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If a sudden influx of bankers is an encouraging sign, the East has cause to hope. Anyone entering the lobby of a luxury hotel there these days is greeted by an array of signs proclaiming the presence of representative offices of well-known Western banks. Those in East Berlin's Grand Hotel include the WestLB, Algemene Bank Nederland, Bayerische Landesbank and Salomon Brothers. Peter Dahne, WestLB's representative for the G.D.R., has set up offices in seven other G.D.R. cities, and will soon move into permanent quarters with a < staff of around 50, drawn initially from WestLB's West German employees. Says Dahne: "We expect to face the same competition here as in West Germany." That appears likely. Deutsche Bank will be opening 100 branches together with an East German partner. Dresdner Bank, which quickly set up an office in the city where it got its name, is expanding under the motto "Back to the Future."
Eastern companies that find no single Western partner must eventually seek individual shareholders, either among their own employees or the general population. Ideas have been floated to distribute shares in former state-owned companies to citizens in the form of mutual-fund certificates. At present, ownership of these companies is in limbo, or rather in the hands of a state trustee body, the Treuhandanstalt.
Some enterprises, like the manufacturing of the Trabant, are probably unsalable at any price. They may include major polluters like chemical companies and lignite mines. The outdated state steel company faces a bleak future since its products typically cost three times West German prices. The outlook for agriculture is also grim since farm prices in the G.D.R. are above even the inflated European Community level.
Not all is gloom, however. VEB Polygraph is a remarkable success story -- a sort of Katarina Witt of East German industry. The five principal enterprises of this former state conglomerate -- Planeta, Plamag, Zirkon, Brehmer and Perfecta-will now be run separately. All make sophisticated printing equipment, and all are international leaders in their fields. Some other machine and machine-tool companies get good marks from Western bankers, including the Fritz Heckert plant in Chemnitz and parts of the October 7 group like the Niles gear-grinding machine company that had its origins in Niles, Ohio. The list of the tigers, though, is far shorter than the list of the dogs.
Administering the kiss of life to many of East Germany's industrial behemoths will be a daunting task. Reviving small business should be easier because the area had a long tradition of smaller, specialized industrial companies before the command economy crushed them. It was only in 1972 that a final wave of nationalization swept the last 12,000 firms into state conglomerates. About half of them have already demanded to be reprivatized. Officials in Bonn and Berlin hope the spark of entrepreneurial talent can be rekindled with loans from European Recovery Program funds. Demand is high. An initial allocation of $3.5 billion has already been handed out, and a replenishment of the pot is planned.