Pact allies. For example, Honecker will probably feel con-
strained to continua; to try to develop a sense of separate
national identity among the East German population. But
any effort to manipulate nationalistic sentiment in Communist
East Europe holds certain perils -- an6 this is particularly
true in the GDR.
23. Honecker is hardly a potential Ceausescu. But
freed of Ulbricht's shadow and faced with the responsibilities
of his new office, he could move in ways not suggested by his
past behavior. For example, the GDR's economic problems could
prompt Honecker to adopt a more innovative approach to reform
and to take a more independent posture in dealings with both
East and West. In such circumstances East German nationalistic
stirrings could gradually assume a more clearly anti-Soviet
coloration or take on a pan-German character. Indeed, some of
Pankow's allies have already grumbled that the emphasis in what
they consider to be an emerging spirit of East Gtrmar, nationalism
seems to fall on the word "German".
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24. There are other contingencies which the Soviets must
consider. For example, since it is likely that worker and
consumer discontent in the GDR will remain relatively high
for some time to come, there will be a possibility of dis-
orders. Similarly, factionalism in the East German party
could become unmanageable. It must be assumed that Moscow's
stake in the GDR is so high that the Soviets would respond:,.,
promptly -- with military force if necessary -- to any clear
evidence that things were getting out of hand. In such an
event, there would seem to be no question that the Kremlin
could control and correct the situation. But the very need
to take forceful action would raise anew the question of
whether Moscow's twin objectives in Europe -- the consoli-
dation of its hegemony in the East and the expansion of
Soviet influence in the West through a policy of detente
-- are compatible.
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