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German unity: Eastern states still trail the west

July 7, 2021

Germany's eastern states still economically trail behind western regions, three decades after reunification. But that gap has shrunk to 18%, according to an annual government study.

Men help assemble wind turbines in Rostock
Rostock in eastern Germany: Manufacturing hubs for modern wind turbinesImage: picture-alliance/dpa/J.v. Büttner

Gauged in economic terms, the five eastern states still trail the western states by 18%, according to data from the Economy Ministry in its annual study on German Unity, which was published Wednesday and based on 2020 data.

But economic performance in Berlin, once a NATO-backed urban "island" that was both divided and surrounded by Soviet-run Communist East Germany, and now a city-state with 3.7 million residents, has reached the overall average, according to the report.

Germany reunified in 1990 — a year after East Germans' protests led to the fall of the Berlin Wall — using precepts largely codified within West Germany's constitution. 

Wednesday's report, presented by Federal Commissioner for Germany's Eastern States Marco Wanderwitz, of Chancellor Angela Merkel's conservative Christian Democrats (CDU), ranks the five eastern states, including Berlin, at 82.8%, compared with Germany's 11 western states.

Excluding Berlin, the gross domestic product (GDP) of the four other eastern states, was 77.9%, signaling disparities among the eastern states themselves.

Marco Wanderwitz
Marco Wanderwitz: Eastern skepticism remains Image: picture-alliance/TSP/S. Weger

Back in 2010, the five eastern states — Brandenburg (which surrounds Berlin on all sides), Mecklenburg-Western Pomerania, Thuringia, Saxony-Anhalt and Saxony — had a combined GDP performance of 69.6%.

Adding the reunified Berlin to that mix, the performance rose to 74.2%.

The individual disposable income in the east was about 86% of that in the west. And, whereas the gender gap disadvantaging women stood at 23% in western states last year, in eastern states the disparity was only 6%.

Private assets remained heavily imbalanced, with western households having €182,000 ($216,00) and eastern households only €88,000, or 48% by comparison.

That gap had narrowed since 1993, when the eastern assets stood at only 29%, according to the report.

On climate-impacting carbon-dioxide emissions, the eastern states, including Berlin had achieved 60% while western states only 21% 

Reunification as 'success'

Wanderwitz, born in Karl-Marx-Stadt (Karl Marx City), since renamed Chemnitz, and a member of the Bundestag from Saxony state since 2002, described the eastern states' economic recovery since reunification as "successful."

He said that since 1990 the siting of government and research institutions, as well as infrastructure projects, in the east, had resulted in new technologies, including, for example, for coal extraction.

Since 2020, the German government no longer provided regional funding based on east-west coordinates, Wanderwitz said, but "according to actual need."

"The overriding goal remains equivalent living conditions," he said, referring to Germany as a whole. 

Floating boat houses, with boats moored alongside
Brown coal extraction replaced by floating tourist house boats at Lausitz, SaxonyImage: picture-alliance/dpa/P. Hirth

On eastern political attitudes, Wanderwitz said many people had a "deepened fundamental skepticism" toward democracy. "This is admittedly a minority, but the minority is larger than in the old German states," he said.

"This is democracy-endangering… this situation must change, that before every regional election in eastern Germany, we stare like rabbits at a snake and tremble over pending results, wondering what percentages extreme-right forces will reach."

In an interview published Wednesday by the magazine Wirtschaft und Markt (Economy and Market), Merkel said the east-west gap had so narrowed that Germany must focus on structurally weak regions in the west, as well.

The federal government would, however, she said, maintain its eastern regional advancement policies — which were begun in the 1990s under her predecessor the late Helmut Kohl, who once promised "flourishing landscapes" in the east.

"We can see great progress in equalizing living conditions in the east and west," Merkel said. "Let's think, for example, of the baseline pension, which is particularly important for people in the new German states is important."  

Carsten Schneider, parliamentary manager of the Social Democrats, Merkel's junior government coalition partner, said eastern states remained disadvantaged and predicted that, in 20 to 30 years, they would still struggle to reach western levels.

That was despite "the capacity for innovation and improvisation being greater in the east," he told the Passauer Neue Presse newspaper.

"We have to take advantage of this," Schneider said, urging a focus in all decisions on new technologies, such as hydrogen for fuel, being kept on eastern states.

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ipj/sms (dpa, AFP, epd)

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