East German espionage lifted GDP by 7.4% in late 80s, study says

BERLIN- East Germany's extensive Cold War economic espionage in the 1970s and 1980s lifted its overall economic output by 7.4% at the end of the 1980s, according to a study by the Rockwool Foundation Berlin, seen by Reuters on Sunday.

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Industrial value added was 22.3% higher due to espionage, equivalent to 20.2 billion East German marks, or €4.1 billion ($4.7 billion) in 2020 prices. All estimates refer to 1988, the year before the Berlin Wall fell.

Co-author Adrian Lerche said the findings had present-day relevance as governments tighten export controls, screen foreign investment and seek to protect strategic technologies.

The Stasi, East Germany's sprawling intelligence service, helped companies obtain scientific and technical information from Western businesses and research institutions. Firms receiving useful intelligence recorded faster productivity growth, invested more and concentrated more on core products.

"Stasi espionage strengthened East Germany's position within the socialist bloc," said Albrecht Glitz, co-author of the study. "It did not, however, significantly improve success in Western markets."

The gains also spread through supplier and customer networks, supporting broader economic effects, the researchers said. Each additional valuable piece of information produced an estimated annual return of about €330,000 in 2020 prices.

($1 = 0.8770 euros)

Reporting by Maria Martinez and Rene Wagner, editing by Thomas Seythal/Reuters