Life without walls

in Europe we are celebrating the fall of the Berlin Wall – or at least
those of us who are old enough to remember it are. According to a
leader in today's Frankfurter Allgemeine Zeitung, 'Generation Unification' – those born after 1989 – hardly knows who built the Wall or why.
That it should be thus is perhaps testament to how completely Europe has moved on.

It's hard today to grasp the extent to which the world failed to anticipate the events in Berlin on 9 November 1989. At a recent talk on the topic at the Goethe Institut, a German consular official recalled that the big topic in West Berlin at the time was not the anti-government demonstrations taking place a couple of metres away in the east, but the scandalous new bus lanes being introduced on the Kurfürstendamm.

It's also easy to forget the vigorous contemporary opposition to German unification that came from such quarters as the then British prime minister, Margaret. Thatcher. Today, it feels like German reunification was inevitable. In 1989, a divided Germany seemed fixed and inevitable..

Last week, F&C released  a report on how Europe has adapted to East-West Unity. It noted that political developments in Europe such as the Velvet Revolution in Czechoslovakia and EU enlargement would never have happened without the fall of the Berlin Wall.

And, of course, the collapse of the Berlin Wall didn't just change the geopolitical landscape in Europe; it changed the investment landscape too. No Central & Eastern European (CEE) funds without the brave campaigners who took to the streets in Leipzig – and their forerunners in Poland who supported SolidarnoÃ?â?ºÃ?â?¡ in the face intimidation. No 'R' in 'BRIC' without Soviet leader Mikhail Gorbatchev's glasnost and perestroika.  

The flip side is that Germany, Russia and the CEE countries have not been spared the recession triggered by the global financial crisis. In some ways, suggests F&C in its report, Germany has both seen the biggest gains and paid the highest price.

“Germany's GDP since the early 1990s has been lacklustre, lagging behind many European countries,” says David Moss, European equities manager at F&C. “Twenty years on, the former East German region is still poorer than the West and has certainly benefitted from the reunification less than expected. In many respects, the fall of the Berlin Wall was more beneficial to Eastern countries and Russia than it was for Germany economically.”

But whatever the bumps along the road, the celebrations tonight in Berlin are sure to be intense. Three thousand painted Styrofoam dominoes have been erected along the Wall's former route and will be symbolically knocked down in the presence of such contemporary witnesses as Hans-Dietrich Genscher and Mikhail Gorbatchev in a powerful reminder – particularly to 'Generation Unification' – of a crucial moment not just in German history, but in the history of all of Europe.

In its report, F&C recalls the words of late German Chancellor Willy Brandt on the topic of reunification: “What belongs together is now growing together.”

He was referring to Germany. But he could just as well have been talking about Europe.

Fiona Rintoul, Editorial Director
©2009 Funds Europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.