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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110024-7

'''FIGURE 18. East Germany is far ahead of the rest of Eastern Europe in the provision of leisure-time facilities. Shown here is one of more than 1,000 open-air swimming pools which dot the countryside. Some 1.6 million persons also visited Baltic resorts in 1970.'''

2. Social insurance

Beginning in the 1880's, Germany developed broad social and health insurance programs, the first European country to do so. The system as it existed before World War II was taken over by the Communist government after the war and expanded, providing improved medical and hospitalization services, sickness and disability benefits, maternity benefits, and old age and survivors' pensions.

The Ministry of Health oversees the nationwide socialized health service. The basic element in the system is the district hospitals; below them are numerous smaller county hospitals which average between 200 and 250 beds each. In addition to these hospitals, there are several special hospitals for specific diseases, a network of clinics for outpatient treatment, industrial dispensaries, and TB and cancer detection centers.

Social security is administered by two organizations. One is the Communist-controlled Free German Trade Union Federation (FDGB), which operates the social insurance system (Sozialversicherung). It covers wage earners and salaried employees. Self-employed persons (except doctors) and members of agricultural and handicraft cooperatives are covered by the State Insurance System (until 1969 the German Insurance Agency). Special social insurance systems exist separately for railway and postal employees, customs officials, and members of the police and army.

The social insurance organization administered by the FDGB is financed primarily through payroll deductions from wages and salaries, together with contributions from employers. (In other Eastern European countries, employee contributions have been virtually eliminated.) The payroll deduction is calculated at 10% of the gross taxable wage or salary, with a maximum payment of DME60 per month. The contributions of the employers matches that for all employees except miners, for whom it is double the payroll deduction. Self-employed persons pay 14% to 17% of their gross incomes up to DME7,200 a year. These deductions and contributions must be supplemented by subsidies from the state.

Payments to the State Insurance System are computed on various bases. For members of agricultural cooperatives, the payment is 9% of cast income and wages in kind, for handicraft cooperative members, the rate is the same as that for wage earners in the social insurance system, and the cooperative as a unit makes a matching contribution. Independent artisans pay at varying rates, generally low, while most self-employed professionals pay 14% to 17% of their gross taxable earnings. Large state subsidies are required to offset the relatively low rate applying to cooperative farmers.

The East German social insurance system provides the comprehensive coverage typical of an advanced society. It pays for medical, dental, hospitalization, and maternity costs. It also provides for various types of pensions, of which old age, accident and disability, and survivor pensions are leading examples. In 1970 the social insurance system took in nearly DME8 billion and paid out more than DME12 billion, the state making up the difference. All figures—income, the state's contribution, and payments—have grown

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110024-7