25 Years after the Fall of the Berlin Wall

The rebuilding of eastern Germany seems to have been largely completed. The IW Unity In-dex, comprising seven indicators of the east-west catching-up process, documents continuous if slow progress. The infrastructure of the six new eastern states is now well developed and their unemployment rate is down to single digits and still falling. The state of the economic structure in the east is now closer to that of its western counterpart, with manufacturing contributing over 17 per cent to gross value added. However, although investment subsidies have boosted economic performance, the productivity of the capital invested and of la-bour lag persistently behind western German levels. Per capita economic output remains less than 70 per cent of the figure for western German and the convergence process has almost stalled. There is a lack of large companies, corporate headquarters and economically vibrant conurbations.