Growing Together: 25 of Economic and Social Integration
Where the Berlin Wall once cut through Berlin, a new government quarter has transformed the area and created a bridge between the two halves of the city.
Following reunification of the two German states in 1990 Germany faced a challenge that was unique in history. The aim was to bring living conditions in both East and West closer together. As almost the entire East German industry was outdated, enormous efforts were called for to modernize it.
Since reunification around EUR 80 billion or around three percent of the GDP of the entire country have been transferred annually. The convergence process is proving to be more long-term than originally foreseen, but much progress has already been made:
For example, in the fields of education and healthcare there are hardly any differences to be seen. The transportation and telecoms infrastructure in east Germany is among the most modern world-wide, and east Germany is also very successful in technological fields of tomorrow, such as energy and environmental technology. Most of the historical old towns have been restored in exemplary manner and are now prime tourist magnets. In some walks of life, such as infant childcare, east Germany is actually the trailblazer.
Beacons of Hope
Enlarge image The East German textiles industry collapsed after reunification, but today factories like this one in Zwickau that makes high-tech fabrics for airlines, the oil industry and the military are once again driving economic growth and employment. (© picture-alliance/dpa) Meanwhile, a small but efficient industrial sector has developed in various high-tech centers, so-called “beacon regions” in the five new federal states. These include the regions around Dresden, Jena, Leipzig, Leuna, and Berlin/Brandenburg.
The manufacturing industry has established itself as the new powerhouse driving growth. Production rates continue to be high. As unit labor costs are lower than the West German average and almost only cutting-edge technology is used, standards in this particular sector are almost on a par with those in the old federal states.
Nonetheless, fighting unemployment in East Germany is still a challenge. Totaling EUR 156 billion, Solidarity Pact II, which came into force in 2005, provides the financial basis for the advancement and special promotion of federal states in East Germany until 2019.
Enlarge image The solar energy firm Solarworld has invested in major facilities in the Saxon town of Freiberg. (© picture-alliance/dpa) The disposable annual income of people living in east Germany in 2006 was about 14,600 euros ($20,085) (18,800 euros in the west) and has doubled since 1991. Pensions in east Germany for men (1,004 euros per month) and for women (about 664 euros per month) are actually higher than in west Germany, where they are 967 euros and 485 euros respectively. The main reason: the fact that the population in east Germany tends to have been in full employment throughout their working lives, as there was full employment until unification in 1990.
The rate of unemployment in east Germany reached an all time low in 2009, but it is still nearly twice the rate in East Germany. In February, 2010, the Federal Statistical Office reported that the unemployment rate was 13.7 percent in East Germany and 7.4 percent in West Germany. Yet labor market conditions vary greatly by region, sector and qualification levels. Above all, the economic hubs of Dresden, Chemnitz and Leipzig now boast higher density employment than do some regions in west Germany.
Enlarge image Dresden's Frauenkirche, which was destroyed in World War II, reopened in 2005. It is one of many historic monuments in East Germany that have been restored since unification. (© picture-alliance/dpa) The 2009 Annual Report on the Status of German Unity discerns clear differences on balance between east and west Germany’s economies. Total economic output (which compares per capita GDP) in 2008 in east Germany was about 71 percent of that in west Germany. The German Federal Government therefore continues “unreservedly to advocate overcoming the differences caused by the past division.”
Role for Civil Society and Social Services
Support focuses among other things on further strengthening future business fields and running programs for the long-term unemployed, for the elderly and for persons with lower qualification levels. The Government discerns great opportunities for east Germany in stronger European cooperation with its central and east European neighbors.
Enlarge image Once neglected neighborhoods like Prenzlauer Berg in East Berlin have now become desired places to live and hotspots for tourism. (© picture-alliance/dpa) Structuring Germany’s inner unity is also a matter for civil society. For this reason, the Bundeszentrale für politische Bildung each year awards a “Unity Prize – Civil Prize for German Unity”. It is bestowed on people or projects that have dedicated their efforts in an especially creative way to structuring German unity and have brought their own ideas to bear to ensure east and west Germany grow closer together.
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