Costs of German unity

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The costs of German unity consist of the assumption of GDR liabilities , transfer payments for the new federal states and other unification-related special expenses.

For the total costs (as of 2014) of German unity, including social transfers, the estimates are between 1.3 and 2.0 trillion euros, increasing by around 100 billion euros annually. A large part of this are social benefits , which are financed through transfers in the pension and unemployment insurance . The pure development aid from specific programs to improve the infrastructure and to promote companies in the new federal states, the Aufbau Ost , add up to around 300 billion euros.

Historical perspective

The question of the cost of unity only played a subordinate role in the political discussion in 1989 and 1990, because the ideal value of reunification was assessed to be far more important.

"Every project of historical dimension, as it is undoubtedly represented by German unity, also has a pecuniary side."

However, the costs were also significantly underestimated. In 1990 the federal government assumed that no tax increases would be necessary to finance the unit . In contrast, Matthias Wissmann , at that time the economic policy spokesman for the CDU / CSU parliamentary group , estimated the costs at 455 billion euros in February 1990.

With a view to history, however, it remains to be asked what alternatives would have existed, especially with the structuring of the monetary union and the privatization of GDR companies. Karl-Heinz Paqué writes in an article for the Federal Agency for Civic Education : “The reconstruction of the East was inevitable, and essentially exactly as it happened: with immediate monetary union, with rapid privatization, with massive economic development. Realistic alternatives did not exist because of the high mobility of the labor force as the fruit and price of freedom. The Germans chose the right path. You can be proud of it. ”The assessment that there was no second historically, morally and politically legitimate option in addition to the temporal, political and above all economic framework was and is shared by the various politicians.

Regular transfer payments

Definition

Ragnitz defines the following categories for assessing transfer payments:

  • Gross transfer
All federal, old federal and social security issues in the new federal states . This also includes pension payments , unemployment benefits and expenses for civil servants and employees of the federal government in the new federal states .
  • Net transfer
The net transfer is calculated from the gross transfer, with federal and social security income from the new federal states being deducted.
  • Construction aids
Allocations to improve the infrastructure or to promote companies in the new federal states
  • Special services
Development aids from programs that were specifically developed for the new federal states

According to Ragnitz, the choice of category depends on the question:

  • Net transfer: Question about the dependence of the East German economy on a transfer (purchasing power minus economic output)
  • Development aid: Question about strengthening the economic power of the eastern German states
  • Special benefits: Question about the special burden on West German taxpayers

The gross transfer amount is often mentioned in the press.

Net transfer

According to IWH, the net transfer costs from 1990 to 2003 amounted to approx. 950 billion euros. Since 2003, 75 billion euros per year can be expected. By the end of 2009, costs of 1.4 trillion euros would have been accrued. It should be noted, however, that such transfers are also common for structurally weak areas in the old federal states.

Construction aids

The construction aid for the new federal states ( construction east ) totaled around 250 billion euros from 1990 to 2003.

Special services

Development aid from programs that were specific to the new federal states amounted to approx. 15 billion euros per year from 1990 to 2003.

One-time special costs

Monetary union

In view of the system difference, it is not possible to determine how high the real value ratio between the Deutsche Mark and the GDR mark was. The exchange rate fluctuated sharply on the free market - between 1: 9.17 in October 1989 and 1: 2.86 in June 1990. If, on the other hand, one takes into account the purchasing power of the two currencies, which can be determined from shopping carts , one comes to a rate of approx. 1: 1. In the 1980s, labor productivity in the Federal Republic was about five to six times higher than in the GDR.

The exchange rate within the monetary union of 1.8: 1 between Mark of the GDR and Deutsche Mark for credit and 2: 1 for debts as well as 1: 1 for wages, salaries, grants, pensions, rents and leases followed political and less economic considerations .

The asymmetrical changes in assets and liabilities in the balance sheets of banks and foreign trade companies in the GDR led to unsecured claims of DM 64.5 billion, which were collected in the currency conversion compensation fund . The currency conversion and the inflation triggered by the monetary union contributed significantly to the financing of the costs of German unity.

Cost of withdrawal of the Soviet armed forces

The costs for the withdrawal of the Soviet armed forces from the former GDR amounted to DM 12.5 billion.

These were divided into:

  • Housing construction program (44 cities in Russia, Belarus and Ukraine) 7.8 billion DM
  • Maintenance for residence and withdrawal: 3 billion DM
  • Transport costs: 1 billion DM
  • Retraining measures: 0.2 billion DM
  • Bonus for early withdrawal (1994 instead of 1997 as planned): 0.5 billion DM

Treuhandanstalt

When the Treuhandanstalt was founded in 1990, it was assumed that the company's sales proceeds would exceed the costs. The value of the 14,000 state- owned companies was estimated by the Modrow government in 1989/1990 at 1.2 trillion DM, and in September 1990 the Treuhandanstalt calculated the achievable sales proceeds at 600 billion DM. Times over the operating assets of the trust: 750 billion East marks, converted at the rate of 1: 3, resulted in 250 billion D-Mark. The rest are the plots. The opening balance as of July 1, 1990 from 1992 forecast a deficit of 210 billion DM. When the trust was dissolved on December 31, 1994, there was a deficit of over 200 billion DM, which can be added to the costs of German unity.

Loan Settlement and Inheritance Funds

The government and foreign debts of the GDR were combined in the loan processing fund; it existed from January 1, 1991 to December 31, 1993 and went into the Inherited Debt Redemption Fund . At the end of 1990 this totaled DM 25.5 billion. In 1992, the currency conversion compensation fund was integrated, so that the debt rose to DM 91.7 billion. The original amount of the Inherited Debt Repayment Fund was mainly repaid by the UMTS proceeds , but the fund as such was topped up again and again through new debts until it was liquidated in 2015.

"German Unity" Fund

The German Unity Fund was created in 1990 to promote investments in East German infrastructure. Originally, 115 billion DM were planned, by 1994 the volume was increased to 162 billion DM. The federal states received 60% of the funds and the municipalities 40% . Financing was provided by the federal government (50 billion DM), the old federal states (16 billion DM) and borrowing (95 billion DM). The federal states contributed a share of the sales tax (2.5 billion DM per year). The fund was dissolved on January 1, 2005, and the remaining debts of 38.3 billion euros (75 billion DM) were transferred to the general federal debt in the federal budget .

Remediation of contaminated sites

The federal government (60–75 percent) and the affected new federal states (25–40 percent) shared the costs for the remediation of ecological contaminated sites in the GDR.

Among other things, the following were renovated:

financing

The costs of the reunification were financed as follows:

  • Tax increases
  • Allocation through the pension and social insurance
  • New federal debt
  • Federal states and municipalities of the former federal territory
  • European Union allocations

After the coalition agreement had ruled out tax increases, the solidarity surcharge was announced on January 30, 1991 . In addition to reunification, the financial contributions to the Gulf War were also given as a reason . The solidarity surcharge is a surcharge on income tax , capital gains tax and corporation tax . It was initially collected from July 1, 1991 to June 30, 1992 and reintroduced in 1995. Furthermore, from January 1, 1993 the value added tax was increased from 14 to 15%. By 1995, there were two increases in the mineral oil tax as well as an increase in the insurance tax , tobacco tax and the natural gas tax.

Jobs were lost as part of the privatization of the Treuhand. In order to keep the number of unemployed low, 800,000 people over 55 were sent into early retirement and over two million people were placed in the second labor market (mainly job creation measures and retraining ). To finance this, the unemployment insurance contribution was increased by 2.5 percentage points on April 1, 1991. In the same way, the adjustment of the pensions in the area of ​​the contribution area (West / East) was carried out by the pension insurance. Between 1991 and 1995, a total of DM 37 billion flowed from the old to the new federal states in the unemployment and pension insurance. For 2006, a transfer volume of 21 billion euros in pension insurance and 35 billion euros in social security was estimated. Financing social transfers through social insurance also means that entrepreneurs, property owners, the self-employed, pensioners , retirees and civil servants contributed less to the financing of German unity than employees who are subject to social insurance.

A large part of the costs of German reunification was financed through higher borrowing. The budget deficit rose from DM 28 billion in 1989 to DM 120 billion in 1990 to DM 154 billion in 1993. Most of the loans were borrowed from subsidiary budgets ( Fund "Deutsche Einheit" , Treuhandanstalt, ERP-Sondergeld , Bundesbahn , Bundespost ). The total indebtedness rose in 1990 from 1.2 trillion DM to 1.8 trillion DM in 1993 and 2 trillion DM in 1995. Part of the debts from the special assets (in particular the debts of the trust) were brought into the Inheritance Redemption Fund in 1995 .

The federal states participated directly in the solidarity pact . Furthermore, in the course of German unification, the federal government reduced the allocations to the municipalities and states of the former federal territory . The European Union made two billion DM available from 1991 to 1993 specifically for the new federal states. In addition, the new federal states also qualified for the normal EU funding programs.

Cost reductions due to agreement

Elimination of the costs of the consequences of division

With the German unit eliminated the need for the aid to border regions , the Berlin Promotion (including Berlin allowance ) and the welcome money (1988: 280 million DM, 1989: 2-4 billion DM) in the former West Germany. In addition, the emergency reception centers in Gießen , Uelzen and Marienfelde and the corresponding integration benefits (refugee aid, burden compensation for property left behind) were no longer necessary for migrants .

Payments from the Federal Republic of Germany made a significant contribution to the GDR's foreign exchange generation on the basis of Eastern Treaties . These included the ransom of political prisoners (DM 3 billion until 1989), a transit lump sum (DM 524 million for 1989) and interest-free loans for intra-German trade.

Peace dividend

Due to the end of the Cold War , a peace dividend can be accepted through disarmament and the reduction of armament and defense expenditure as well as the expenditure for maintaining the inner-German border . In the 1970s, the army of the GDR was 170,000 men and that of the Bundeswehr 495,000 men. At the end of 2015, the Bundeswehr in reunified Germany had a workforce of 178,000 men. Accordingly, the Federal Ministry of Defense's expenditure on the entire state budget fell from 20% in the then Federal Republic to 10%. Expenditures for NATO troops stationed in the west decreased; the costs for state security , border troops and NVA were eliminated.

Reunification Strategy in Korea

The costs of German unity play a role in the discussion of a reunification strategy for South and North Korea . The Rand Corporation , an American think tank , wrote in 1999: “Indeed, the effect of reunification in Germany on the economic performance of the then reunified country - partly due to the seriously underestimated cost burden of German reunification - markedly reduced enthusiasm in South Korea and the USA to focus on Korean reunification, even before the economic crisis of 1997. “ Due to the German experience and the great economic gap, a gradual reunification is favored.

Résumé

The costs of German unification have been significantly higher than expected.

The costs are around 0.95 to 2.00 trillion euros. Estimates for individual years are shown in the following table: A large part of these costs were caused by social transfers. The actual investment and construction costs are around 300 billion euros. Due to the improved economic structure, i. H. the successes of the building, the transfers decrease annually.

Period Estimation of costs (in billion euros) source Individual proof
1991 to 1995 607 to 888 Bundesbank, IWH , IFW, IWK, Expert Council
1991 to 1999 600 Unknown
1991 to 1998 600 to 750 Economic research institutes
1991 to 2003 950 IWH (hall)
1990 to 2004 1,100 to 1,200 FU Berlin
1990 to 2009 1,600 FU Berlin
1990 to 2010 1,300 IWH (hall)
1991 to 2010 1,500 DIW
1990 to 2014 2,000 FU Berlin

literature

  • Scientific services of the German Bundestag: The financing of German unity. Macroeconomic effects of increasing indirect taxes and expanding net borrowing: results of a model calculation. Bonn 1991.
  • Hartmut Tofaute: Special funds as instruments to finance the costs of German unification . Friedrich Ebert Foundation, 1993 ( PDF; 148 kB ).
  • Roland Czada: The struggle to finance German unity . Max Planck Institute for the Study of Societies, MPIFG Discussion Paper 95/1, 1995 ( PDF ).
  • Manfred Lange: No obligation to draw up an asset balance sheet for the GDR. In: Deutsch-Deutsche Rechts-Zeitschrift 7 (1996), pp. 71-74.
  • Werner Weidenfeld , Karl-Rudolf Korte : Handbook on German Unity, 1949–1989–1999. Campus Verlag, 1999 ( online ).
  • Joachim Ragnitz : Transfer payments for the new federal states - a definition. In: The changing economy. 9-10 / 2004.
  • Gerhard A. Ritter: The price of German unity. The reunification and the crisis of the welfare state. CH Beck, 2007
  • Karl-Heinz Paqué : Transformation policy in East Germany: a partial success. In: From Politics and Contemporary History. 28/2009 (July 6, 2009).
  • Florian Zinsmeister: The Financing of German Unity - On Dealing with the Debt Burdens of Reunification. In: Quarterly issues for economic research. 78 (2009), 2, pp. 146-160.

Individual evidence

  1. ↑ German unity - 100 billion euros flow into the East every year. In: Welt Online. August 21, 2009, accessed October 31, 2009 .
  2. ↑ a b c Werner Weidenfeld, Karl-Rudolf Korte (ed.): Handbook on German Unity, 1949–1989–1999 . Campus Verlag, 1999, p. 369.
  3. ^ The costs of the German-German currency union. In: Frankfurter Allgemeine Zeitung . February 17, 1990, No. 41, p. 11.
  4. ^ A b Karl-Heinz Paqué: Transformation policy in East Germany: a partial success. In: Federal Center for Political Education (Ed.): From Politics and Contemporary History . 28/2009 (July 6, 2009).
  5. ↑ Der Spiegel (39), 2010, mentions Genscher and Kohl as witnesses of the lack of alternatives, but also Gorbachev and, despite their concerns, Mitterrand and Thatcher as well, which is confirmed by contemporary witness Condoleezza Rice in an interview.
  6. ↑ a b c d e f Joachim Ragnitz: Transfer payments for the new states - a definition. In: The changing economy. 9-10 / 2004.
  7. ^ A b Klaus Schroeder: The silent costs of German unification. In: Frankfurter Allgemeine Sonntagszeitung. September 26, 2004, No. 39, p. 5.
  8. ↑ Manfred Willms : The economic design of the united Germany 1989/90. Economic issues. In: Jürgen Elvert, Friederike Krüger (Ed.): Germany 1949-1989. From two states to unity. Franz Steiner, Stuttgart 2003, p. 141.
  9. ↑ according to calculations by the German Institute for Economic Research , cf. Siegfried Wenzel: What was the GDR worth? Attempt a final balance sheet. Das Neue Berlin, Berlin 2000, ISBN 3-360-00940-1 , p. 117.
  10. ^ Ulrich Busch: The currency union. In: Hannes Bahrmann , Christoph Links (Ed.): Past the goal. German unity. An interim balance. Berlin Verlag, Berlin 2005, ISBN 3-86153-366-9 , p. 80 ff.
  11. ^ Oskar Schwarzer: Socialist Centrally Planned Economy in the Soviet Zone / GDR. Franz Steiner Verlag, Stuttgart 1999, ISBN 3-515-07379-5 , Figure 26, p. 166; also Gerlinde Sinn and Hans-Werner Sinn : Cold start . Mohr, Tübingen 1992, ISBN 3-16-145869-9 , p. 23; Figures from 1987: Werner Rossade: Society and culture in the end times of real socialism. Duncker & Humblot, Berlin 1997, p. 352.
  12. ↑ The exchange rate was 2: 1. The first 2000 (children), 4000 (adults) and 6000 Marks (pensioners) could be exchanged at a ratio of 1: 1. In total, the rate was 1.8: 1.
  13. ↑ a b c d e f g Florian Zinsmeister: The financing of German unity - To deal with the debt burdens of reunification. In: Quarterly issues for economic research. 78 (2009), 2, pp. 146-160.
  14. ↑ Werner Weidenfeld, Karl-Rudolf Korte: Handbook on German Unity, 1949–1989–1999 . Campus Verlag, 1999, p. 371.
  15. ↑ Bruno Thoss: From the Cold War to German Unity. Oldenbourg Verlag, Munich 1995, ISBN 3-486-56160-X .
  16. ↑ Werner Weidenfeld, Karl-Rudolf Korte: Handbook on German Unity, 1949–1989–1999 . Campus Verlag, 1999, p. 372.
  17. ↑ Then the stove is from DER SPIEGEL 44/1990 of October 29, 1990
  18. ↑ Richard Schröder: Errors about German unity, extended edition 2007 ISBN 978-3451296123 .
  19. ^ Loan settlement fund law
  20. ↑ Manfred Schäfers, FAZ.de: Debt trap inherited funds - little repaid, many new loans
  21. ↑ Law amending laws on federal special funds of December 22, 2014 ( Federal Law Gazette I p. 2431 ).
  22. ↑ Federal Ministry of Transport, Building and Urban Development: Annual Report of the Federal Government on the State of German Unity in 2009. P. 82–85 (PDF)
  23. ↑ Restoration of uranium ore mining / bismuth
  24. ↑ Remediation of the contaminated sites of the brown coal mining. Status: October 2012 , Federal Ministry for the Environment, Nature Conservation and Nuclear Safety
  25. ↑ [1]
  26. ↑ Gerhard A. Ritter: The price of German unity. The reunification and the crisis of the welfare state. CH Beck, 2007
  27. ↑ Jürgen von Hagen, Paul JJ Welfens, Axel Börsch-Supan: Springer's handbook of economics. Volume II. Springer-Verlag, 1997.
  28. ^ Charles Wolf Jr .: Forecasting Korea's Economy and the Costs of Reunification . Rand Corporation , Reprint RP-892, 1999. ("Indeed, the effect of reunification in Germany on that reunified country's subsequent economic performance - due in part to the seriously underestimated cost burden of German reunification - has markedly reduced enthusiasm in South Korea as well as in the United States, for focussing attention on Korean reunification, even prior to the 1997 economic crisis. ")
  29. ↑ Bong-Rock Ahn: The question of reunification of Korea, taking into account the German experience. Dissertation, Free University of Berlin , 2005 ( html ZIP download )
  30. ↑ a b Brockhaus, Die Infothek: The costs of the unit. 1999-2002.
  31. ↑ a b Manfred Görtemaker: Problems of internal unification. Federal Agency for Civic Education , March 26, 2009 ( online )
  32. ↑ s. Table, Ragnitz, Schroeder
  33. ↑ German unity cost 1.6 trillion euros. In: Frankfurter Allgemeine Zeitung. August 21, 2009.
  34. ↑ Martin Greive, Uwe Müller: Since the fall of the Berlin Wall, 1.3 billion euros have flowed eastwards. on: world online. November 7, 2009.
  35. ↑ a b Martin Greive: German unity costs 2,000,000,000,000 euros. on: world online. May 4, 2014.