East German Subsidies Not Doing Much

Leading German economic institutes called for a radical change of course in East German business investment. In a study published Monday, the institutes said government investment and so-called innovation subsidies were not changing the East German business climate. The subsidies are designed to encourage investment in the East, but have been squandered by unsuccessful business ventures and benefited companies that had already planned to invest in East Germany, according to the institutes. More than a decade after reunification, East Germany remains far behind the richer West in terms of employment and investment.