Eastern Germany need 1 trillion euro to develop its economy

Published time: September 03, 2012 12:47
Edited time: September 03, 2012 16:47
GERMANY, Dresden.(AFP Photo / Robert Michael)

The five Eastern states of Germany – the so called new states - need as much as 1000 billion euros to achieve the same level of economy development as the Western part of the country, officials say.

As much as 1 trillion euro should be invested by 2030 in the former GDR states including Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt and Thuringia to complete the economic restoration, according to a plan presented by the Finance Minister of Thuringia Matthias Machnig.

“Two decades of rebuilding East Germany has borne fruit. However, it’s obvious, that the upgrade process is not complete yet,” Matthias Machnig told Germany’s Handelsblatt daily.

After the reunification of Germany in 1990 the Western states have been transferring to the new states between €100 billion and €140 billion a year under the so-called Solidarity plan. The reunification itself cost the country about 2 trillion euros. A new 156 billion euro economic plan, the Solidarity Pact II is designed to boost the economy of the new federal states until 2019 came into force in 2005.

But as living standards in the new lands is on average lower than in the Old states, the eastern German states believe there is much more to be done. Thurinagia’s Maching stressed that the Eastern states should hurry up to ask for financial assistance from the Federal government and West Germany’s regions in particular, as balanced economic development of both East and West would benefit both of them.

The proposed 1 trillion investment accounts for almost seven 130 billion bailout packages for debt troubled Greece.

The strategy plan called “Zukunft Ost” (“Future east”) was prepared in cooperation with consulting firm Roland Berger.

Comments (7)

God (unregistered) 04.09.2012 11:23

First off I'd like to say that Western Germany doesn't live that rich if its living standards are being compared with the US living standards. In Western Germany the average salary is approximately $3000 per mouth, but in the US the similar index is about $4400 per month, but for example  in Germany,  prices at gasoline are tree times higher than in US, food are two-tree times are more expensive, but Germany got gratis education and way cheaper houses, "Medicare" is ,for free, in both counties nowadays. Well, actual situation in Eastern Germany looks pretty worse, the average salary is $1800( like in Moscow, but prices not the same). Further judge for yourselves.

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AcrossHU (unregistered) 04.09.2012 05:44

I thought there isn’t any more East Germany…  It seems the unification of two German states was more a colonization of the east than creating a common homeland, similar to EU. 

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Enrique (unregistered) 03.09.2012 20:05

The problem in Eastern lander comes from the fact that most large German corporations and isntitutions which were based in Berlin, had to left and build new headquarters in Munich, Bonn etc. From Deutsche Post to the German Patent Office, from Carl Zeiss to Deutsche Bank or Siemens....all them left Eastern lander and now hire hundreds of thousands of people in Western lander....and don´t want to go back to Berlin or Eastern lander. So, the only way Government could help is taking the Patent Office back to Berlin, because Deutsche Post is now a private company based in Bonn (last Western capital), and creating new corporations takes time. Only if the population is well prepared and creates new high tech companies (software, hardware) there could be a chance to reverse the situation. Right now, the advantage the Eastern part of Germany have are a good knowledge of Russian language, and from the Russian market which cannot be matched by Western lander, and its logistics at the center of Europe, between London-.Paris-Varsaw -Moscow. So, after decades in which the main German corporations were taken from the East to the West, and they don´t want to go back the past situation cannot be reversed...but a new one is emerging.

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