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Germany: Unified country, divided economy?

  • March 2014
  • 33 pages
  • MarketLine
Report ID: 2103682

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Introduction

Ever since reunification in October 1990, there have been voices claiming that it was less of a reunification and more of a ‘feindliche Übernahme’ (hostile takeover) that would sow the seeds for an economic disharmony lasting decades. This case study examines the existence of an economic divide within Germany, the potential reasons for it and analyzes whether the gap is closing.

Features and benefits

* Examines the continued existence of an economic divide between the former East and West Germany.
* Analyzes the factors contributing to an economic divide between the former GDR and the former FRG.
* Assesses whether the economic divide between East and Germany is being bridged.
* Analyzes the statistical data on macroeconomic indicators such as unemployment, annual salary, house prices, and disposable income.

Highlights

Almost 25 years since unification, there remains a great deal of debate about how successful reunification has been from an economic standpoint. This report looks at key metrics such as household income, disposable income, gross annual salary, unemployment, and house prices, to determine whether an economic divide persists within Germany.
This report analyzes the role of government and EU subsidies have played in the reunification of Germany, and the rise of so-called Ostalgie, which has seen former GDR brands re-invent and reposition themselves as desirable brands, allowing them to become major players in the unified Germany.
This case study looks at how East and West Germany differed in terms of economic system. In the GDR, the state set production targets and prices and the means of production were state-owned. The FRG's free market economy saw decisions regarding investment, production and distribution based on supply and demand and there existed a free price system.

Your key questions answered

* Does an economic divide exist between the former East and West Germany?
* What are the reasons for the economic divide between the former GDR and the former FRG?
* Is the economic gap between the former East and West Germany being bridged?

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