What was religion's impact on East Germany and what was the relationship between the church (ie. Lutheran/Catholic) and the government?
There is an important distinction to be between religion (meaning the organized church administration and structures) and religiosity (religious belief/ and observance), and this distinction is quite important to understand the position of the church inside the GDR. Although religiosity did decline under the auspices of the SED state, the churches themselves neither withered away, and indeed gained a greater degree of salience and relevancy during the closing years of the GDR.
The Protestant and Catholic churches occupied a highly ambivalent position within GDR society. As good Marxist-Leninists, the SED saw the churches' presence as a relic of the past and encouraged a broad secularization of GDR society so that the church would wither away. This secularization strategy included substituting religious ceremonies like confirmation and funerals with socialist and the analogues near complete secularization of the educational system. These efforts bore fruit as exemplified by the decline in Lutheran church membership from 80% of the total population in 1945 to approximately 30% in 1978. Yet, the SED never really felt confident in completely eliminating the churches through a co-option like it did with the various bourgeois political parties in the GDR. Again, Marxist-Leninist ideology on the ultimate irrelevancy of religion likely played a role in the SED's oversight of the churches, but keeping them in semi-autonomous existence served the purposes of state. Religiosity among a prominent minority of GDR pastors and bishops could serve to critique the FRG's resurgent economic prosperity and the continued autonomy of the GDR church served to deny Adenauer's CDU an issue that the GDR was a thoroughly godless state. Religious rhetoric on pacifism also added a further arrow to the SED's attack on NATO's sponsorship of the Federal Republic's remilitarization.
But this utility of the churches did not mean the SED trusted or liked the presence of churches within GDR society. Church leaders provided critiques of the SED's collectivization and memories of the churches' co-option by National Socialism ran long. The MfS devoted a considerable amount of effort in both penetrating church organization and compromising church leaders and Stasi monitoring of churches remained consistent throughout the lentirity of the GDR. Church-state relations reached their nadir under Ulbricht's Aufbau des Sozialismus campaign of the 1950s as the SED pressured the Protestant churches to cut ties with their "NATO" counterparts in the West and more closely align themselves doctrinally to the SED state. Church-state relations entered into a thaw during the early Honecker years as Ostpolitik led to an domestic truce with the churches. Again, reasons of state played a role in the SED's actions as an independent and separate GDR church proved that it was a viable, alternative Germany. The 1970s also witnessed a reorientation of the GDR's attitude towards the German past and the SED sought to recover and claim the historical patrimony of Lutheranism and the Reformation as part of the progressive German tradition, of which the SED was the self-proclaimed heir.
But the detente with the churches did not lead to a cooperative relationship between church and state. Most prominently, the Lutheran pastor Oskar Brüsewitz self-immolated himself in 1976 in protest of the state's system of control and observation of the churches, an act that the SED-controlled press denounced as the act of a sick mind. Nevertheless, Brüsewitz's suicide was a sign that the churches' relationship with the state was anything but sound. The economic stagnation of the late Honecker period gave the churches new relevancy inside the GDR as they were the only real institutions not thoroughly controlled by the state. As such, they emerged as an umbrella-like organization for a variety of dissident opinions and oppositional groups. In hindsight, this evolution of the churches had long roots as the SED occasionally viewed the churches as a useful social dumping ground for individuals that did not fit into the mainstream SED system of social integration and loyalty. The GDR Lutheran church, for example, became one of the beachheads for gay rights in the GDR as "discussion groups" served as both support networks and political action groups for the GDR's homosexuals. Even the SED's sponsorship of Christian pacifism proved a double-edged sword in the 1980s, as it provided an umbrella for a peace movement first directed at Reagan's military build-up, but what soon mushroomed into a culture of wider public protests against the single-party state.
Although a few commentators went too far in suggesting that 1989 was another German revolution spearheaded by German churches, the churches as an institution were an important component of the Wende and protest culture of the 1980s. Revelations about MfS infiltration of the churches and its compromising prominent church figures like Bishop Moritz Mitzenheim naturally created a scandal and tarnished the GDR churches' post-1989 reputation. Concurrent to this, the social forces reinforcing the trends towards secularization continued in the former GDR regions despite the end of the SED. Yet to focus on the decline in religiosity among the GDR's population is to miss the forest for the trees; the churches and the SED had a fluctuating relationship throughout the GDR and however much the SED leadership might have wished it, the churches never fully withered away to irrelevance nor did they prove a pliable instrument of the dictatorship.
Sources
Childs, David, Thomas A. Baylis, and Marilyn Rueschemeyer. East Germany in Comparative Perspective. London: Routledge, 1989.
Fulbrook, Mary. "The limits of totalitarianism: God, state and society in the GDR." Transactions of the Royal Historical Society(Sixth Series) 7 (1997): 25-52.
Goeckel, Robert F. The Lutheran Church and the East German State: Political Conflict and Change Under Ulbricht and Honecker. Ithaca: Cornell University Press, 1990.
Ross, Corey. The East German Dictatorship: Problems and Perspectives in the Interpretation of the GDR. London: Arnold, 2002
Religion had almost no impact on the GDR. Religious observance declined markedly during the period of communist rule in East Germany. The government viewed organized religion as a threat to its influence and control, as people who identified with a religion may view that identity as more important that their identity as a communist. People who attended church were less likely to gain favorable employment, attend university or achieve party membership. The GDR's efforts led to a significant increase in people identifying as atheist or agnostic. In 1950, only 7.6% of people in Germany did not identify with a religion. By 1989, this number grew to 63.9%. Protestant churches took the largest hit, as over 80% of East Germans identified with them prior to the establishment of the GDR but Catholicism also declined from 11% of the population to just over 6%.
The same narrative held throughout most of the Warsaw Pact nations. The Czech Republic and Hungary also saw large declines in religious observance. The place where religious observance had the largest impact in Cold War Europe was Poland, where the Catholic Church remained relatively strong throughout the period of Communist rule and received a significant boost when Cardinal Karol Wojtyla became Pope John Paul II. His tour of Poland in 1979 helped give life to opposition movements and further revived the status of the Church in Poland.