SPIEGEL ONLINE INTERNATIONAL: Billions have been pumped into the former East Germany, but 20 years after the fall of the Berlin Wall, its economy has not caught up with the West. A new report praises the progress so far but warns that the region needs well-educated young people and an influx of immigrants if it is to thrive.
When the Berlin Wall finally fell in November 1989, a wave of hope and optimism swept across Europe -- perhaps nowhere more so than in the once divided Germany. Hope, however, soon gave way to disillusionment as the collapse of the Socialist planned economies saw millions of people lose their jobs and many became nostalgic for their old way of life. In Germany, despite the pumping of massive funds into the former Communist East, the stark divisions in income and employment between the two halves of the country rapidly undermined the initial wave of enthusiasm for reunification.
Now, 20 years on, a new study on the economy in the former East has shown that while there has been huge progress in bridging that chasm, a significant gap still remains. While in the 1990s the two halves of the country saw their economies slowly converge, stagnation set in at the turn of the century and since 2008 they have actually begun to drift further apart again. The report by the German Institute for Economic Research (DIW) has found that there are still significant structural problems to be overcome. In particular the region has to battle a demographic slump and is in need of better qualified young people and immigrants to keep its economy growing. 'Exuberant Expectations' in 1989 >>> smd -- with wire reports | Friday, August 28, 2009
