ABSTRACT
Since October 1990 Germany has been unified; after a short period of numerous celebrations the sobering phase has begun. The voters in the former German Democratic Republic (GDR) are not only confronted with the bankruptcy of the majority of state-owned firms but also with the total collapse of the former political system. While several theoretically oriented economists are discussing the problems of the transformation period, in reality such a transitional phase does not exist; because of the breakdown of the economic and political system a total reconstruction is necessary and hardly any element of the socialist system will survive.
