Basically the East German government in the 80's started giving gay and lesbian activists everything they wanted because they were afraid if they didn't those activist groups would be used by the West to undermine East Germany. Source is here.

In 1985 the Stasi finally produced a new set of guidelines on how to prevent what it termed “the political misuse of homosexuals.” Some of its recommendations were unsurprising, such as ramping up surveillance of gay activist leaders. But its final recommendation was entirely novel. It insisted that the government find “resolution[s] to homosexuals’ humanitarian problems.” That is, the Stasi decided to actually address activists’ demands.

Their rationale for doing so was actually rather simple. If the government tackled gay men and lesbians’ concerns, then all those church-affiliated activist groups would have no reason to exist. No complaints to be made, Stasi officials reasoned, meant nothing to organize about.

Thus began a series of genuinely radical changes in East German society. The state-censored newspapers, which for decades had hardly ever mentioned homosexuality, suddenly started printing dozens of stories about gay men and lesbians. The government also freed periodicals to accept personal advertisements from gay men and lesbians looking for partners.

The state tasked Berlin psychology professor Reiner Werner with writing a book titled Homosexuality: A Call to Knowledge and Tolerance, which appeared in 1987. Its initial run of 50,000 copies sold out in a matter of weeks. (It would also approve a gay film, Coming Out, that premiered on November 9, 1989, the night the Berlin Wall fell.)

In addition, the state began granting official recognition to gay groups, such as the Sunday Club, a secular activist collective run by Sillge that had been meeting in East Berlin since the early 1980s. And it authorized East Germany’s first gay discos, such as Die Busche, a club that still exists today.

The government even allowed gay chapters within the Free German Youth (FDJ), the state’s official youth scouting organization, and mandated that all FDJ members attend educational sessions dealing with homosexuality. All of a sudden, East German youth were required to attend meetings of gay groups such as the Sunday Club. Remembering this moment, Rausch told me, “The joke was that suddenly everyone was standing in line to get into the Sunday Club,” only a couple years after it had been a target of state repression.