Today, October 3rd, is the Day of German Unification celebrating the reunification of East and West. As the joke goes, East Germans celebrate the fall of the Berlin Wall and West Germans mourn it. An unforgettable moment for the world, the effects of reunification, or as the Germans prefer “German Unity,” have been and are still being felt here while the events have largely passed from the memory of most people.

Germany was officially reunified at 00:00 CET on 3 October 1990, when the five reestablished federal states of East Germany (Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt, Thuringia and Berlin) officially joined West Germany. Perhaps the most important part of reunification was the Two Plus Four Agreement. It involved both Germanys plus the four occupying powers (US,UK,France, USSR) and settled the final status of Germany. Most importantly, the occupying powers renounced all rights and claims to Germany and Germany itself officially recognized the current border with Poland, thereby also renouncing claims to historically German Prussia which is today part of Poland.

While a momentous event for Germany, Europe and the world, it was not without heavy costs. Today, East Germany accounts for most of Germany’s unemployment and social problems and serves as an important lesson to others. With the opening of the GDR, we saw pictures of the many people flooding into the West. Yet, not in those pictures was the money the Ossis (East Germans) had in their pockets which also migrated westwards.. Former East Germans suddenly began not only moving West, but taking their money with them. In addition, they purchased western products (clothing, electronics, burgers) and hired western firms for things such as construction and modernization of the east. The East quickly emptied out both population and money wise.

In addition, many Eastern companies had no chance of competing with their Western counterparts and quickly went under. On top of the sudden death of many companies, workers themselves were suddenly either superfluous, doing jobs long since mechanized in the West, dangerously under skilled or outright unemployed. The vast development gap between East and West continues to be reflected in today’s unemployment numbers which hide the real problem: age and skills. In former East Germany, both men and women worked full time unlike the West where women often leave the work force to care for children. As one German told me, the problem will die out in 10-20 years along with many East Germans who are essentially unemployable.

Today, unemployment is as high as 25% in parts of the East as people move West or emigrate to other countries like Austria and Sweden. Germany’s few Far-right parties are also primarily based in the former East where hatred of and attacks against foreigners occur, things almost unheard of in the west.. Despite its newly built infrastructure and large amounts of space (both the envy of West Germans), it remains deindustrialized and the recipient of large amounts of financial support frmo the central government. Companies who setup shop in the East also receive tax breaks and subisidies as the East has become Germany’s mini-low-cost-country.

The Cold War may be over but it does and will continue to effect Germany for another decade or two. Outsiders would also do well to remember that the economic problems they often cite Germany as having are less due to their system of government and social system and more to reunification. Billions of Euros have been poured into the former East and every German still pays a Solidaritätszuschlag, or Solidarity Surcharge. While still a work in progress, East Germany can teach us a lot about development and the problems of the developing world.

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