Breaching the East-West Economic Divide

When the German cabinet presented its annual report on the state of German unity Wednesday, it reached the unexpected conclusion that the economic gap between East and West has, in fact, begun to close. Coming weeks after President Horst Köhler's controversial comment that the former East would never have the same living and employment standards as the rest of the country, few would have expected the positive results laid out in the report. Contrary to perception, "with the exception of the building sector, slowly but surely eastern Germany is managing to catch up economically," the report stated. It therefore looks as though the government is indeed reaching its goal of equalizing living standards across Germany. The report, presented by Manfred Stolpe, Minister of Transport, Building and Housing and the government's special representative for the eastern states, showed that despite the broader trend of economic downturn, production in eastern German industry grew an average 5.5 percent per year over the last decade and reached 74.6 percent of the western German standard. Engineering, the food, car and electrical industries are enjoying a particular upswing, proving that the process of successful reindustrialization is well underway. Were it not for the slump in the building sector, the report pointed out that the rate of growth in the former East between 1992 and 2003 could have reached 3.7 percent, considerably higher than in the West.