Head of Germany's privatization agency gets satisfaction, but not many thanks

April 18, 1992|By Ian Johnson | Ian Johnson,Contributing Writer

BERLIN -- Halfway through reciting her agency's successes in privatizing eastern Germany's once-communist economy, Birgit Breuel's unflappable calm suddenly turns to irritation at an impertinent suggestion.

"Are we too bureaucratic?" she snaps. "Listen, I think that if one sells 20 businesses every day and turns property over to local government every day and all the similar successes that we have every day, then we can't be so bureaucratic."

Bureaucracy, it turns out, is one of Mrs. Breuel's great hates in life. Although she heads Germany's largest organization -- the Treuhand privatization agency -- she hates bureaucracy, has written books attacking it and labored as a state economics director to dismantle it.

Now, as one of the country's most powerful and controversial leaders, she has taken on the Herculean task of trying to clean the bloat and slack out of the east German economy. It is a job that attracts international attention because Mrs. Breuel's agency, if successful, will help pull the German economy out of its slow slide and indirectly boost the fragile U.S. recovery.

Whether a sign of her success or failure, Mrs. Breuel has become the symbol of eastern Germany's economic misery. And, although the job attracts rabid opposition -- her predecessor was assassinated a year ago -- the only woman at the top of Germany's rarefied business world says she is unfazed that she, too, is hated.

"It's not the sort of work that makes you popular. People forget that there has been 40 years of mismanagement here and think, in their anger and doubt, that we are guilty of this. But I can handle it," she says.

Mrs. Breuel also is used to bucking the established order, despite her conservative leanings. Besides being a woman, she never graduated from a university, let alone obtained the title of doctor or professor, which most top German political and business leaders proudly display in front of their names.

Her interest in politics started while she was attending a university, but she broke off her studies to have children. She returned to the political arena through the local school board and eventually won a seat in the Hamburg Parliament in 1970 as a member of the conservative Christian Democratic Union. She then joined the state government of Lower Saxony as economics and transport minister in 1978.

After the conservatives lost power in Lower Saxony two years ago, she joined the Treuhand board of directors, taking over the top job when Treuhand President Detlev Rohwedder was assassinated by left-wing terrorists.

Rather than turn away from her unpopular predecessor's rock-solid commitment to privatize, Mrs. Breuel has held the course and become the target of many personal attacks. The agency's controversial decisions to close or to cheaply sell off inefficient industries have made her a focus of the region's discontent, a result of up to 30 percent unemployment and the loss of once-famous East German companies. Rarely does a demonstration take place when puns aren't made on her name, equating her with the hard lot of the unemployed.

To many in the east, she is also the epitome of the arrogant "wessi," or western German, who has been sent over to secure the booty. Although two-thirds of the Treuhand's 3,600 direct employees are from the east, all top directors are from the west, reinforcing the widespread feeling that the east is being colonized. An additional 1.5 million east Germans work indirectly for Mrs. Breuel in 6,500 Treuhand companies.

Other criticisms focus on the Treuhand's sales. The agency is said to spend too little time reorganizing its companies before deeming them uncompetitive and selling them to west German or foreign companies.

But, as though ticking off a list, Mrs. Breuel rebuts each those criticisms with a cool authority. The Treuhand has spent $10 billion on restructuring its companies. Western Germans and foreigners have to own and run the big businesses, she says bluntly, because eastern Germans lack the capital and expertise.

"These arguments are ideological battles that have nothing to do with reality," she says wearily.

The reality, she says, is that Treuhand has privatized 6,000 companies in less than two years, attracted $60 billion in investment to the region and has secured 1 million jobs. As for speed, Mrs. Breuel scoffs at those who say that the Treuhand is too slow. The agency is negotiating with 2,000 investors. "How quickly they buy is up to them," she says.

Of the lack of foreign investors in eastern Germany, she says, "They have to figure out that it may take a little while to get back their investments, but if they don't use this opportunity, then that's something for them to worry out. No one can say they didn't know about our offers."

Her debating skills are matched by her ability to force through unpopular decisions, such as the recent sale of shipyards, which caused weeks of protests and helped bring down a state government.

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