Herald economics editor Brian Fallow was in Berlin this week for the celebrations marking 25 years since the fall of the Wall in 1989

Imagine growing up not knowing your father because he has been declared an enemy of the people and has to live in another country you are forbidden to visit.

Imagine learning from infancy to be wary of what opinions you express and to whom.

Imagine discovering years later that a relative had been informing on your family to the secret police.

Dr Anna Kaminsky, who heads the Foundation for the Study of the Communist Dictatorship, in Berlin, does not have to imagine those things.

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She remembers them.

"I am still reluctant to say anything important over the phone," she told journalists in Berlin to cover the celebrations marking the fall of the Wall 25 years ago.

What the Germans celebrated on Monday (NZT) was not only the end of the post-war partition of their country but also the peaceful overthrow of a repressive police state which kept a fifth of the German people in its thrall for more than 40 years.

Viewed from the other side of the world and with the benefit of hindsight it is easy to see the fall of the Wall as just a symbolic moment in an epoch-making geopolitical change, the collapse of the Soviet Empire and the end of the Cold War.

And it is easy to conclude that the East Germans who took to the streets in one city after another that year, in ultimately decisive numbers, were pushing on an open door.

But they did not know that.

While they were encouraged by what was happening in neighbouring countries and in Moscow - Mikhail Gorbachev and Lech Walesa were guests of honour at the official celebrations - the protesters had every reason to fear a "Chinese" response from a Government which openly applauded its counterpart's actions in Tiananmen Square.

They turned out anyway.

And the peaceful and disciplined nature of the protests left the authorities, who were prepared for violence, at a loss.

The protesters were motivated by more than being sick and tired of a failed economic model which had delivered an ever-widening gap in living standards compared with what they could see on West German television.

But the reunification of Germany was not the the protesters' objective.

"What we wanted was to have democratic conditions in the German Democratic Republic," Kaminsky said.

"One of the reasons the Peaceful Revolution was successful was that they were not crying for reunification as in 1953 [when an uprising in East Germany was crushed with the assistance of Soviet tanks]. But when the Wall opened, the situation changed very fast."

By 1990, the popular cry had changed from "We are the people" to "We are one people".

The political momentum towards reunification became unstoppable as people voted with their feet in the sort of numbers which had triggered the closing of the border and erection of the Wall in the first place.

The Federal Republic in the West was not ready. No one had expected the collapse of the GDR, and it was a huge economic shock.

No plan had been prepared to cope with a sudden 25 per cent increase in the population, made up of people whose productivity and incomes were much lower than in the West.

Though the gap has narrowed, incomes remain lower in the East.

In part that reflects a predominance of industries such as construction and agriculture where labour productivity tends to be lower, while manufacturing has suffered a lot of hollowing out.

Subsidies and tax breaks tried, but generally failed, to prop up industrial concerns which suddenly had to comply with West German labour market and environmental standards.

Unemployment in eastern Germany - at nearly 10 per cent - is twice the national average.

"We have a lost generation," Kaminsky said, "people who were 40 or older when unification came and whose skills were not useful in a united Germany.

"It is understandable if a lot of them say 'My life was better in the GDR. I was employed and rents were low'. They forget that those conditions were not sustainable."

The GDR was effectively bankrupt, she said. Infrastructure was crumbling and the Government's own research told it that it could not continue to finance its social welfare policy.

New Zealand Initiative executive director Dr Oliver Hartwich says the decision to allow East Germany to exchange their marks for deutschmarks one-for-one may have made sense politically but not economically.

"East German companies which exported became uncompetitive overnight.

"They imposed the whole West German structure on a country which was bankrupt and where nothing worked.

"What would have been beneficial would have been to turn it into some kind of special economic zone, to give it time to catch up."

A "solidarity" tax introduced to fund infrastructure and urban renewal projects in the East is still in place, though it is to be amended so depressed areas in Western Germany can also benefit.

The economic shock of reunification has imposed costs not only on German taxpayers but on workers too.

By the end of the 1990s Germany had slid from Wirschaftswunder [economic miracle] to being commonly described as the sick man of Europe.

The reform agenda adopted to restore its international competitiveness resulted in real wages flat-lining for a decade and the emergence of a precariat - people living without security or predictability in their jobs and lives - in the workforce.

The price of its neighbours' acceptance of reunification was giving up the beloved deutschmark for the euro, Hartwich says.

Monetary union was seen by the French in particular as a way of containing the economic power of a Germany of 80 million people.

Today, German exporters benefit from having a currency whose exchange rate is unquestionably weaker than the deutschmark's would have been.

But the flipside is that Germany is also the great creditor nation with the eurosystem, with claims against its eurozone partners of more than half a trillion euros.

For all that, Kaminsky believes unification has been well done.

She detects no remaining "wall in the mind".

"If I meet someone and they don't speak a dialect, I can't tell where they come from."

Brian Fallow visited Germany as a guest of the German Government

Five things to know about the Wall

1 Protection against "fascism"

At 1am on August 13, 1961, East Germany sealed off the border between the Soviet-controlled eastern sector of Berlin and the western sectors controlled by the Allies. Over the following weeks, workers erected a 155km barrier encircling West Berlin. The wall itself - up to 3.6m high - was merely the outermost part of a heavily fortified strip that included barbed wire, metal fences, guard towers, hidden alarms and dog walkways. Communist leader Walter Ulbricht called it an "anti-fascist protective wall", though its true purpose was to stop the flood of people leaving for the West.

2 Great escapes

Despite the formidable obstacle and threat of stiff punishment if caught, thousands of people tried to escape by tunnelling under, swimming past, climbing or flying over the wall. Many used Berlin's extensive sewer and subway networks. Others used fake passports made out to West Germans, who were allowed to visit East Berlin. Some dug their own tunnels, often with help from people on the other side. In one case, an entire family escaped using a home-made cable car.

3 Wall of death

At least 136 people, including several children, lost their lives along the Cold War barrier, according to the Potsdam Centre for Historical Research. Some were shot by East German border guards, others drowned in the chilly river Spree. One of the last to die was Chris Gueffroy. The 20-year-old was shot dead nine months before the fall of the Wall. Crosses now mark many of the places where people died trying to reach freedom.

4 Reagan's speech

During its 28-year existence, the wall was a symbol for communist oppression. Western leaders, including US President John F. Kennedy, often made stops at the wall when they visited Berlin. The ominous, grey concrete barrier was the backdrop for American President Ronald Reagan's call in 1987 to then-Soviet leader Mikhail Gorbachev to "tear down this wall!" Gorbachev later claimed not to have taken the dramatic appeal seriously, calling it a "performance" by the one-time Hollywood actor. But the speech, like Kennedy's famous line about considering himself "a Berliner", helped keep up morale in the western part of the city.

5 Wall's fall

On the evening of November 9, 1989, West German television broadcast the news that communist authorities had decided to lift travel restrictions and allow East Germans to travel more or less freely. The reports were based on a confusing announcement by a senior East German official who had failed to spell out various caveats to the new policy. Before the communist authorities could set the record straight, thousands of East Berliners had pushed their way past perplexed border guards to celebrate freedom with their brethren in the West. The communist dictatorship was swept away within months. On October 3, 1990, East and West Germany became one country again.

- AP