Germany: the present economic situation of the new federal states, one and half decades after the unification

Résumé du document

At first sight, it seems easy to believe that the German reunification is an economic failure. The fall of the economy, the strong disparities in the country as well as the incapacity of East Germany to develop can demonstrate this assumption. However, it appears better for us to affirm that the reunification is a time-consuming process and is seen as a transition. Indeed, the German economy revives gradually while experiencing difficulties. As regards the disparities, "it was an illusion to believe that East Germany could have rectified itself quickly", as Hardy Hanappi, director of the economic unit of research of the technical University of Vienna, affirms. It will probably take another thirty or forty years to reach a level of equal development between West and East Germany, according to Ulrich Blum, president of the economic Institute of Halle. We will discuss the various hypotheses that rose in 1990 after the reunification of Germany.

Extraits

[...] Thus, the reunification of 1990 deeply marked and disturbed the economy of the country; certain current economic deficiencies still remain since the union of both Germanies Current situation of Germany and prospects 1. The new Germany and its ambitions After its spectacular fall and then its long period of stabilization, especially its condition during the last fifteen last years, the German economy seems to restart again for the better. Unemployment, true plague in this country, moves back little by little, passing from 12% in 2005 to 10,4% in June 2006, then to in October of same year. [...]

[...] The Eastern European markets for East German exports disappeared, since many of these countries could not afford to pay in DM for East German goods previously attained by bartering their own products. Many East German enterprises failed. New private and public investments, most of them from the former West Germany, have since flowed into the former East Germany as its economy was restructured and privatized. The principal economic stake of this merging between the two Germanies was enormous: to rectify the East-German economy and to bring it to the same level as the West-German economy, without however deteriorating the health of the latter. [...]

[...] The transformation of Berlin into the capital of the Federal Republic of Germany is well under way. In fact, political institutions are no longer concentrated in Bonn, but now all powers of the Bundesrat are located in Berlin. Since the nineties, steady progress has been made in the renovation, restoration and improvement of existing buildings to be occupied by some of the ministries. Today, after more than half a century, Germany is still governed from its capital city, Berlin, now a diverse, modern and attractive cosmopolitan urban center of the “Land of Ideas”. [...]

[...] For example, the rate of unemployment reaches 18,7% in the East, which represents the double of the West. The young people also flee in great number from the East: 54% of the 18-30 years left this area in 2004. The same applies to many skilled workers. Finally, the companies settle little in East Germany because of its high production costs. Today, Germany is the largest economy in Europe and the third largest economy in the world, behind the United States and Japan. It is ranked fifth in the world in terms of purchasing power parity. [...]

[...] The export of goods is an essential part of the German economy and one of the main factors of its wealth. According to the World Trade Organization, Germany is the world's top exporter with $ 1.133 trillion exported, from the beginning of 2006 (Germany's exports to other Eurozone countries are included in this total). It has a large trade surplus (165 billion euros in 2006). In the service sector, Germany ranks second behind the United States. Most of the country's exports are in engineering, especially in automobiles, machinery, metals, and chemical goods. [...]