Summary — This essay analyses the results of the process of privatization in East Germany, as well as the main consequences of unification for production and employment in the new Länder eight years on from the fall of the Berlin wall. The transformation from a centralized, planned, socialist economy to a market economy has been a delicate and problematic process. In East Germany, as opposed to other Eastern European economies, the intervention of the Western "big brother" has provided a vast financial influx. Nevertheless the economic and social costs of the transition have been high. The central part of this essay concentrates on the analysis of the peculiarly "German road" to privatization, practiced in the new Länder by means of the intervention of the powerful state agency "Treuhandanstalt", and in particular on the dilemma between privatization and relief that this institution had to address. In then presents data which underline the noteworthy results reached by the agency over the five years of its existence, but also the high economic and social costs associated with this process. The last section of the essay looks at the profound changes in the structure of production and employment in the eastern territories inevitably induced by the transition, and also examines the most recent developments.