The German economy continued to suffer from the burdens of the reunification process until the second half of the nineties, in particular due to the difficulty of absorbing the labor supply coming from Eastern Europe (see above) and of containing the public deficit., which, from the values below 0, 5 % recorded by the Federal Government in the Eighties, had jumped to 4 % in 1991, to remain, again in 1998, not far from the 3 % indicated as the threshold for admission to the European monetary union.
The GDP, by contrast, has maintained an average annual rate of ‘ 1, 7 % in the period 1991 – 98, characterized by alternating periods of expansion and slowdown, both production and export.
The effects of the world recession on orders from abroad and the lower competitiveness of German products due to the strong appreciation of the mark (1995) coincided with the significant increase in imports, fueled by the demand for domestic consumption which exploded in the eastern Länder. The contribution of the latter to industrial production, however, declined dramatically, as well as the global economic growth rate (from ‘ 8, 5 % in 1994 to 5, 6 % in 1995), highlighting regional imbalances of enormous significance, the reabsorption of which was such a problem as to force the government into an austerity policy that was certainly unpopular as it was forcibly limiting social guarantees.
With 30 % of the territory and 20 % of the population, the East took part in the formation of GDP, still in the mid-nineties, to an extent of just over 10 %, and barely 5 % in the secondary sector; As a result, per capita GDP was only 53 % in comparison with the West, where the gap between the growing southern Länder and the declining northern ones was also accentuated.
From a sectoral point of view, in the country as a whole, in 1997 the primary sector provided 1.1 % of GDP, absorbing a share of the active population equal to 2.9 %; the secondary accounted for just over 33 %, with a share of assets higher than one point; the tertiary sector for 65.8 %, with 62.8 % of assets.
A positive, long-term aspect is represented by the recovery of large agricultural areas, in particular in the Länder of Mecklenburg-Vorpommern and Saxony-Anhalt. Germany has already become the leading European producer of milk and pork, as well as a large cereal and beet country. The land structure also benefited from it, passing from an average farm area of 20 ha in the West, with a strong incidence of marginal and part-time crops, to having large mechanized farms in the East, with an average area of 300 has, which, by transforming cooperative or state management into a modern entrepreneurial structure, will be able to play an important role in the European Community framework.
The industrial sector, in turn, is going through a phase of reconversion linked not only to the readjustment or disposal of the old production apparatus in the Eastern Länder (where good results have also been obtained, as in the case of the Eisenach car complex), but also to the modification of the global localization framework, with the enhancement of the districts of small and medium-sized enterprises, especially in the peripheral areas: a phenomenon which, accompanied by the development of the innovative service sector, has favored the take-off of the Länder such as Baden-Württemberg and Bavaria, but also the holding of others, such as North Rhine-Westphalia, in the face of the crisis in the mining and iron and steel sectors, and which will be able to recover some significant specializations in Eastern Germany itself, such as optics in Jena or microelectronics in Erfurt.
The high costs and, in the East, the low productivity of the labor force have certainly reduced the competitiveness of German industry and induced companies to invest, rather, in Eastern Europe (Poland), in the Far East and even in France; in addition, the increase in energy needs weighed on the sector, due to the gradual abandonment of the use of highly polluting lignite in eastern Germany However, the prestige of made in Germany, advanced technologies and the same investments abroad, as well as the leadership role in the process of European unification, keep broad prospects open to Germany in the context of globalization of the world economy.
A key position is assumed by the reunified Germany also as regards communications, in particular railways and waterways. For the first (overall 41. 000 km of lines), where – once again – the obsolescence of fixed material and rolling stock of the former GDR has forced the Deutsche Bahn in a massive financial effort (80 billion DM) for modernization, as part of an already planned corporate reorganization towards privatization, the new high-speed connection between Hanover and Berlin reduces the travel time from the German capital to Paris (via Cologne) to less than 8hours; furthermore, the connections from Hamburg and Koblenz again to Berlin and from Frankfurt, Nuremberg and Munich to Leipzig, by strengthening the network in the OE direction, rebalance the prevailing NS trend that the relational system had assumed after the division of the German state. As for the waterways, the opening (in September 1992) of the Rhine-Danube connection made Germany the heart of the ‘new fluvial Europe’, open to the East.
In this way, the recomposition of the German space takes shape, no longer hinged only on the Rhine axis, but integrated between areas with mature development and emerging systems.