In accordance with the unification agreement, as a matter of principle all property confiscated by the former GDR after 1949 must be restituted. Why is this so? The answer is obvious: from 1949 until the construction of the Wall in 1961, as many as 2.6 to 2.7 million Germans fled from the former GDR to the west, leaving their property, in particular their real estate property behind.  If one were to include children born after the escape to the west, the total number of people is 3.1 million. Furthermore, after 1949, large portions of the population of the former GDR were robbed as the result of expropriation measures. No government with an interest in being reelected could have taken the risk to let these confiscations and expropriations, untenable in a state of law, stand as "legally valid and final.".

In accordance with the unification agreement, property expropriated for political reasons during the Nazi era also must be returned, even though this time period is much further in the past than the period of expulsion and expropriation of members of the middle class declared to be enemies of the working class and persecuted as such in the years 1945 to 1949 in the Soviet Occupation Zone. Why  is this so? The unification agreement legally depended on the approval of federal states ruled by the SPD party in the Federal Council [Bundesrat], and the SPD party had its treasurer Klose make a public statement to the effect that the party would not approve the unification agreement without restitution of property expropriated from the unions and the SPD after its destruction by the Nazis in 1933. Furthermore, the federal government was in no doubt about the fact that it would be politically untenable for the state to retain Jewish property confiscated in that time.

This left unresolved what was to happen with property confiscated from members of the middle class declared to be enemies of the working class and persecuted for that reason in the Soviet Occupation Zone from 1945 to 1949.

In this period, expropriated parties included not only estate owners with properties of more than 100 hectares and middle-class entrepreneurs, but also big industry, banks and department store conglomerates. Only this latter group represented a powerful entity in both the old and the new Federal Republic of Germany, expanded by the new federal states. Therefore, it was necessary to establish in political terms what the position of big industry would be with regard to the question

Manuscript of a presentation to the Hans-Seidel-Stiftung (July 13, 1999).

of restitution of their operations confiscated between 1945 to 1949. The federal government had a political interest in having big industry take over and renovate these confiscated operations, preferring to place the responsibility for such initiatives outside the realm of activities by the state.

The reaction of big industry was guarded from the beginning. It was a known fact that practically none of the GDR operations were producing products that were marketable in western markets. Production plants were mostly ready for the scrap heap. Further, it was found that the productivity of industrial enterprises of the former GDR generally was at most one quarter of the productivity of western enterprises. In plain language that meant that three out of four workers would have to be dismissed. Economic calculations and cost analyses in the entire area of production industry further showed that it would be more advantageous for industrial enterprises to refrain from investing in production plants in the new states for the time being and instead to step up existing production capacities in the west and to market the surplus in the east. I am speaking from personal experience in this regard; at that time I was a member of an advisory board of a company, which was deliberating about these considerations as did many others. For productive enterprises with capacity reserves the economic logic of such a perspective is compelling. Since fixed costs remain constant and stepping up production only increases variable costs, it is possible to produce at little cost up to the point of exhausting the plant's operation at full capacity. As the result of these deliberations, speaker of the board of Bayer-Leverkusen, Professor Dr. Strenger announced tersely that the chemical industry would not raise any restitution claims; he added a somewhat inelegant comment to the effect that accordingly the industry was also not obligated in any way.

These were the basic political terms, when the federal government together with the government of the former GDR arrived at the agreement to refrain from reversing the confiscations enacted on the basis of the sovereignty and jurisdiction of the occupation from 1945 to 1949.

Six years ago, in a presentation to members of the International Chamber of Commerce, based on the facts known at that time, I expressed my suspicion that the federal government had intentionally sought to obtain the property of victims of the Stalinist class warfare in the Soviet Occupation Zone, because they hoped thereby to finance the costs of reunification. In the light of current evidence my suspicion from that time can no longer be dismissed as unsound.

I want to describe briefly how it was brought about that confiscations undertaken in the years 1945 to 1949 in the Soviet Occupation Zone were codified in such a way that the property expropriated from the victims of Stalinist persecution remained in the hands of the state.

First of all, the discussion was narrowed to a focus on the so-called land reform during the Soviet occupation. This provided the opportunity to demonstrate that it merely was a matter of restitution of large estates of the "Junkers" or landed gentry. This in turn facilitated the political argument that the property should not be returned to this "reactionary" group of individuals. Public opinion to the extent that it was published in the media appeared to accept this narrowed perspective.

 The focus of the discussion on expropriated large landowners resulted in irritation among small  landowners in the west, who had no interest either in restitution or the creation as well as  maintenance of productive agricultural enterprises in the east. On the other side, there was a  relatively small group of persons affected by the land reform, consisting entirely of refugees and  people without property-and hence without any political influence. Given this state of affairs  the only remaining question was how the planned seizure could be safeguarded in terms of  constitutional law.

II.  The creation of constitutional law prerequisites for the seizure by the Federal Republic of          

      Germany  of the property of victims of the Communist class warfare in the Soviet

      Occupation Zone

Given the unlawfulness of arbitrary rule in accordance with Section 3 GG [Constitutional Law], it was not easy in terms of constitutional law to exclude only the victims of the Communist class warfare in the Soviet Occupation Zone from those eligible for the planned restitution of unlawfully expropriated property. Admittedly the applicability of Section 3 GG can be limited by constitutional amendment. However, the unlawfulness of arbitrary rule is not only embodied in Section 3 GG, but is also a component of the principle of the constitutional state as per Section 20 GG,  and, according to the so-called perpetuity clause as per Section 79, paragraph 3 GG, this principle may not be infringed upon even by a constitutional amendment. Thus, it was necessary to determine a reason for making a differentiation. It was fortuitous that the Modrow government  wanted to hold on to the socialist triumph of the Communist confiscations in the Soviet Occupation Zone, in particular the land reform, and sought to influence the Soviet Union accordingly. The federal government had no interest in negotiating or offering a solution that would have dispelled the reservations of the Soviet Union; rather the government was interested in ensuring the seizure for fiscal reasons.

Since the French Revolution equality of all citizens has been one of the principles of a state of law; I might add, however, that the Section de Marches de Sansculottes already deviated from this on February 14, 1793 by stating that a free people did not consist of neutral citizens, rather only of brothers and enemies, and that the ideals of the Revolution could not apply to enemies. Since the federal government hardly could refer to the notion of the Sansculottes as a justification in front of the Federal Constitutional Court, it was necessary to come up with another justification of the unequal treatment. If it were possible to make a credible presentation to the Federal Constitutional Court to the effect that the USSR and the GDR had insisted on the irreversibility of confiscations in the Soviet Occupation Zone as a precondition for their respective agreement to reunification, presumably the Constitutional Court would consider this to be an objective reason for differentiation, in view of the order, given priority over constitutional law in the preamble, to bring about the unification of Germans in freedom. This was the route to be taken.

It has been demonstrated in detail in the available manuscript why today no one who expects to

 be taken seriously can claim that there truly existed such a precondition for reunification  according to which the federal government was not permitted to return property (real estate and  movable assets) of victims of Stalinist class warfare in the Soviet Occupation Zone that had  come into the hands of the state upon unification. This argument is presented below oily in  summary fashion.

 III.  The presentation of the federal government to the Federal Constitutional Court with regard to the supposed precondition

Federal Minister of Justice Kinkel and Secretary of State of the Foreign Service Kastrup told the Federal Constitutional Court that the Soviet Union had demanded the de facto irreversibility of measures in connection with the so-called land reform and had made their agreement to reunification dependent on that. The Federal Constitutional Court based its decision on this point and argued that the basic elements of the principle of equality-inviolable according to Section 79, paragraph 3 GG—had not been violated. Accordingly, the exclusion from restitution limited to confiscations undertaken during the years from 1945 to 1949 was justified on the grounds that the GDR and the Soviet Union had insisted on it and that accordingly the federal government, upon dutiful consideration, had to accept these conditions in order to bring about the unification of Germany. The statements of de Maiziere, Kinkel and Kastrup all indicated that both the GDR  and the USSR had insisted on this precondition. Under these circumstances the federal government had to assume that the opportunity to bring about Germany's unity could not be used, if these conditions were not accepted.

The federal government did not submit any documents to the Federal Constitutional Court. Mr. Kastrup was not subjected to a formal witness examination by the Federal Constitutional Court; this was supposed to protect him against subsequent criminal prosecution, as is indicated in the stay of execution decision of the Karlsruhe Regional Appeal Court.

Even at that time there was no doubt that the presentation to the Federal Constitutional Court was not the unvarnished truth. Today it can be proven that it had little connection with the truth at all. I shall explain this briefly.

1. The Two + Four agreement does not contain a condition of the Soviet Union on this issue. In the written announcement of the two German states to the four Allied Powers, the Federal Republic without a doubt did not undertake an obligation under international law to refrain from returning the property in question. A judge asked whether the declaration of intent would hinder the federal government from privatizing land transferred into the property of the state as the result of measures of the land reform by using the vehicle of the Treuhand; the answer to this question was: no. Given this state of affairs the question arises why in that case privatization-occurring with the approval of the Soviet Union—could not occur in the form of restitution to former owners, as appropriate in a state of law, to the extent that rights of third parties to such properties had not been formed (from 60% to over 85%, depending on local conditions). Already at that time the answer was obvious: the federal government wanted to sell the real estate confiscated between 1945 and 1949 and hoped to garner profits in the billions of DM as a  financial contribution to the cost of unification. Since this connection was so obvious, Prof. Dr.  Geiger, constitutional judge at that time, reproached the Constitutional Court for failing to have  the federal government prove its claim.

Another point must be added. The federal government has even sought to change the constitution in order to ensure that the confiscations as result of the Communist class warfare in the Soviet Occupation Zone would be irreversible. Nobody has ever claimed that the USSR had made  her agreement to reunification dependent on a change of the constitution. This fact alone should have been reason enough for the Court to conduct further inquiries. It is regrettable that the Constitutional Court as a result of this omission has come under the suspicion that it was willing to accept the claim of the federal government for reasons of political opportunism. Furthermore, today it is possible to prove that the president [chief justice] of the Federal Constitutional Court at that time and chairperson of the responsible I. Senate, Roman Herzog, had advised the Volkskammer [Chamber of Deputies] of the GDR to safeguard the legal basis of confiscations in the Soviet Occupation Zone between 1945 and 1949 in the constitution, even though he knew that he would soon have to participate in the deliberation about the constitutional question, which had been raised as a result of his actions. Dr. Wolf, full professor at the University of Marburg, demonstrated this in Neue Juristische Wochenschrift [law publication]. For good reason Dr. Wolfs explication of the matter was never officially refuted; after all, one can read in a dissertation, in which Dr. Quaritsch acted as dissertation adviser, that Roman Herzog himself had expressed pride about this advice given to the GDR in a colloquium at the Speyerer Verwaltungshochschule [an institute for the study of public administration], in the summer  semester of 1991. Herzog withheld his resulting embarrassment about the matter from the other members of the Senate. Furthermore, acting as chairperson he shifted the matter off the agenda at such short notice that until the oral deliberation the affected parties were not able to demonstrate the falseness of the myth of the Soviet precondition advanced by the federal government.  Today it is possible to refute the federal government's claim that the Soviet Union had made her agreement to reunification dependent on the irreversibility of Stalinist expropriations in the Soviet Occupation Zone. There is more: it can be demonstrated that the federal government had never even assumed this subjectively at any time, an argument to which the Federal Constitutional Court retreated in its second decision on April 18, 1996; in view of the objective untenableness of the federal government's claim, the court argued that it was reasonable for the federal government to assess the situation to mean that the Soviet Union wanted to impose such a condition.

Here I only want to present a few key points; in the available manuscript this is explained in greater detail.

Three pairs of discussants participated in the 2 + 4 negotiations, Gorbachev/Kohl, Shevardnadze/Genscher and Kwizinsky/Kastrup. According to information from the German Chancellor's Office, the question regarding the handling of confiscations between 1945 and 1949 was not even addressed "in discussions between Kohl and Gorbachev." If there was not even any discussion about this topic, supposedly critical for the agreement of the Soviet Union to  reunification, then it is reasonable to rule out that Gorbachev in conversations with third parties  would have made reunification dependent on the claimed precondition. In a speech in Berlin on  March 1, 1998, Gorbachev used the term "absurd" about the implication that he was supposed to  have insisted on an interdiction of restitution as a precondition for the agreement of the Soviet  Union to reunification. The same holds true with regard to the discussion partners  Genscher/Shevardnadze. In their negotiations as well no such precondition was raised. In his  memoirs The Future belongs to Freedom, Shevardnadze does not have a single thing to say  about a supposed precondition. Shevardnadze like Gorbachev repeatedly stated in public that the  Soviet Union never raised such a precondition. President Bush and Secretary of State Baker  also stated that die supposed Soviet precondition advanced by the federal government had never  existed. One can read a description of the actual course of events in Hans Dietrich Genscher's  memoirs:

"In the negotiations (note: with the Soviet Union), we were concerned with safeguarding complete German authority with regard to the question of restitution. The German courts and German constitutional bodies of the unified country should retain the full ability to decide whether, how and to what extent restitution (note: for confiscations in the Soviet Occupation Zone) should be made. In my opinion such restitution could consist of restitution in kind. Admittedly there were differences of opinion in the coalition..... We, (that is, the FDP party and he himself) were of the opinion that Section 14 GG should be applied to the extent possible. Under no circumstances did we wish to touch newly created private property; property claimed for public uses also should be returned. But we also did not want the German state to benefit from expropriations in the Soviet  Occupation Zone. It was to be possible to return those properties that could be freely disposed of without infringing upon new ownership rights."

Genscher's statements clearly demonstrate that there was no Soviet precondition. Further they show that the federal government was not acting under any misconception with regard to a supposed Soviet "precondition", implied in Sybilline wording in the second decision of the Federal Constitutional Court about confiscations in the Soviet Occupation Zone dated April 18, 1996, since the most important member of the federal government was acquainted with all relevant facts.

Finally, the Soviet participant in the negotiations and discussion partner of Kastrup, Ambassador Kwizinsky, in his book Before the Storm does not have anything to say about the supposed precondition. Quite to die contrary, he publishes the draft for the agreement dated June 22, 1999, stating that it reflects the Soviet starting position. In that draft (item 4) there is no mention about a demand for "irreversibility" of confiscations in the Soviet Occupation Zone.

2. This leaves the question whether the former GDR had insisted on the irreversibility of confiscations between 1945 and 1949 as a precondition. In its second decision dated April 18, 1996, the Federal Constitutional Court used this as a fall-back argument, since, in view of the proofs then available, the Court could not proceed from the assumption of a Soviet precondition.  By now  we know that this claim of the federal government is equally untrue.

De  Maiziere publicly as well as directly vis-a-vis the federal government demanded that confiscations in the Soviet Occupation Zone not be reversed. However, he was aware that this demand  of the GDR could not be enforced. The federal government was aware of the "bankruptcy" of the former GDR, rightly emphasized by the Federal Constitutional Court. It would have been the first time that a municipal debtor could have imposed conditions on the creditor in bankruptcy. This was also the attitude of the federal government. Accordingly Kinkel told the Federal Constitutional Court that "the decisive factor" for the federal government had been not so much the demand of the GDR but that of the Soviet Union.

Meanwhile, in the GDR the basic principles of the constitution had already been introduced as applicable law, as a result of the contract concluded for the creation of a currency, economic and social union dated May 1990, in particular as result of the law confirmed by the Volkskammer of the GDR  on June 21, 1990, according to which the principle provisions of the contract were to become  the basis for future jurisdiction. But above all, today we know from the statutory declaration by Günter Krause, the chief negotiator of the GDR, that the GDR was merely concerned with the protection of private third parties. In his statutory declaration Krause asserted that die federal government had misrepresented the negotiation position of the GDR. Codification of the results of industrial and commercial expropriations as well as expropriations of other property of private owners from the time of the Soviet occupation had not even been a subject during the negotiations with the federal government in connection with reunification; accordingly there had been no unanimous and coordinated position of the GDR on this matter.

During the negotiations the GDR had only been interested in assuring the protection of private third party rights that might have developed, for instance the rights of settlers on land affected by the land reform. In the opinion of the GDR, restitution to entitled parties should be made possible, wherever private third party rights were not in question; the procedure was to be settled by a federal law. Both German governments had passed the joint declaration dated June 1-5, 1990 by cabinet decision without prior negotiations; however, the federal government reworded the original draft and replaced the word "compensation" with the word "equalization". The federal government argued that the term "equalization" was more comprehensive and included the concept of a restitution in kind. What does this really mean? The GDR wanted to protect the rights of third parties; aside from that, in those instances where third party rights were not in question, they wanted to ensure that properties held as "people's property" could be returned to entitled parties. This also is in accordance with the justification of the Volkskammer regarding the GDR rehabilitation law dated June 1990, which states the following with regard to the victims of Communist arbitrariness in the Soviet Occupation Zone: "Their rehabilitation is in accordance with a strong political and moral need and requirement. This rehabilitation is not only demanded by the parties concerned, but also vigorously supported by the public." As indicated in the statutory declaration of the chief negotiator of the GDR, the federal government deceived the government of the GDR by suggesting that the term "equalization" would be more comprehensive  and, in contrast to the term "compensation", would allow such restitution in kind; here, they were also deceptive in stating that the actual manner of proceeding could be determined by a later federal law. This was not their intention at all.

A  final comment regarding events as they are now known: the described state of affairs has been published for weeks in whole-page advertisements in practically all leading German newspapers calling Messrs. Kohl, Schäuble, Bohl, Kinkel, and Waigel liars, receivers of stolen goods and swindlers. I remember one advertisement in particular from the Süddeutsche Zeitung with the headline "Why must Mr. Kinkel continue to lie?" It is the first time in the history of the Federal Republic of Germany that politicians attacked in public do not dare and apparently cannot afford to risk seeking legal recourse.

IV.             Legal reservations with regard to the arguments of the Federal Constitutional Court in support of the decision about the land reform

V.                

Aside from the fact that the decision by the Federal Constitutional court-as shown-is based on an objectively false factual content, it also is questionable in terms of legal considerations.

By way of prompting a discussion I quote from various passages of the decision of the Federal Constitutional Court dated April 23, 1991. In this document the reasons for the decision have been rephrased and reoriented in such a way so that they refer to the "Aryanization" of Jewish property by the Nazis between 1933 and 1945 instead of the confiscations between 1945 and 1949. This helps to illustrate the dubiousness of the argumentation even to non4egal persons. Below the argument [reworded from the actual decision]:

It can remain undecided whether the confiscations of Jewish property, forcibly enacted with danger to life and limb, were contrary to international law and whether accordingly the applicants might be entitled to claims on the basis of international law. Such claims would not be enforceable and hence are practically meaningless. Furthermore, the Federal Republic of Germany was entitled to agree to the exclusion of such claims for reasons of state. Claims on the basis of Section 153 of the Weimar constitution regarding the guarantee of ownership no longer existed upon the execution of expropriation measures, because the confiscations of Jewish property were considered to be entirely legal in accordance with the current national socialist legal conception. The question as to whether an individual party is entitled to a particular legal claim can only be answered in terms of the legal system of that time. This also applies with regard to excesses that were treated as legally valid. To the extent that the national socialist state remained within the bounds of its power, such confiscations remain legally valid also in accordance with the German international law on expropriations.

Therefore, the Federal Republic of Germany is also not obligated to restitute Jewish property, because it is predominantly state property. No rights can be derived from such a contingency. For one, the Federal Republic is not enriched as a result; due to the

bankruptcy of the German Reich, the Federal Republic had no property gains, but rather inherited debts. The economic bankruptcy, for which the Federal Republic is not responsible, will not be removed by those properties confiscated from the Jews. Furthermore, it would be an injustice to restitute Jewish property, since after all other members  of the German people have also suffered grave injustices in terms of loss of life, health and economic well-being, which cannot be repaired. A return of this confiscated  property would represent a privileging of these victims over other victims, which is  incompatible with the principle of equality. The fact that the Federal Republic of  Germany  is deriving advantages from the use of the confiscated Jewish property is not subject to legal reservations also because this government cannot be held liable for acts by a German state that had not been its own. The present government cannot be held liable for such acts anymore than for acts of foreign states.

Such a decision about Jewish property would not have been enacted. Below I intend show how this argumentation has represented a step backward in the development of the law.

After the war the western allied powers initially tried to order the restitution of Jewish property, 

expropriated in the course of "Aryanization" or sold for a pittance. They tried to do this in form of a law passed by the Control Commission [Kontrollrat]. This failed because of the Soviet Union; consequently the western allied powers passed restitution laws inside their respective zones. These restitution laws stipulated time limits for application for restitution; these were often missed. In one such case the Federal Supreme Court decided that the rights of the Jewish applicant had not been forfeited as a result of his having missed the time limit; the Court argued that national socialist measures of expropriation of Jewish property had been a component of the persecution of the Jews that had aimed at their extermination and as such were null and void from the very beginning (contravention of the ordre public [public policy] in a state of law). As a result the injuriously affected Jew was able to demand his securities from the bank solely on the basis of his               (legally never lost) intangible property. He did not even have to demonstrate ownership, rather it was sufficient that he proved that he deposited the securities  with the bank at the time. The Constitutional Court accepted this legal decision that was initiated by the Federal Supreme Court sitting enbanc (BGHZ 16, 350 ft). With regard to the law on citizens of the Reich (more precisely, re. 11. VO, law on citizens of the Reich, dated November 25, 1941), as result of which Jews               who had escaped abroad were deprived of their citizenship and their property, the Federal Supreme Court had stated already in an earlier decision (BGHZ 9, 30, 34) that these provisions "never were law, but rather from the very beginning were its precise opposite, that is gross injustice" and therefore "immediately null and void." I am now quoting verbatim: 

"The cancellation formally disguised as a law in terms of its content certainly does not have the character of a legal standard. This provision, which ultimately aimed at depriving persecuted people, who had left their home as a result of unlawful persecution,

in the grossest manner violated the overarching principle of equality. It also violated the         protection of ownership rights guaranteed by Section 153 of the Weimar constitution and         the guarantee of ownership...... even though Section 153, paragraph 2 of the Weimar         constitution permitted an expropriation only for the public weal, the lawgiver did not         believe it to be necessary to refer to the public weal for justification of the uncompensated forfeiture of property...... for imposing such a punishing measure against a group of persons that had not been accused in any way...... was devoid of any legal basis .......... accordingly the cancellation could not have resulted in any legal consequences. It could not deprive the persecuted person of either his property or his right to ownership of those property items affected by the cancellation" (BGHZ 16, 350, 353).

In addition the Federal Supreme Court of Justice stated that human rights in the constitutional law are not just guaranteed by this law, but always existed independent of this law.

What do we read today? I am quoting verbatim:

"The question whether someone is entitled to a certain legal claim can only be answered  in terms of a concrete law. The normative bases of expropriations weie considered to entirely legal by both the occupation power and the German state inside the Soviet Occupied Zone as well as by the later German Democratic Republic. Even to the extent that applicable legal bases were interpreted excessively or in accordance with standards of a state of law applied arbitrarily, for instance to individuals politically above suspicion, legal protection basically was not possible; such expropriations were also treated as legally valid."

The land reform decision of the Federal Constitutional Court means that it is now up to the authorities of the Federal Republic of Germany to decide whether they wish to rescind acts of confiscation of the national socialist state (for instance against Jewish property) or to let them stand. In terms of the future development of the law in the reunified Germany, it is no consolation that this will not happen for political reasons; this has become possible legally as a result of the decision of the Constitutional Court. It is not possible to discern any essential reason to differentiate between persecution of a group of citizens on account of their race or on account of their class. Acts of force committed in connection with the communist land reform and confiscations were a component of the destruction (also physical) of a population group, that is the middle class, declared to be "an enemy of die working class".

The first and most important legal statement in the land reform decision dated April 23, 1991 is as follows: the totalitarian SED state considered the confiscations undertaken in connection with the land reform to be "legal"; on that basis the Federal Republic can let them stand. Wrongful actions of the GDR that are not in accordance with international law and a state of law and that contravene our ordre public [public policy] are hereby ultimately accorded legal force, even though the act of respecting foreign confiscations within the country is limited by the proviso of

our ordre public.

I am acquainted with two high-ranking French judges. Both did not even comprehend the legal argument of the Federal Constitutional Court, in particular the explications with regard to the ordre public. They argued that it is irrelevant whether a (fortunately vanquished) regime in accordance with its totalitarian raison d'etat had considered an action undertaken on German state territory to be "legal", but rather that it only mattered whether such an action was actually legal in accordance with the ordre public and the raison d'etat of the state authority in a reconstructed republican state of law. As a result of the fact that the actions were undertaken on German state territory and had affected German citizens, the "domestic connection" of the ordre public— missing according to the Constitutional Court—was easily established.

I have the same difficulties in understanding the argumentation, particularly since, in accordance with the general understanding and especially according to ongoing legal decisions by the Federal Constitutional Court, the German Reich legally continued to exist beyond the collapse of 1945. The contrasting temporary position of the GDR was relinquished at the latest upon joining the Federal Republic of Germany in accordance with Section 23 GG. At that point the GDR joins the Federal Republic in the juristic sense as a part of Germany; hence this presupposes a Germany that exceeds the Federal Republic in terms of territory. It is incomprehensible to me how it is possible to deduce a lack of a domestic connection given this state of affairs.

It also is incomprehensible how the Federal Constitutional Court intends to make the question of the continuance of rights dependent on their practical enforceability. Here I will take the liberty to engage in some polemics: if that were correct, then in future we would have to buy back all our stolen bicycles from the state, since the detection rate is less than five percent, and therefore, after a theft has occurred, it has become practically impossible to claim ownership. The question as to whether or not an existing right can be enforced is a factual question that must be separated from the entirely different question as to whether or not a legal claim exists.

Since time is pressing, I will add only two brief comments. Section 153 of the Weimar „ constitution continued to be valid in the Soviet Occupation Zone, hence also the protection of ownership that was guaranteed accordingly. As a result of Section 45 of the Hague Land Warfare Convention, the occupation power did not have the right to undertake uncompensated expropriations. Accordingly the occupation power also could not transfer such a right to the states. The occupation power's orders therefore must be interpreted in such a way that it did not wish to transfer such a right, which would violate international law ultra vires, and indeed did not do so. Therefore, the states were not effectively authorized to undertake such uncompensated expropriations. The Federal Constitutional Court avoided all these questions, rather restricted itself to the statement that any possibly continuing rights of parties affected by the confiscations could not have been enforced by these parties.

V.    The consequent effects of the so-called land reform decisions by the Federal Constitutional Court

2

The consequent effects of the so-called land reform decisions by the Federal Constitutional Court are manifold. For one, they represent milestones for future development of the law; for instance, various blunders in accordance with the same model have already occurred. Further, these effects are symptomatic for a problem in terms of constitutional law and constitutional politics. Josef Isensee described this at the annual conference of German law practitioners, and it inspired Karl August Bettermann to publish a well received and decidedly readable article entitled "The challenge: a specialized court for constitutional law. The land reform decisions hinder the reconstruction of the east, and they promote differences in basic economic attitudes and opinions in the east and the west, already been demonstrated by opinion research. In the east these opinions have resulted in entirely different expectations and notions of entitlement from the state, and these differences do not promote the growing together, but rather the increased drifting apart of the unified parts of Germany. Last but not least these decisions have considerable political consequences for the future; that is, they have undermined the loyalty of legally excluded citizens and their descendants to our state. This exclusion is further exacerbated by the fact that this group has been excluded from the revocation, provided for by the Administrative Law on Restitution, of administrative decisions not in accordance with a constitutional state in the territory of the former GDR, as is shown in §1, paragraph 1, sentence 3. There one finds an explicit provision to the effect that this law is not applicable to acts of persecution not in accordance with a constitutional state undertaken in the course of the Communist class warfare in the Soviet Occupation Zone, as indicated by the reference to §1, paragraph 8 of the property law.

Why is it so dangerous to push an entire group of citizens toward disloyalty? I would respond that the Federal Republic of Germany is yet to face its real test. This will occur at the latest when the social safety net of German citizens can no longer be financed by our social security plan. Our order would not survive a collapse of this system. Major inroads into this system suffice to initiate political upheavals. In the Europe election 55 percent of citizens did not vote, clearly demonstrating their low opinion of all parties standing for election. The PDS party, formerly the SED, easily got the requisite 5 percent In the new states the PDS is well on its way toward becoming the strongest party; in some cities it already has achieved that status. Our politicians, obsessed with counting the number of votes, are deluded, if they believe that they can do without the loyalty of citizens who in terms of their sheer number perhaps appear to be inconsequential. In any event, aside from the fact that their number is not that inconsequential, as will be shown, this group can reasonably be described as a fairly significant so-called opinion-shaping body.

a. With regard to the legal consequences, I would like to discuss the so-called "Wall" properties. I still remember lectures from my days as a student in Berlin; in particular I have vivid recollections of the comments by Dr. Finkelnburg, currently president [chief justice] of the Berlin Constitutional Court, about the status of Berlin. At that time no West German lawyer was in any doubt that it was a crass violation of international law and the Four-Powers statute to erect a wall through the middle of Berlin and that the expropriations undertaken for the creation of an open shooting range at the border were unlawful. In the political realm today, no argument is considered too threadbare to justify a seizure by the state of properties now located in the center of the reunified city and hence extremely valuable. I am particularly struck by the irony that the 7th Senate of the BVerwG [Berlin Administrative Court] with President [chief justice] Franßen (SPD) refers to the binding nature of the occupation law with regard to the validity of the confiscations between 1945 and 1949, while on the other hand, in the case of the Wall properties, the occupation law (Four-Powers statute) supposedly is not binding. Thus, in the case of confiscations in the Soviet Occupation Zone, the applicability of the occupation law and, in the case of the Wall properties, the inapplicability of the occupation law was used to legitimize the state's seizure of property that never belonged to the state at any time.

Another misstep along the same lines is contained in Section 2 of the Law on Ensuring the Modernization of Living Space. Here it is important to know that according to the legal decision of the V. Civil Senate of the Federal Supreme Court of Justice (at that time headed by Vice President Prof. Dr. Hagen, a non-partisan individual, since retired) an expropriation in the former GDR is not legally valid in those cases when not even the provisions of GDR law were observed. As a result of this legal decision the owner who was to be expropriated by the GDR could demand his property from the state, since he never lost it legally. The coalition FDP and CDU/CSU did not let this rest. The above mentioned provision of the law on ensuring the modernization of living space does not by any means protect the legal acquisition of private parties. Rather, the sole purpose of the law is to remedy failed transfers to the domain of national property, declared to be invalid in accordance with the legal decision of the Federal Supreme Court, and consequently the law is used to justify state property held by the Federal Republic or the new federal states respectively after the fact, and this without compensation.

Now one should think that this is contrary to the constitution, as is also the assumption in the literature. Meanwhile, the Federal Supreme Court ruled on October 10, 1997 (Az. VZR 80/96, recommended reading) that it was a simple determination of property in accordance with Section 14, paragraph 1, sentence 2, constitutional law. Accordingly this would be applicable even if a protectable interest in property claim has been removed in its entirety. The Court ruling admits that the state earlier had decided that a wrongful property acquisition according to GDR law could not become legally valid in the form of acquisition by prescription. However, the Court argued that this decision was handed down only on March 29, 1996. Further, the Court argued that because of the criticism of this decision presented in the literature, rejected by the Senate as late as July 11, 1997 in its decision on that day, no protected act of reliance had been created. If the lawgiver failed to protect the "confidence of the owner in the continued existence of his legal claim" in such a situation "characterized by general and considerable legal uncertainty, the associated uncompensated loss of ownership rights for reasons of public interest, taking into consideration the principle of proportionality, is justified." Accordingly, there was no infraction of the equality principle in view of the wrong legal transactions already settled in accordance with the legal decision of the Federal Supreme Court. Accordingly, the legislator was entitled to make a connection "to the actual inventory of still unresolved legal relationships" and to redesign the degree of codification of ownership that had been arrived at in the meantime.

I was particularly surprised by the argument that exclusion of "accidental profits, dependent on errors that resulted from the recreation of state unity" was permitted by the legislator. The question arises why those, whose legal matters had already been settled as result of an earlier legal decision of the Federal Supreme Court, were allowed to retain their restituted property, while others, in whose cases there had been no settlement as yet for whatever reason, have to lose their property and surrender it to the state without any compensation.

I would like to draw attention to two other consequences. In the course of determination of Stalinist confiscations in the Soviet Occupation Zone, during the parliamentary debates members of parliament from the new federal states, but also from the federal government focused attention on the protection of the so-called land reform owners in a manner that was left an impression in the public, hi particular, they referred to the so-called Modrow law dated March 6, 1990, as a result of which the land reform owners, who had been assigned land at the time, for the first time became legal owners in accordance with the civil law of the GDR. Later the interpretation changed. In Section 233, §12, paragraph 3, EGBGB [Civil Law Introductory Law], the legislator decided the question of legal transfer of land reform properties in devolution of an inheritance in favor of the state. On this basis the government bodies in charge of property administration in the new federal states have demanded the gratuitous surrender of these properties one after the other and have stalled those land reform property owners who objected by involving them in lawsuits. The heirs of land reform property owners all lost these lawsuits. These people no longer understand the world. They might have accepted it, if they had been asked to surrender the properties assigned to them to the former owners. It was and still is well known in the countryside, where traces are longer lived than in the anonymity of large cities, how former owners were expelled, taken away to prison camps, and murdered. In view of the expectations resulting from the explanations of our West German political class, can one hold it against these land reform property owners if they feel betrayed by our state and decide to vote for the PDS?

But it gets even better. One of the most disputed questions of GDR law was the relationship between the regulations applying to a change of owner and inheritance law. In agreement with the comments by Bassenge in Palandt, I argued at that time that upon the death of the beneficiary his heirs become "owners" of the land reform properties that had been assigned to him; here the definition of "property" is based on the legal claim allowed at that time, which is not identical with our conception of property. My argument, resented by many "former owners", was mostly rejected in the literature and also (initially) failed to gain ground in legal decisions. The Federal Supreme Court decided that ownership of properties associated with the land reform is not a component of the deceased beneficiary's estate (BGHZ 132, 71, 73). In 1998 Beate Grün (VIZ 1998, 547 ff.) published the results other habilitation thesis; this made it practically impossible for the Federal Supreme Court to continue to adhere to its opinion. In the decision dated December 17, 1998, V ZR 200/97, the Federal Supreme Court abandoned its existing decision and decided that upon the death of the beneficiary from the land reform his heirs became owners of the land reform properties assigned to the beneficiary.

Given the legal situation, the consequence of this opinion is conclusive. As a result of § 1 of the

already mentioned so-called Modrow law dated March 1990, the restrictions that heretofore had applied to land reform properties were lifted. Thus, in future also the regulations of the civil law of the GDR applied. Tills extinguishes the obligation and the possibility for council members of the respective counties to transfer land reform properties acquired by heirs by way of succession to one of these heirs or to return these properties to the land funds to the extent that transfer or return had not occurred by that time. The result is as follows: all of these properties did not, as intended as per Section 233, § 12, article 3 EGBGB, go to the treasury of the state in which these properties are located. Rather, legal title to these properties devolved on the heirs; these became full owners in accordance with civil law as result of the Modrow law going into effect. That was not allowed to be so. Even the Federal Supreme Court could not get around the explicit and unequivocal text of the law. However, the Court stated that the "settlement goal of the law" (meaning the Modrow law) would be superseded. It would be necessary to assume that the law contained a "hidden settlement gap". The legislator already closed this supposed settlement gap by the already named provision in Section 233, §12, paragraph 3 EGBGB. Contrary to the opinion of Grün, this would not be contrary to the constitution. And, once again with reference to federal constitutional law, it is argued that "in the event of a reorganization of a legal territory, a legal claim benefitting private parties could be completely rescinded within the context of the provision regarding limits of the property." "Even the reliance of heirs not entitled to assignment (meaning: in accordance with the rescinded provision on change of ownership) in the continuance of their ownership of land reform properties" by 1992 had "not yet been confirmed to such a degree... that the time that passed until the effectiveness of the Second Law on Changing Property Rights would have been a hindrance to these provisions." In other words:

ownership of land reform properties assigned to the heirs as result of the Modrow law did not result in a reliance on the state of affairs of the sort that would allow the heirs to retain these properties.

The literature—particularly writings by former GDR legal practitioners—is filled with criticism of the decision of the Federal Supreme Court in favor of the state. Beate Grün, familiar with the materials as result of her work on her habilitation thesis, accuses the Federal Supreme Court of "myriad imputations, one-sidedness and mistakes without equal." She said that it was "basically grotesque" to speak of a "legal consequence contrary to the facts", in view of the fact that the Volkskammer by virtue of the so-called Modrow law had rescinded the obligation to restitute to the socialist GDR land funds and demonstrably had intended to rescind it. The assumption of the Federal Supreme Court to the effect that the Volkskammer had not fully understood its own law and had not intended this legal consequence is described by Grün as "reckless". In the meantime, Hans Watzek, die former minister of agriculture of the Modrow government, also has confirmed that this legal consequence was not an oversight, but rather that it had been intentional. Incidentally, Joachim Göhring, one of the best known civil law experts of the GDR, also explicated in Neue Justiz [law publication], 1999, 173 ff., that the GDR Volkskammer had decided precisely what they had intended to decide.

The decision by the Federal Supreme Court is subject to criticism particularly with regard to the following: it would be in accordance with the jurisdiction of the Federal Supreme Court that basically the law in effect in the GDR should continue to be in effect also after 1990. To this end the Federal Supreme Court even engaged in subsequent subscription to GDR law. The Federal Supreme Court is charged with failing to recognize, in a complete reversal, a completely unequivocal GDR law (the Modrow law) with the claim that the GDR Volkskammer had "made a mistake".

Who can blame the land reform owners injured by this non-recognition of a GDR law for considering this legal decision to be arbitrary, since it is solely oriented around the fiscal interests of the state? Is it wrong for Grim to interpret the legal decision of the Federal Supreme Court as a repression of private ownership "undermining the very foundations of our free democratic constitutional system?" Is it unfair to charge that "the jurisdiction is neglectful of its responsibility to act as an independent third power, when it deliberately-practically by rushing ahead—supports the interests of the state and overlooks the rights of citizens?" Is it really in accordance with the constitution that an ownership claim can be removed without compensation?

It is necessary to remind the growing number of people-particularly within the political realm— who consider legal decisions to be unimportant as long as they are not themselves adversely affected by them that the concerned land reform owners, who feel swindled by the state, have founded an "association for the defense of the land reform" in order to retain their properties or, if they already had to surrender them, to regain them or at least to receive compensation. In this endeavor they are supported politically by the PDS, which by this stratagem not only secures a loyal constituency, but even increases it. The parliamentary party of the PDS already submitted a demand to the federal government (parliamentary printed papers 14/1063, May 19, 1999) asking the government to return the land that was taken away by the state to the land reform owners and their heirs. The PDS as well-and they ought to know, since their predecessor, the SED at that time had absolute majority in the Volkskammer—rejects the imputation by the Federal Supreme Court that the Volkskammer by virtue of the Modrow law had made a decision that they had not actually intended to make. Contrary to the imputation by the Federal Supreme Court, the Volkskammer recognized perfectly well and fully intended that with the effectiveness of the Modrow law the law of succession of the GDR civil law would immediately be applicable to all inheritance and estates. Thus, we now are confronted with the following grotesque situation: the SED successor party of all parties is the one to object to an uncompensated expropriation in our state and in this context—1 believe rightly so—insists on the constitution. The farce becomes complete, when one considers that this concerns the same land that the PDS predecessors between 1945 and 1949 in the course of the Communist class warfare had taken from the owners at that time without any compensation.

In this fashion our state has managed to forfeit not only the loyalty of the former owners, but also the loyalty of the land reform owners. Once again I would like to ask: can we be surprised if that latter group turns to the PDS party? And can the middle-class CDU/CSU and FDP parties, which brought all of this about, be surprised when middle-class voters for lack of an alternative chose to refrain from voting altogether? For reasons of time I must desist from commenting on

the legal decision of the 7th Senate of the Federal Constitutional Court, chaired by President [chief justice] Franßen (SPD). Here one might also draw attention to comparable adjudication developments in the Federal Supreme Court.

b. Finally I want to address a problem concerning constitutional law and constitutional politics. In terms of a political and constitutional law perspective, the disquieting element here is not the action by the government and the parliament. In a democratic society the majority has the power and hence is in a position to affect politics. Governments and parliaments do not decide on the basis of legal criteria, but on the basis of majorities.

Far more unsettling than the actions of the executive and legislative branches, which arrive at decisions on the basis of die majorities, are the actions of the third power in the state, which is bound to serve the interests of substantive justice. The constitution and the judiciary are not set up to protect the majority; the majority does not depend on this protection, since it has the power. Rather, the constitution and the judiciary have been set up in order to protect the core body of laws of the minority against the majority. Our constitution is based on the principle of separation of powers into executive, legislative and judiciary branches in order to provide for checks and balances of state power. Minorities depend on an independent judiciary for protection of their rights against abuses by the state. In the light of experiences with arbitrary state abuses of minorities and individuals by the executive during the Nazi era, the founding fathers of the constitution have inserted the Federal Constitutional Court as a neutral power; it is designed as an independent and politically neutral constitutional body. It becomes increasingly subject to doubt whether the Federal Constitutional Court, filled with party appointments as it is, can still properly perform its assigned responsibilities. Since the Federal Constitutional Court is encroaching more and more upon the jurisdiction of parliament and executive, the political realm has reacted accordingly and is sending more and more party foot soldiers into the court for the protection of its interests. Thus, contrary to the design of the constitution based on a division of powers, the legal reality is characterized by an increasing melding of powers, subsuming the Federal Constitutional Court. The vehicle for this amalgamation of powers is supplied by the political parties; the composition of the Federal Constitutional Court is a mirror image of the distribution of powers in the parliament and the senate of the federal parliament.

This presents many dangers.

One is the fact that political decisions are always confirmed by unanimous legal decisions when the political class has made some political arrangements in advance beyond party lines. A consequence of the politically determined composition of the Federal Constitutional Court is that controversial decisions are handed down only when a unanimous political arrangement was not brought about in advance, because a relevant political group had a divergent opinion on an important issue. In such a case—this also was criticized often—the outvoted judges justify their position by dissenting opinions; in these opinions they often use the medium of harsh criticism to demonstrate their political solidarity with those who elected them. This danger is all the more serious, when constitutional judges consider their position to be only a temporary station to be used as starting ramp for other political ambitions. Since the judges of the Federal Constitutional Court are no longer elected for life, young constitutional judges retire long before they reach legal retirement age. Anyone who in the exercise of his judgeship succeeded in detaching himself from a personal background in party politics, would have a difficult time when trying to resume political activity upon completion of term of office.

Furthermore, political judges do not consider their primary obligation to be the application and judicious interpretation of the law; rather they view their responsibility in political terms. On this basis there cannot be any judicial self-restraint. A politician elected to ajudgeship views the Federal Constitutional Court as a political instrument and the law not so much as a measure, but rather as a boundary mark of a politically intended decision. In other words: the question is not what can reasonably be derived from the constitution with the assistance of juridical methodology, but rather which components of personal political perspectives can be attributed to the constitution without turning the decision into an outright breach of the law.

Others have also commented on this development. Isensee described the Federal Constitutional Court as a "crumbling pillar of the constitutional state". At the annual conference of German law practitioners, he called on the Court to refrain from its "self-empowerment to change the constitution and to engage in unrestrained continual modification of the law", to "maintain a noticeable detachment from contending parties", and "to become once again a proper court that did not dabble in politics and instead would focus solely on the law as measure for its actions while applying juridical methodology. Bettermann also calls for "depoliticalization, the return to a purely judiciary role, reprofessionalization, and a lowering of the profile" of the Federal Constitutional Court. By virtue of the political composition the court is no longer capable of acting as an instrument of purely legal control of political powers. Even though Bettermann is fully aware of the fact that his proposal has little hope of realization, he demands that the court should be composed only of federal judges who are at least forty years of age and have been serving in the Federal Supreme Court for at least five years. Election by political bodies such as the Committee on Election of Judges must be precluded, because that hinders the required depoliticalization, the return to purely judiciary functions, and the reprofessionalization of the Constitutional Court. Bettermann believes that the only solution would be an election by lottery.

c. In terms of their economic effects, the described decisions of the Federal Constitutional Court do not support the reconstruction of the east.

Developments in agriculture serve as an excellent illustration of the catastrophic effects of the refusal to restitute properties of victims of the Communist class warfare in the Soviet Occupation Zone transferred to the state. The state must privatize the agricultural and forestry land for various reasons and seeks to do so via the BVVG [Bundesbodenverwertungs- und -verwaltungs GmbH]. The refusal to restitute properties has resulted in a number of nearly unresolvable problems.

aa. An agricultural operation cannot be developed on the basis of a 12-year lease. I shall explicate this with the following example. It must be possible to expand an agricultural operation that was reorganized as a market produce operation on the basis of business management principles, if the operation has developed appropriately; this, by the way, also creates jobs. A first step generally would be the construction of a storage facility and grain drying plant. Generally this is an economical proposition, since the operation without such a drying plant and storage facility is either forced to sell at unreasonably low prices directly after the harvest or must spend a lot of money to use the drying plant and storage facility of a grain dealer. The farmer loses about DM 2-2.50 per quintal; per hectare this amounts to DM 160.00, a considerable amount. However, a storage facility amortizes in approximately 40 years. Particularly in light of the current SPD/PDS government in Mecklenburg-Vorpommem, where will a leaseholder, who is not one of the LPG functionaries [Agricultural Production Association] and a PDS member, for instance a former owner, obtain a guarantee that his lease will be renewed at reasonable terms and that upon expiration of the twelve-year lease he will not be stuck with a storage facility that cannot be sold and in best-case scenario would be bought by one of the former LPG functionaries at below cost? The same is true with regard to a livestock operation that is a part of an operation on 700 to 1200 hectares of land. Nobody will develop something like that, when it is reasonable to expect that upon the end of the lease term the economic foundation for the operation will be taken away.

Former owners, who despite the attitude of the state have not been deterred from trying to reestablish their operations on a lease basis, are particularly angry that, as a result of the ownership relationships brought about by our state, they are being slandered by PDS voices. They are described as operating parasitic operations purely focused on profit maximization without reinvestment and development investment in the operation, hence hindering the creation of new jobs. Accordingly, these voices argue that for this reason former owners' leases should not be renewed. The perfidy in this situation is that our state has created a set of parameters that makes it impossible for former owners to make long-term investments, and that this set of circumstances is then used as an argument to denounce these as profiteers and to refuse them an extension of the lease. This cannot be described as anything but pure and unadulterated rabble-rousing propaganda methods.

bb. In my opinion an agricultural operation, regardless of who runs it, cannot be successful in the long run, if the operator is not the owner of the land. This is particularly so in light of the looming changes in the agricultural market of the European Union, which can no longer be financed in its current form. In the long term a German agricultural operation will have to produce at the level of world market prices, if it wants to survive. The state also recognized this fact. Aside from the fact that the state is interested in the profits for fiscal reasons, the state also for this reason wants to and must privatize the spoils from the Communist class warfare.

The problem is that the market price of agricultural land is far higher than its eaming-capacity value, so that acquisition of the land by agricultural operations is not economically feasible. Now one might think that it would be a solution if the state would sell the land at its earningcapacity value. However, the earning-capacity of a piece of land with 50 agricultural land value points [based on soil quality as measurement standard] is approximately DM 4,000.00 per hectare. Currently, the market price in the west has currently averaged out at DM 15,000.00 per hectare, in some instances it is even higher; there are many reasons for this, which are beyond the scope of this discussion. If the BVVG would dump agricultural land on the market at its earning-capacity value, this would inevitably lead to a depression of land prices in the west. One might argue that it is of limited importance if land prices in the west will go down. But the situation is more complex; many agricultural operations in the west are deeply in debt and if debt exceeds the 60% credit limit, loans will be distressed. Therefore, in the event of a land price collapse in the west, it is reasonable to expect scores of insolvencies.

Apparently-albeit rather late—the previous federal government recognized this. Therefore, the EALG law (September 27, 1994 BGB1 I, 2624) was created. Its full title is: "Law Concerning State Equalization Benefits for Irreversible Expropriations in Connection with Occupation Law or the Occupation Authority." The title of this law is a deceitful label. More honestly it should be entitled: "Law for the protection of East German functionaries and West German land prices." This law is supposed to make it possible for the so-called reestablishing parties, that is the lease holders, who in turn consist predominantly of former LPG functionaries, to acquire agricultural land at lowered prices. A twenty-year sales embargo (§3, paragraph 10 EALG) in conjunction with the penalty provision that the proceeds from such a sale to the extent that it exceeds the acquisition price must be remitted to the BVVG, i.e., the state, within these twenty years, is supposed prevent a depression of West German land prices. This law was incorporated into the regulation on acquisition of land (December 20, 1995 BGB1 I, 2072, entitled "Regulation Regarding the Acquisition of Agricultural and Forest Land, the Procedure, and the Advisory Board in Accordance with the Law on Equalization Benefits"). This regulation in turn is only partially covered by the power of the law. Even Horst Eylmann, former chairman of the Judiciary Committee, admitted this frankly. He stated that East German parliamentary delegates of all stripes had exerted tremendous pressure, while the West German delegates had failed to acquaint themselves with the (complicated) issue and had eventually simply agreed to everything; it had not been possible to do anything about it.

In the meantime, the European Union Commission objected to the right to make an acquisition at a lowered price of people who were not among the injured parties (in plain language, former LPG members and their functionaries), as provided for in the EALG law, as inadmissible aid in accordance with European Union regulations. Sales have been forbidden; the law must be amended. Numerous purchase agreements will most likely be invalid and must be reversed. Subject to the pressure exerted by the new federal states governed by the SPD the federal government for the time has halted all sales, even though the European Union Commission had not objected to the sale at lowered prices to injured former owners and their heirs.

The arguments submitted by the federal government, since voted out of office, to the European Union Commission were—one cannot describe them in any other way—at the qualitative level of reasoning by a Banana Republic. The Commission was told that the EALG provision dealt with compensation and equalization for injured parties; initially the Commission accepted this. But then there was an application to the Federal Constitutional Court to refrain from executing the EALG law. The federal government objected on the grounds that such a temporary directive against execution of the EALG law would hinder the settlement program, i.e., the sale of land to former LPG members and functionaries at preference terms, as a result of which economic development in the new federal states would be adversely affected. Therefore, the application for suspension of the execution of the law should be rejected in view of the predominant public interest. The Federal Constitutional Court agreed to this as per its decision dated May 21, 1996 (WM 1996, 1224) and argued that the priority acquisition rights of lease holders that were not among those entitled to restitution would be blocked by such a temporary injunction; this in turn would undermine the "independent support program that was the intent behind the EALG law, as a result of which "new ownership structures" were to be created in the new federal states.

The federal government had claimed in Brussels that the EALG law solely provided for compensation of expropriated parties and therefore did not include any inadmissible aid-an outrageous claim. The Commission, upon the publication of the decision of the Federal Constitutional Court, demanded an explanation in a letter dated July 4, 1996 and requested that the federal government substantiate its claim that the preferred land acquisition involved exclusively compensation for injuries, since only in that case there would not be a case of inadmissible aid in accordance with Section 96, ff. EEC Contract. Eight months later the federal government submitted an opinion that was so threadbare that Prof. Schmidt-Jortzig, federal minister of justice, refused to sign it. In its decision dated January 20, 1999, the Commission banned the EALG provision in accordance with the proposal by Karel van Miert, Competition Commissary of the European Union, as inadmissible aid. The federal government let the time for an appeal to the European Union Court expire, since they considered their legal claim to be hopeless. There are ongoing debates within the federal government about how the Commission's decision could be dodged without violation it in a formal fashion.

Since the initiation of an investigation by the European Community Commission put into effect a ban on sales, the BVVG had to review its previous sales of agricultural land on the basis of the EALG law—amounting to 42,314 hectares and 1037 contracts—as to their compatibility with European law. In some instances more aid beyond the purchase price had been granted than admissible in accordance with European Union law. The federal government also realizes that particularly all forestry land sales to third parties rather than to injured former owners are invalid and must be reversed. The government tried to convince the Commission that a reversal of these contracts would be practically (more likely politically) impossible. To date the Commission did not accept this and has insisted on the enforcement of the European Community contract.

Aside from this, in the fall of this year a decision about the EALG law is due to be handed down by the Federal Constitutional Court. In this proceeding the federal government in a memorandum dated May 12, 1999 has argued that there are no reservations in terms of community law with regard to the sale to third parties. Meanwhile the European Union Commission had informed the federal government in writing on the preceding day that the directed ban on sales to third parties could not be rescinded. Further, the extension of leases to 18-year terms could also violate European Community law. The latter was a measure considered by the federal government, in particular by Rolf Schwanitz, minister of state in the Chancellor's Office, with the assistance of Dr. Gerhard Thalheim, parliamentary secretary of state in the Federal Ministry for Agricultural Affairs, and Prof. Dr. Heribert Zitzelsberger, secretary of state in the Federal Ministry of Finance, in order to dodge the consequences of the European Union Commission on January 20, 1999.

A revision of the EALG law is inevitable. In view of the existing political composition in the parliament and the election outlook in the new federal states, treated by all parties as their sole standard for action, is becoming apparent that a revision of the law will amount to a worsening of die situation as far as the former owners are concerned. At that point the EU Commission will reinitiate its proceeding; here the federal government can hope for two developments. One would be that the federal government succeeds to create a fait accompli prior to a decision by the Commission and possibly the European Union Court, and the other would be that the next competition commissary would not have the caliber and independence of Karel van Miert or his predecessor Sir Leon Brittan. The candidates for the Commission recently accepted by Romano Prodi would appear to guarantee quality.

VI.             Conclusion

1.        In conclusion I would like to discuss events in Vichy France, which illustrate particularly well to what extent the so-called land reform decisions of the Federal Constitutional Court deviate from West European legal concepts. If the reinstalled French republican state authority had acted in accordance with the standards of German state law in the interpretation of the Federal Constitutional Court, they could have let the confiscations undertaken by German occupation forces or the Vichy regime in France stand as valid in terms of constitutional law. Instead, the state immediately and absolutely acted to declare this totalitarian interim law to be invalid in accordance with French republican legal tradition (ordre public). French judges in commenting about the decisions of the Federal Constitutional Court point out that it camot be a question as to whether a (fortunately vanquished) regime had considered an action undertaken on German state territory to be "legally valid" in accordance with its totalitarian raison d'etat, but rather only whether such action actually was legally valid in accordance with the ordre public and the raison d'etat of the reinstalled republican constitutional state authority. Since the measures had been undertaken on German state territory and furthermore German citizens had been affected, the "domestic link" of the ordre public that the Federal Constitutional Court had claimed to miss was reestablished. The protection of third parties' acquisitions in good faith had never been discussed in Germany; the only issue at debate had been and still is the property still held by the state.

At a very late point in time, an unpretentious memorial created by Ottl Aicher for those who suffered injustice at the hands of the courts in the name of the German people was installed in the Federal Constitutional Court. The memorial bears an inscription from Vers 16, Chapter 14 of the Songs of Solomon as a warning and a demand: "Justice elevates a people." There will be no justice for die victims of the Communist class warfare in the Soviet Occupation Zone.

For my second concluding remark I would like to begin with a quote from the most recent book by the political scientist Arnulf Barin. He writes: "The virtual clear-cutting among the traditional and new elites during the GDR era has pushed the creative middle dass into the west.... Memoirs of the day written by old communists remember fondly a remarkable period of initial development in GDR socialism. I can only discern the precise opposite, the perspective of its victims. What may have filled Communists in their Soviet-protected playground with enthusiasm in my opinion represented the beginning of suffering of the entire society in the former GDR, as a result of which over three million people were expelled, and resourceful, entrepreneurial, independent middle-class individualists were decimated.

Even though the GDR regime ruled for a shorter time period and caused havoc in less brutal fashion than its model in the Soviet Union, Alexander Solshenizyn's recent statement about the Bolshevik mass murder in principle applies to the GDR. He wrote that it was not simply a genocide in which some population groups were annihilated, but that this genocide had been selective. I quote: "Everyone that stood out was singled out. The KGB and the party apparatus was so huge in order to ensure everyone would be ferreted out who showed any initiative, expressed protest, in other words, made the effort to stand out."

There it is: the people subjected to the GDR regime were made passive and lethargic by narrow-minded persecution and deprived of their sense of self, independence and optimism. Furthermore, active and entrepreneurial citizens were expelled immediately as enemies of the working class and active elites developing in their wake eventually fled to the west in order to escape from the persecution. The effects of the GDR dictatorship will remain with us for decades to come. It would have been possible to break up these structures with a return of the expelled middle class from the west of Germany in conjunction with the restitution of property. Instead our state has completed the expulsion. The eradication and the continued lack of an entrepreneurial middle class in the new federal states will continue to affect us adversely for decades and will force economic and political developments into a direction further away from us despite all transfers of funds.

Opinion research by the Allensbacher Institute and the Forsa Institute provides evidence of the spreading nostalgia for the east, that is, a cultivated remembrance of the caring paternalism in socialism at all levels of life combined with expectations from the state which the state cannot fulfill. Almost half of the population in the new federal states believe that the state owes the people jobs. Accordingly, Mr. Holter, minister for economic affairs in Mecklenburg-Vorpommern and a PDS party member trained in Moscow, considers his main task in view of the high unemployment rate to be the invention of jobs subsidized by the state; the GDR inducted its citizens and consequently also those who became politicians in this attitude. Aside from that, a "taker" syndrome has developed in the new states that does not support independent initiative and results in missteps in economic policy, since investments are not made in accordance with the demands of the market but the designated purpose of development moneys. Anyone traveling through the new federal states will find a lot of defective investments supported by development funds. This has been rightly criticized by the Commission of Experts [Sachverständigenrat]; arguing from an economic perspective, they demanded a restriction of fund transfers from the west. However, when that happens, it will become evident that the acceptance of our order in the new federal states is not founded on the guarantee of freedom and individual rights and the principles of our constitution. Our state is accepted only as long as it pays and can pay. The development and continued drifting apart of east and west is already evident today, when one considers the gains of the PDS, which rejects our order and intends to dismantle it, once in a position to do so.