The Helsinki Pact (33 page)

Thomas nodded and waited for him
to continue.

“I was contacted around a month
and a half ago by a friend who went over to the West, to Frankfurt
to be precise, who called me up and said there was a fantastic
opportunity to make money. This company, Phoenix, was looking to
provide financing to Ossies and wanted names and addresses. The
poorer the people the better, he said. All I needed to do was to
talk to people and fill out forms for as many as I could think of
and I’d earn a lot of money. He would too, since he’d contacted me
and so was one level up. As you can imagine, I know a lot of
people. What I do for a living needs that.”

“Do you have one of these forms?”
Thomas asked, trying to decide whether “the poorer the better” was
Gertner's joke or whether there was some meaning behind the phrase,
something which for the moment escaped him.

“Sure.” Gertner pulled out a
paper from the pile of documents by his chair. Thomas glanced over
it quickly and saw that it was extremely simple and sought minimal
information.

“Last week my friend calls me up
again.” Gertner added. “He says there’s been a big meeting, a
convention he called it, and that we need to start moving quickly.
He wants me to tell all my contacts that they would be receiving
their “welcome money” even if they hadn’t made it over to the West.
They would get a one hundred marks bonus just for taking out the
loans. We’d earn five percent of the actual loan amount. With the
number of people I could bring to this, I could earn significant
money.”

Thomas looked at the form
again.

“I can understand that you and
your friend could get commission but why pay your contacts for
taking out a loan? And look at this form - there's nothing asking
about income or realisable assets, things the bank can use as
security if the borrower doesn't pay back the loan. That makes no
sense at all.”

“Maybe, but that’s exactly how it
works.” Gernter said. “Don’t ask me what it means. I understand as
much about finance as I do about nuclear science. I studied Russian
literature. But I checked with contacts high up in the organisation
and they tell me it’s all perfectly legal.” Thomas sensed that
Gertner was sneering at him.

“Who’s your contact within the
organisation?”

“What do you mean, head office or
here? I know a lot of people.”

“Here. Who’s in charge of these
aspects?”

“Oh, here.” Gertner made a slight
off-hand gesture with his left hand. “Anything vaguely practical is
handled by Henkel - no, sorry, that's changed. It was Henkel but
Spitze has now taken that on. Roehrberg's there too but is too
occupied making himself attractive to Berlin and to women." He
laughed. "One day he’ll become a politician, I'd guess. Oh, and
Putin too, I think, he's into anything that smells of power or
money.”

Thomas’s mind flickered to
Bettina who was probably with Roehrberg even as they
spoke.

After some more questions, not
all of which Gertner could answer, he thanked him, gave him some
money, and left. He searched for a public phone, finally finding
one which was secluded enough for him not to be overheard and
dialled Stephan’s number. As usual, Stephan’s secretary answered
and in her cold but courteous manner told him that Stephan was at
an important meeting all day and would then be away all week. After
a little prying, he got out of her that Stephan was leaving for
Berlin that evening and from there was due to travel to various
cities in the East for about a week. No, she said, she didn't have
a number that she could pass on to Thomas. Yes, she added, the
cities included Dresden but Mr Peetzen hadn't yet decided on what
day he'd visit. Thomas left Frau Dornbush's number for her to pass
on to Stephan, adding that he was likely to be there for only a few
more days and hoped to see Stephan before he left.

It was now well into the
afternoon and what was left of the day was spent tediously chasing
up the remaining informants, working through more unanswered
telephone calls and the inevitable disconnected numbers. He visited
a couple of other informers nearby and talked to another briefly on
the phone but got frustratingly little information anywhere. They
all wanted money up front and then repeated the same few
inconsequential matters or simply exaggerated and lied like Treufel
had. Nobody knew any of the details or understood the overall
scheme. Gertner at least had given him an application form and some
useful information. The only thing that was clear was that the
reach and range of the organisation was considerable. There had
been meetings all over West Germany with hundreds of participants
at each. Each informant could point to at least ten other persons
who had been contacted or were building their own
pyramid.

The lack of information and the
ignorance of his contacts was thoroughly frustrating. It was now
dark, there were no lights on the bike, the wind was rising and as
he realised it would take him a good twenty minutes or more to
reach the Dornbusch farm he decided to give up although he was
hardly wiser about Phoenix than when he'd started in the morning.
He had at least got important confirmation of the involvement of
the local Stasi, he thought. As he pedalled back, tired and with
the gusts of wind and flurries of snow snapping at his face and
chilling him further, cars suddenly looming up uncomfortably close
to him before they braked suddenly and swerved past, hooting at his
lack of lights, he wondered how Bettina was getting on. He hoped
she at least was making some progress.

Still irritated with his day he
slammed the farm door behind him, shutting it more brusquely than
he had intended. The crack resonated throughout the house and Frau
Dornbush, alarmed, rushed out of the kitchen.

“Oh, it’s you, Mr Wundart. Thank
God the children aren’t sleeping yet.”

“I'm sorry. The door slipped in
my hand, I think.” He stamped his feet and shook himself like a dog
coming in, the snowflakes melting off his clothes and puddling the
entrance floor.

“There was a phone call for you.
From a Mr Peetzen, if I got the name right. He gave me a number
where you might sometimes get him in Berlin and said he hoped to
see you around the end of the week. He'll call again, he said,
maybe on Wednesday if you've not spoken by then. I've written it
all down to make sure I got everything for you."

Chapter 26

Monday January 15
1990, morning onwards

THE governor of the Bundesbank,
Buba as it was familiarly known, prided himself on his specialist
economic understanding but found himself increasingly having to
turn politician in order to salvage his professional
recommendations, arguing variously that there was insufficient
economic data available from East Germany or that where there was
information it was unreliable. As far as Buba was concerned what
mattered was economic stability, a tight lid on inflation, and
sound money and decisions therefore needed to be delayed and
delayed until good information emerged.

Kohl, astute politician that he
was, would have none of it. He and his advisers were seeking to
wear down the bank's caution by holding frequent meetings and
deliberately setting short time-scales for producing complex
reports. Today's meeting, in Kohl's view, was primarily to hear the
arguments for different ranges of exchange values before settling
on the most advantageous political one. Stephan looked forward with
interest to the inevitable scrap and mentally put his money on Kohl
to win with little difficulty.

Kohl glanced crossly at his
watch. "Herren, find out for me please just what's going on. We're
running late and I can't waste time sitting around here - it's
intolerable. I have far too much to do."

As Herren turned to Stephan the
door opened and the governor of the Bundesbank, followed by four
senior colleagues, came in. He took the head of the long
rectangular table and his colleagues sat on either side. He made no
attempt to apologize for the delay.

“Chancellor, gentlemen, thank you
for coming. Let me present our views on monetary unification with
the German Democratic Republic. Here are our findings.” He nodded
to the younger colleague to his left, who got up and turned on the
projector.

“As you'll know, we have very
little information on how the economic system of the DDR works.
There are no reliable statistics on any of the key monetary masses,
multipliers, or anything of that sort. We decided it was essential,
therefore, to create our own models. We took some time to do this
carefully and duly input a range of possible variables to verify
the potential outcomes." He looked with approval at the screen.
"This is similar to a Monte-Carlo simulation for option values, if
you’ll permit me the comparison.”

Kohl looked annoyed. “Go on,
please.” he growled "We're here to learn what you've established,
not to be lectured on fanciful comparisons or subjected to
jargon."

The governor pursed his mouth,
breathed out audibly, and resumed. “We’ve had a little more luck in
getting information on industry production levels, and we hired
some experts to provide views on comparative costs and product
competitiveness in key industrial sectors."

The first set of slides, which
showed cost-competitive charts for various industrial sectors, were
projected in rapid succession. “Apart from a few exceptional
situations, mainly in the precision mechanics sector, the DDR’s
production is high-cost and low-quality compared to its western
counterparts. Output is significantly down and the events of the
recent months are bringing about near-paralysis in the production
economy. The following slides show the picture from the
individual/family side in terms of purchasing parity and wealth,
assuming different levels of savings rates. Then there’s a third
element, the fact that a number of goods are currently heavily
subsidized in the DDR: bringing their factory-gate prices to
Western levels would cause an immediate shock to the
system.”

Dry though the information
presented was Stephan listened carefully, mentally translating the
generalised data into information about how the people of East
Germany lived day to day, trying to put a human face on to the
statistics presented. Since he'd been given the job of scouting for
potential business opportunities for Deutsche Bank in East Germany
he'd come to see the country in a new way.

Thomas The presentation ended and
there was silence. Kohl leaned over and spoke quietly for a few
moment with his advisers. He turned to the governor. “I didn’t see
slides on realistic values for conversion. What’s the
conclusion?”

“I thought those were best
discussed rather than presented. We’re having to take a decision
largely groping in the dark. And within limits we can decide how we
want the future to shape up: that is, do we want to add 16 million
consumers or do we want to improve our competitive positioning by
creating our own low-cost production centre in Germany? The choice
of the exchange level of the currencies hinges largely on
this.”

“The exchange rate we settle on
has to be fair. It can't be a shock to the East German population
otherwise their anger against their own government will switch to
us and we'll have riots on our hands. That's not a great start for
a newly reunited country and I won't allow that to happen." Kohl
said. "I also accept, of course, your arguments that it has to be
sustainable economically - we can't risk the future of a united
Germany and so we've got to find a rate that will make people in
the East happy without raising eyebrows in the West."

Kohl, clearly irritated, looked
hard at the governor. "Your job is to put forward the economic
arguments, derived from your analyses, relevant to different rates;
mine is to evaluate the political dimensions. What I cannot
understand is why this process is taking such an absurd length of
time. If we were as slow as this in the Bundesregierung we'd never
achieve anything."

“We’ve made progress but analysis
takes time. We’re finding statistics about two years ago, yet we
hear rumours that the East German bank has been printing currency
at twice the historic levels and that Shalck-Godowlsky is agreeing
contracts for huge levels of imports of foreign goods - some of
these may be completely fictitious of course. We have no
information whatsoever on the reserves of cash held by the Stasi or
the SED, and those could be substantial. Any estimates we make
could be completely wrong. I would err on the side of caution and
opt for a relatively high exchange rate.”

“Yet you still haven't come up
with a range of possible values. What do you mean by
high?”

The governor paused and took a
deep breath. “All our models suggest that a sustainable exchange
rate is somewhere between five to seven Ost Marks to the Deutsche
Mark.”

There was immediate stillness in
the room, something going beyond merely absence of sound as if
everyone present had stopped breathing while they digested the
implications of this extraordinary figure. Kohl rose as if to leave
then thought better of it and sat down again, suppressing his
obvious fury.

“Don't be ridiculous! Numbers of
that sort are completely out of the question. The only exchange
rate anyone in the East has heard about is the official one, at
parity with the Deutsche Mark. We can’t get too far away from that
- the people in the DDR simply wouldn't understand it.”