By: Laurene Jardin
A corrupt empire, high inflation rates, and the general devastation of war slapped the German economy in the 20th century. Today the country is not only known for its cold beer, fast cars and lively festivities, but for being a keynote player in the capitalist world.
This was not the case 25 years ago before the annexation of the Communist German Democratic Republic located in East Germany and the Federal Republic in the West.
“You walked into a store and there would be a toaster. And then about a foot away on the same shelf you would see an old book. And beside that you’d have one pair of women’s shoes in a single size,” Grace Byrne said speaking of her experience in East Germany in the late 80s.
Byrne, an assistant reporter at NBC in Frankfurt and was sent to Berlin to cover the reunification story. She revisited Berlin a few weeks after the dust settled.
Byrne compared the merchant filled streets of post-unification Berlin to Disneyland.
“Everything was for sale. People were breaking up parts of the sidewalk and trying to sell it to us. I mean, geez, to think that Easterners had known nothing about the capitalist world and were thrown into it like this was fascinating,” she said.
Germany not only embraced capitalism; they honed it.
According to the World Bank, Germany currently has the fourth largest Gross Domestic Product, GDP, in the world. Its economy has grown steadily since the 1970s.
source: tradingeconomics.com
Germany also have the largest economy in Europe and hold seats on prominent committees such as the European Union, the G8 and the United Nations’ Security Council.
Axel Huelsemeyer, an expert of international economy and a political science professor at Concordia University, was one of the first Westerners in the social science program at Potsdam University, in Eastern Germany.
He has witnessed and studied Germany’s growth over the years.
This year the country implemented a minimum wage of €8.50 euros per hour, which works out to be about $11.70 Canadian dollars.
Huelsemeyer said that the country is doing well on an international scale both economically and politically. It has been able to lend money to indebted countries like Greece and is involved in organizing peace negotiations between nations like Ukraine and Russia.
Domestically Germany has a few weaknesses.
A recent report by Germany’s Equal Welfare Organization said poverty and wage disparity has not been this high since reunification.
According to the study 12.5 million people live in poverty. Most affected are the cities of Bremen, Berlin and Mecklenburg –Vorpommern.
Peter Finger, Legal and Cultural Counsellor of the German embassy to Canada from 2008 to 2014, was a diplomat for Western Germany in the late 80s and early 90s. Finger helped house refugees who had made it across the Eastern soldiers, negotiated with the German Democratic Republic to free Western prisoners.
“You could tell the difference between a Westerner and an Easterner by their clothes. The West was Americanized. Their clothes were grey,” Finger said.
While there is still a wealth gap between East and West Germany according to Huelsemeyer this is not more than would be expected.
“There is a transfer of goods from one part of the country to another. It’s like in Canada. The West transfers its goods to the East. It’s not an even split of resources.” Huelsemeyer said.
He also explained that Western companies quickly bought out Eastern companies to avoid competition.
In 1990, the federal government instilled a national solidarity tax of 5.5 per cent to help fund the East. In 2009 the tax was brought to court for being unconstitutional, overridden by a higher court in 2010.
Still, Huelsemeyer says that all things considered, Germany has come a long way.
“Where could they improve? I guess they could be more sensitive to the sensitivities of others,” Huelsemeyer said.
“But in terms of economy they are doing a good job.”
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Documentation:
Press Release by Germany’s Equal Welfare Organization “Armut auf Höchststand: Studie belegt sprunghaften Armutsanstieg in Deutschland Kategorie: Pressemeldung.” Study found on the internet. Recommended by an interviewee. Translated with help of Nicole Rutherford.
Study “Armut auf Höchststand: Studie belegt sprunghaften Armutsanstieg in Deutschland Kategorie: Pressemeldung. ” Found on the internet. Found study name through website that press release was released on. Very useful and up to date information that could be easily attributed to an organization.