By November, Germany will celebrate the 30th anniversary of the fall of the Berlin Wall. But the state is in a gloomy mood, and few Germans are happy, especially in the eastern part of the country.

Today, about a third of Germans in the eastern part of the country describe themselves as second-class citizens. Contrary to their expectations as Germany unified in 1990, the eastern part of the country did not meet the economic prosperity of the western part. It is therefore not surprising that East Germans now believe, feel and vote differently than Western Germans do. In fact, Germany is one country, but in two spirit.

The latest evidence of this came on September 1, when the Alternative Germany, a far-right populist party, came second in local elections in the eastern states of Saxony and Brandenburg, where the first state won 27.5% and the second 23.5% of the vote. Succession. In the western part of Germany, this party won half of these votes.

The political divide between East and West reflects significant economic differences. Between 1991 and 1996, per capita incomes in East Germany increased from 42 to 67 percent above those of Western Germans. But in the 20 years since 1996, this figure has risen to only 74%. In other words, the post-1989 East-West economic integration process has largely stalled for nearly 25 years. The expectations of the former German Chancellor, Helmut Kohl, in 1990, suggest that the "landscape of prosperity" in the eastern part has not yet crystallized.

Germany's economic integration has largely stalled as a result of political decisions. Prior to the union in October 1990, the West German government decided to abruptly liberalize trade with East Germany. All obstacles to the movement of capital and labor have been removed, and the East German currency known as the “Ostmark” has been transformed into the Deutsche Mark, so that both parties are equal in value for small amounts; in large amounts, each of two Ostmark equals a West German mark. This financial reform has made wages in East Germany soar that they equal wages in the West, although production in the East was equivalent to 10% of the West. As a result, East Germany's industrial sector went bankrupt overnight, and companies lost all their markets in Eastern Europe.

In 1990, the East German government created a new "credit authority" to help state companies survive. This authority privatized and sold East German companies and other assets of West German companies, often at nominal prices, DM in exchange for work guarantees for their employees. This massive support has prompted West German companies to move east. By 1994, this authority had sold all German companies to Western investors, after which it was dismantled and abolished.

The East German economy began to grow rapidly for a short period of time, to catch up with the economy in the West. But without the credit authority providing more support, West German companies were unwilling to invest in East Germany. When the investments ended, the process of integrating the economy halted.

Meanwhile, the East Germans began to hate the credit authority, seeing it as the organ that provided valuable companies and assets to Western companies. The first president of this authority, Detlev Ruhfeder, was assassinated in 1991.To date, two German populist parties, the left-wing League and the right-wing Alternative Germany, are responsible for the disastrous economic situation in the eastern part of Germany.

After 1989, the East Germans learned that there was no substitute for credit authority, because they did not have high-quality industries that they could sell. But the Relative Interest Act says a country can have anything to sell if its wages and prices are low enough. Unfortunately, the wages and high prices of financial reform in 1990 prevented the East German economy from flourishing, like the Eastern European countries, after the collapse of communism.

The rhetoric of “nothing to sell” and “low-value industries” was detrimental to the psychology of East Germans. They felt they had no value in the economic market and lost their dignity. In 1990, she worked at the University of Humboldt in the eastern part of Berlin, and experienced this direct feeling of inferiority among East Germans.

But the biggest mistake made by the German government was the abolition of the credit authority, after all East German property was sold. This authority was supposed to continue to support foreign companies willing to invest in East Germany in order to compensate for the high wages there.

Dalia Marin is Professor of Economics at the University of Munich

Economic integration

It is not too late for Germany to begin the process of economic integration. Interestingly, the government is now discussing how to create equal living conditions between the two sides of Germany. By introducing economic incentives for foreign investment in eastern Germany, policymakers can help bring about the economic boom envisioned by former Chancellor Helmut Kohl.