Opinion: 30 Years After Reunification, East and West Germany Still Show Evident Economic, Social, an
Updated: Oct 15, 2021
On Sunday, the 3rd of October 1990, the world witnessed history as the Federal Republic of Germany (West Germany) and the German Democratic Republic (East Germany) reunited as the Federal Republic of Germany after a bitter half-century of democratic-communist tensions, East-to-West defections, and mutual distrust. Although the two regions are officially under one government now—and living standards, citizens’ sentiments, and infrastructure have overall taken a turn for the better—they are still as different as night and day.
Historical Differences Between the Regions
Before analyzing the modern-day status of unified Germany, it is necessary to consider the histories of the regions. After the defeat of Nazi Germany in World War II, Germany split into East and West, with the Soviets (promoting a communist society) being the primary influencer of the Eastern third and Western Democracies such as the United States (promoting a free democratic society) influencing the Western two-thirds.
Due to the unstable nature of the Soviet political and economic systems, East Germany’s infrastructure and quality of life were devastated following separation, with effects that continue to manifest today. For example, former East Germany has a crumbling system of old Soviet-era infrastructure. Contrarily, the West’s association with democracy and economic superpowers like the U.S. enjoyed significant increases in market size, beneficial immigration flows, and economic advances resulting from a productive capitalist system.
Modern Day Economic Divides
Before the adoption of the Euro, the West German government established the Deutschemark (the currency used in West Germany and then unified Germany) to be equal in value to the Ostmark (that was used in East Germany). This was in spite of the Ostmark being significantly lower in value to the Deutschemark, particularly in the black market. In fact, at the time of reunification, one Deutschemark could be purchased for approximately five Ostmarks, essentially increasing the value of the Ostmark by 500%. Because industries in the West were already far ahead of the East by the time of the reunification, the adoption of the one-to-one exchange rate resulted in the East’s continued struggle to compete, considering the sudden freedom its economy gained, after having a tightly controlled command economy for nearly a half-century before.
Despite continued government efforts to redistribute wealth to the East, German states continued to lag behind, leading those attempts to remain unsuccessful in establishing economic equality between the two regions.
Today, these economic differences continue to manifest in various forms. Regarding income and jobs, East Germans, on average, earn only 86% of what West Germans earn in disposable income, and modern Bundesländer in East Germany have significantly higher unemployment rates (6.9%) than those in West Germany (4.8%). The declining and ageing population in East Germany, primarily due to the mass defections and migrations of over 2.2 million Germans from East to West, also have resulted in a dire situation for the East.
The difference in the productivity of the two regions is also notable; while the Gross Domestic Product (GDP) per capita is nearly €43,000 in former West German states, it is barely €32,000 in the East, about 25% less productive .
These economic differences largely stem from the vastly different economic systems of the regions during the Cold War, due to which businesses tended to headquarter in West Germany, wherein the financial system promoted free enterprise. These trends continue today, as not one company listed on the DAX-30 (Germany’s predominant stock exchange index, comparable to the DOW Jones Industrial Average Index in the U.S.) is based in former East Germany.
Differences in Citizens’ Sentiment also Prevalent
Likely partly influenced by these developmental differences since reunification, the citizens of East and West Germany have significantly different opinions regarding the course of their country and the world. Germans themselves believe that the East has not yet caught up to the advanced level of the West with respect to the standard of living: 74% of former East Germans and 66% of former West Germans believe this.
Former citizens of East Germany, likely due to the difficult conditions imposed on them by the communist regime prior to reunification, also tend to have a more disgruntled attitude towards their lives and country. For instance, nearly 60% of former East Germans today believe that they are treated as second-class citizens, and only 38% believe that reunification was a successful process. Furthermore, East Germans also have evident frustrations with the democratic system, as only 78% of East Germans today believe that democracy is the best form of government, compared to the West’s 91%.
Arguably, these frustrations of East Germans stem from the hardships they endured when the former state-owned industries collapsed after the fall of communism. At this point, frustrations have become political ideologies, as East Germans turn to right-wing nationalism, particularly with the Alternative für Deutschland (AfD) party, which has seen exponential increases in popularity in East German states, particularly Brandenburg and Saxony.After the 2017 German federal election, AfD was the party with the third-most seats, after the progressive Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany), SPD, and the Christlich Demokratische Union Deutschlands (Christian Democratic Union of Germany), CDU, the party of outgoing Chancellor Angela Merkel. 2017 was the first German federal election wherein right-wing nationalists were elected since the fall of the Nazis. Considering the economic hardships of East Germans due to their rule under the failed system of socialism (and their evident political results), the German government must proceed with caution in order to please both sides of an increasingly divided and disgruntled population.