Germany Economic Conditions

The crisis of the governments of all of Eastern Europe made it possible to reunite the two Germany into a single state with astonishing speed: none of the 100,000 demonstrators in Leipzig on 9 October 1989 thought that on 18 March the East Germans would voted to decide on unification, that on October 3, 1990 the birth of the new Germany would be proclaimed and that on December 2, 1990 the residents of the western Germany and those of the eastern Germany would vote together to elect a unified Parliament. In the new structure the Germany has an area of ​​356,953 km 2. The population amounted at the beginning of 1990 (according to estimates) to 79,070,000 residents, A value exceeded on the continent only by Russia. The density, equal to 222 residents / km 2, is more than double the continental average. To fully evaluate the data, it must be considered that the German population recorded a decrease of about 300,000 residents compared to the previous decade. Analytically observing the two sectors, the western part, with 60,505,000 residents, adds up the entire decrease. The density per km 2 has naturally decreased as well, although it remains clearly above the European average. Currently there are about 240 residents / km 2in the western Germany and 172 in the eastern. The demographic dynamics, however, are better than what these figures appear to be, given that the downward trend, which lasted for over a decade, stopped in the second half of the 1980s: since 1986 the population has been stationary in the eastern sector and in slight increase in the western one.

Until the decision to unite in a single state, the population had mostly moved in the short term, mainly within the respective administrative divisions. The city-countryside flow prevailed over the reverse one and the phenomenon took on particularly evident connotations in the western part, whose economy has entered the ” post-industrial ” phase. All the major cities (Berlin, Munich, Cologne, Hamburg, Bremen, Leipzig) recorded population decreases, with the sole exception of the eastern sector of Berlin. The population here has reached 1,271,300 residents, Almost 195,000 units more than in the previous decade. Concerning the population density at the Länder levelin the western sector there are very strong decreases for Bremen, Hamburg and Berlin. The phenomenon has less striking connotations than it might seem because the metropolitan areas sometimes cross the boundaries of the three Länder (whose total area barely reaches the area of ​​the municipality of Rome) and a simple shift of residence from the center to the periphery may involve moving to Lower Saxony or Schleswig-Holstein.

In western Germany as a whole, a slight population shift took place towards Baden-Württemberg and Bavaria, that is, towards south-east, starting from the northernmost three-fifths of the territory, in which a slight decrease was recorded. On the other hand, in the eastern Germany In the eastern Germany, moreover, the start of a profound administrative restructuring of the territory should be noted. The previous 14 Bezirkes were grouped into 5 Länder: Mecklenburg-Vorpommern, Brandenburg, Saxony-Anhalt, Saxony and Thuringia; the Bezirk of Berlin was reunited with West Berlin, constituting the sixteenth Land of the new state. A passage of people from East to West continued uninterrupted, albeit greatly diminished, by virtue of tacit agreements between the two sectors. With the process of reunification initiated and concluded in an unexpected and accelerated way, the projections relating to population variations and displacements in the near future escape demographic forecasts in the strict sense, becoming rather the subject of study and conjectures of sociologists, political scientists and economists. At the time of the reopening of the borders there was, according to forecasts, an east-west movement of great proportions; this movement, however, decreased just as rapidly, under the influence of two phenomena: after the ethnonationalist enthusiasm of the first moments, the western population has begun to see the new arrivals as possible competitors on the work and professional level; potential emigrants from the East have noted how life in market economy countries offers great possibilities, but involves faster rhythms and a much more intense competitiveness than they were used to.

In the second part of the 1980s, the demographic indices saw the western part attesting to a birth rate of 11ı with a mortality of 11.2ı, while in the eastern sector the birth rate, about 13ı, remained higher than the mortality, which did not reach the 13ı. The population should consequently have decreased in the West and increased in the East; however, the opposite happened, given the continuing flow towards the western regions. From a strictly demographic point of view, the persistence of the flow from the East is favorably evaluated in the West, as this could bring back the positive sign in the natural movement. For some time, in fact, not so much the progressive decrease as the inexorable aging of the population had been viewed with fear.Foreign Gastarbeiter, which in 1989 were 5,037,072. A third of these are Turks, plus 600,000 Yugoslavs, 550,000 Italians and 300,000 Greeks. The imposing foreign colony, once made up almost exclusively of males, is now made up largely of families, and with a much more lively demographic dynamic than the German one.

Economic conditions. – The process of assimilation of the former DDR (Deutsche Demokratische Republik) by the Western Germany appears destined, in the long term, to give positive results, leveraging the optimal combination of capital and Western technologies, on the one hand, and the workforce and ample market space on the other. But the short-term social and economic costs turned out to be even greater than expected, given the enormous gap between the two realities to be integrated. At the beginning of the experiment, a thriving and growing Western economy was opposed to the East by a disrupted economy like few others, whose distinctive features were: productivity levels equal to 30 ÷ 35%of the western ones; average gross wages equal to one third and family incomes equal to half; a distorted price and wage structure, coupled with interventionist and welfare policies; heavily indebted companies with obsolete capital; enormous environmental problems (especially with reference to the chemical and energy sectors); historical shortcomings in the distribution of products, with total absence of discretionary goods; more than half of the volume of commercial exchanges carried out in the leadership framework of Comecon; an external debt exceeding 16 billion dollars.

The strategy adopted by the German government in this context aimed at forcing the stages of integration, by channeling capital to the East before the entire workforce flowed to the West in search of fortune, and also imposing Ordnungspolitik(free play of the market) on the Eastern Länder. in a stable and certain financial and institutional framework) on which the miraculous expansion of the economy of the federal government after 1945 was based.

In this context, a central role has been assigned to the privatization of the Treuhandstalt which with its assets of almost 11,000 companies (7 million employees) is the largest industrial agency in the world. In November 1991, the position of 4125 companies had already been redefined in the territory of the former GDR, of which 2467 were sold to the private sector (223 to foreigners), 463 returned to the previous owners, 250 transferred to local authorities and 636 closed as unproductive and without prospects of recovery, without concessions to welfare logics.

The difficulties in the process of industrial restructuring and reconversion can be summarized in an increase in the unemployment rate and in an extraordinary financial commitment which resulted in a government deficit of 4% in 1991.

In that same year, while in western Germany production grew by 2%, in the east it decreased by 20%. In the western part of the country, 1,850,000 workers (6.3% of the active population) were unemployed or part-time workers, and 2,750,000 in the east (39%). The Eastern Länder accounted for 22% of the population, but only for 13% of full-time employees and for 7% of the national product. In the unified Germany the employed amounted to 36 million: 2.3 million in agriculture (6%), 12.4 million in industry (34%), 2.5 million in construction (7%) and 18.8 million in services and public administration (53%).

In a difficult transition phase, in which the enormous problems posed by the unification of a dualistic economic space and two very different societies will have to be faced, it is foreseeable that a phase of construction of a solid market economy will follow which should consolidate itself late nineties. Reliable economic forecasts attribute to the eastern regions an annual economic growth of 7%, starting from 1993, sufficient to bring the trend growth of the whole Germany from 3 to 4% per year. The first driving effects on the Eastern economy could come from the modernization of infrastructures, starting with the systems of communication routes (roads, railways and waterways), which lend themselves to being interconnected with those of Eastern Europe, favoring in perspective L’ integration of the German economic space into a broader geographical context. The data relating to the economic life of the new state are not yet available, therefore those relating to the two sectors in the phase immediately preceding the reunification are reported.

Germany Economic Conditions