The East German economy has struggled with anger at reunification costs
; growth in unemployment
; many business closings
; and slow economic growth since reunification. West Germany still subsidizes many services and social programs for East Germany. There was a rapid deindustrialization that caused a high level of unemployment especially among women in East Germany in the years after reunification and 1.3 people apparently migrated West, while less than 400000 people migrated to East Germany (Fleischhacker, 1995).
Explanation:
Many analysts from East Germany say that their economy has suffered because of the way that privatization was implemented at the moment of reunification. The government used a shock-therapy style of economic measures which gave many East German enterprises little time to adapt. Scholars say that alternatives like a slow transition would have made it easier for some enterprises to better adapt (Roesler, 2010). There continues to be a lot of wealth and income inequality between residents of the former East and West Germany. Even now three decades after reunification there is a notable disparity between the assets of East and West Germans. The average adult in what was formerly West Germany has assets valued at 94,000 euros while the average for their adult counterpart in what was formerly East Germany is just over 40,000 euros in assets according to a study by Germany’s DIW think tank published in 2014.
