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Welcome Address of Federal Minister of Transport, Building and Urban Affairs Wolfgang Tiefensee

Seventeen years following re-unification, the new federal states have developed and changed enormously. In 1990 the eastern German economy was near collapse. Productivity was at one-third of the western German level. Today those numbers are history. Growth has touched every corner of the new federal states.

In the year 2006, the eastern German economy grew by 3%--its strongest growth since the middle of the 1990s. Manufacturing is playing a major role in this development as it registered growth of over 10% last year. Growth is also leaving its mark on the labor market. The former staples of industry are being enriched by new sectors. The best examples of this change are the investment locations for solar energy that are advancing at an impressive speed.

Along with the excellent conditions in investment locations, such as modern infrastructure and the qualified and motivated workforce, the targeted economic promotion of the federal government also is playing a role in the significant number of foreign solar firms that have invested in the new federal states and that have provided an impulse to the economy.

Through the second phase of the legislative agreement to bridge the economic gap between eastern and western Germany, the funding for the reconstruction of eastern Germany is secure up to the year 2019. By the end of this legislative agreement (2019) the structural deficit between east and west will have been reduced.

I am assuming that these financial subsidies will produce self-sustaining growth allowing for the new federal states to stand on their own two feet by 2019. The federal government has for years emphasized a policy of incentives that provides targeted support to the strengths and potential of eastern Germany.

All of Germany profits from this policy of incentives. The other regions of Germany are pulled up by the growing economic strength of eastern Germany. Furthermore there are more programs that work especially to the benefit of rural areas. No eastern German region is being written off. Rather a serious path of growth is being pursued that sets the conditions for employment and prosperity for all of eastern Germany.

In the current stage of eastern Germany’s development, each of the new federal states has formed specific regional centers of growth and industries of the future.

Let us look to Saxony as it is one of the centers of microelectronics. The area in and around the state capital of Dresden is an example where in “Silicon Saxony” countless pioneers of microelectronics and nanotechnology have invested and profited from the top research taking place in the Fraunhofer Institute, located close-by.

Another example is Berlin. After the fall of the Berlin Wall, it found itself in a difficult economic situation and had to scale high hurdles. Today the city is developing into a high-tech center for research and development on an international level.

Also, some of the traditional industries in the region have advanced. In the “Chemical triangle” in Saxony-Anhalt, that was the pride of the East German economy prior to re-unification, an increasing number of foreign firms have set up facilities and are taking advantage of the synergies found in this cluster.

In the state of Brandenburg, a strong aerospace cluster has emerged in recent years that will be further strengthened by the building of the Berlin/Brandenburg International Airport. At the same time, the region is distinguishing itself through many successful solar investments.

The northernmost eastern German federal state, Mecklenburg-Vorpommern, is focusing on both traditional and modern values. The tourism industry is booming as in no other federal state and the second strongest pillar of the economy is biotechnology.

The pride of Saxony and Thuringia are modern automobile factories owned by Porsche, BMW, and Volkswagen that are impressive not only because of their futuristic production facilities, but also because they are continuously expanding and offering work to ever more people in eastern Germany. This factor is especially important because despite the drastic development in the region and the efforts of the government there remain hundreds of thousands of people in the new federal states who seek work, but who are unemployed.

We are therefore not yet to the end of the path of equalizing living standards between eastern and western Germany; this still needs time and effort. Regardless we can confirm that the basis for sustainable economic growth in eastern Germany has been achieved and the results have in part far exceeded expectations.

I am especially happy that so many foreign businesses have taken part in this process of success in eastern Germany and, with their investments, have brought eastern Germany further forward. Additionally I would like to encourage foreign investors to utilize our marketing and investment promotion agency Invest in Germany and its industry experts to get to know our especially favorable investment conditions.

Wolfgang Tiefensee

Federal Minister of Transport,

Building and Urban Affairs (Commissioner for the New Federal States)