Transfer expenses amounted to 140 billion marks in 1991, rising to 180 billion marks in 1992; a quarter of the federal budget (i Transfer expenses amounted to 140 billion marks in 1991, rising to 180 billion marks in 1992; a quarter of the federal budget (i Länder and the municipalities participate to a minimum extent in the financing of the reconstruction of the former GDR) was consecrated, also in 1992, to the new Länder. These needs, faced with the political incapacity to impose a consistent reduction in public spending in the West, required, in addition to modest tax increases, a large amount of public debt; the previous quasipareggio gave rise to a new current debt equal to 6% of GDP. The total amount of public debt, to which the Länder also contribute to a large extentand municipalities and now also new entities created for the reconstruction of the East, which had already risen to 42.2% in 1991, is estimated to grow by 1995 to 51% of GDP; inflation reached worrying rates for the German evaluation criteria with 3.6%.
However, in the medium term the social problems appear to be more serious and those concerning institutional reorganization, from the judiciary to the university, to the polluting omnipresence of the Stasi, the discovery of which, in addition to producing the setting aside of numerous politicians which, although protagonists of the Wende, are either compromised with the secret police or at least suspected, has given rise to an excruciating process of seeking the truth and self-purification. The difficult redefinition of one’s own identity and the often delicate relationships between Germans from the West and from the East; the serious social problems which in the former GDR accompany the transition from the communist economy to a market economy and the growing unemployment; the fears of conspicuous sectors of the former Western Germany of restlessness and precariousness in public opinion, in which the theme of the Asylanten (refugees and immigrants from Eastern Europe and Afro-Asian countries) has coagulated all sorts of fears and resentments, economic, social, cultural, political, giving rise first to outbursts of xenophobia and then, in the elections to the Schleswig-Holstein diets and BadenWürttemberg (April 5, 1992) in a sensational protest vote, which was expressed, in addition to a hard defeat of both the CDU and the SPD, in a spectacular affirmation of the far right (the Republikaner 11% in Baden-Württemberg, DVU 6% in Schleswig Holstein), which was now considered to be on the verge of exhaustion. The outcome of the elections held in Berlin in May 1992 was somewhat different, where the SPD kept the result of December 1990 improving it slightly (31.8), while there was a clear defeat of the CDU, which went from 40 to 27.5% of the votes.. On the other hand, the feared breakthrough of the far right did not occur, with 8.3% of the votes.
Absorbed by its internal problems, the new Germany was abruptly and unexpectedly placed before the problem of its future international responsibilities by the Gulf War. The low-profile policy adopted in this case by the federal government, if it did not succeed in appeasing the apprehension of large sectors of public opinion, did not satisfy even the allies, who were disappointed by the limited German commitment. On the other hand, in 1991 the support given by federal diplomacy first to the Baltic countries, then (after an initial hesitation) to Slovenia and Croatia in their struggle for self-determination, aroused strong concerns about its dynamism, exposing the Germany at moments of near isolation among its main allies.
After eighteen years of stay at the Foreign Ministry characterized by great political successes, on April 27, 1992 the leader liberal HD Genscher announced his resignation and was replaced in the post by K. Kinkel (Minister of Justice since January 1991). In May 1992 a Franco-German army corps was established which should become operational on 1 October 1995. The tasks foreseen for this corps are: the common defense of the allies (within the framework of NATO), peace-re-establishment missions, humanitarian actions. In the spring of 1992, the former federal government was paralyzed on several occasions by a series of massive strikes by the public service. The government, accused of wanting to make employees pay the costs of unification, after a long tug-of-war with the unions, had to fold (May 7), granting public employees a 5.4% increase.
According to Allunitconverters, the problem of aggression against the Asylanten by far-right youth groups increasingly prone to violence worsened in the summer of 1992. Numerous xenophobic demonstrations, with violence against immigrants and destruction of the residences granted to them by the public powers, have arisen. especially in some cities of the former GDR, giving rise to fierce clashes between neo-Nazis and the police.