The Economic Fall of East Germany By: Hanna Peiffer


Germany was split into four sections after World War II

(U.S. Section, British Section, French Section and Russia Section)

However, during the 1950's the country was split into two areas. Which was the east and west German divide. The Cold War was prominate during this time and the economic divide between the two sections of the country caused the fall of East Germany.

On November 9, 1989 the Berlin Wall fell and allowed the East Germans to finally go to the West side of the country and have a better life and a more sustainable future.


A problem that East Germany exerienced during the Cold War was that they were not developing as fast as the Western half of Germany. West Germany had a democratic control. Whereas the East was controled by the Soviet Union. The Soviet Union did have a huge economic boost after World War II, but due to their inability to catch up with the West caused them to fall apart.

According to an article from the Washington Post states, "After the fall of the Berlin Wall, formerly communist eastern German companies and factories suddenly had to compete with their much more efficient western counterparts. Capitalism came too fast. Many eastern German companies went bankrupt and some regions never recovered from the shock. Until today, income levels are much lower in the east than in the west."

According to an article posted by Fortune they state, "If you look at statistics such as per capita income or worker productivity, they also point to the large disparity in economic development between east and west." The picture above shows how the west side of Germany has more income and a higher standard of living compared to the East side of the country.


Other then the Berlin Wall falling there is still some economic differences between West and East Germany. A solution would be younger generations moving to the Eastern half of Germany to help create jobs and bring up the economy. The Fortune article states, "What economists do know is that when economic development takes hold in an area, people tend to flock to that area to take part in it. That's obviously what's going on in Germany, as the population of the east has shrunk from 16 million in 1989 to 12.5 million now, while the West German population has grown to 64.6 million from roughly 60 million." I was not surprised when I was reading this and from our readings it was very obvious that this is what is hurting the German economy.

Another solution is that the West needs help the East catch up with the rest of the country. The Fortune article used a German article as a source which stated, "Another recent story in Deutsche Welle, Germany's international news service, examined the differences between the eastern and western economies, bemoaning the fact that, since reunification, West Germany has transferred more than $2 trillion in economic aid in an attempt to help the East catch up. The East has made some progress, somewhat catching up to the West in terms of per capita income." This is still not enough to help the East side of the country come back from their economic problems, but if the West can give them more money and more people start moving to the East, I feel that they should be able to make a much better comeback.


Bölinger, Mathias, ( 2014, June 25) Mapping Differences in Two German Economies

Mathews, Chris, (2014, November 9) Poor Germany: Why the East Will Never Catch Up With The West.

Noack, Rick, (2014, October 31) The Berlin Wall Fell 25 Years Ago, But Germany is Still Divided.

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