Continuing the payments is “good news” despite the possibility they will be shrunk, said Wolfgang Tiefensee, who’s cabinet portfolio is responsible for Germany’s eastern federal states. Tiefensee said the government would be advised on how best to change the payments, currently worth about €600 million ($928 million) per year.
A decision is expected by the end of the year. The subsidies aimed to help get the former communist east back on track was last set to expire in 2006 but was extended back then.
“A break in 2009 would be a difficult blow for the new states,” Tiefensee said, referring to the five federal states in the former East that joined the Federal Republic of Germany in 1990.
Economically depressed after more than 40 years under Communist rule, eastern Germany still suffers from higher unemployment and a weaker economy than the rest of the country.
Tiefensee declined to comment on a statement by a government spokesman that the subsidy could vary from region to region in the east in the future.
Political leaders in the east are pushing for the subsidy to remain at the same level – with no regional variations – through 2013.