While Germany's economy will shrink by 6 percent this year, the former communist eastern half will only shrink 5 percent thanks to more small and medium-sized firms that are less dependent on exports, the report said. Eastern Germany is also home to advanced industries, such as solar power and biotechnology, that have fared better during the latest downturn.
“Twenty years after the peaceful revolution and the fall of the Wall, the achievements of the East Germans are being recognised in 2009,” Transport Minister Wolfgang Tiefensee told reporters after presenting the report to the cabinet. “For now, the east has not been hit as hard as the west” by the crisis, said Tiefensee, who is responsible for federal efforts to develop the east.
But not all is perfect in the east. Unemployment in the eastern German states is still stuck at 13.3 percent, whereas joblessness in western Germany was only almost half as much, at 6.9 percent.
Despite the progress, the report says east and western Germany remain mentally estranged from one another. Many Germans refer to the phenomenon as “the wall in the head,” a reference to the Berlin Wall which separated the city for 28 years and symbolised Germany's division between the capitalist west and communist east.
“The mutual acceptance of citizens in east and west Germany is, despite all progress, still insuffient,” the report said. “People from the former different parts of the country don't recognise one another's achievements.”
The report says more efforts are needed to confront stereotypes and transcend cliches. Eastern Germany will continue to receive extra development funds thanks to the Solidary Pact, which is an extra tax surcharge which transfers tax revenues to the eastern states.
The pact is scheduled to run out by 2019. By then, eastern Germany should have achieved “self-sustaining growth,” Tiefensee said.